MEDIA RELEASE by the Australian Export Grains Innovation Centre
MONDAY 11 MAY 2015
The efficiency of Australia’s bulk export grain supply chain has been pitted against that of one of our most important competitors, Canada, in a new report by the Australian Export Grains Innovation Centre (AEGIC).
The report is a follow-up to AEGIC’s 2014 study looking at the cost of getting grain from farm to port in Australia.
Titled “The puck stops here! – Canada challenges Australia’s grain supply chains” the report compares and contrasts Australia’s supply chain with that of Canada’s and outlines opportunities for increasing the efficiency of Australia’s grain freight system.
“As international requirements for grain shifts and climatic and financial pressures increase, understanding operating environment of our competitors is vital,” AEGIC Chief Executive Office David Fienberg said.
“Canada in particular is becoming increasingly more competitive, challenging Australia’s key Asian export grain markets.”
In Canada, higher volumes of grain are stored on-farm for longer and the system operates on a just-in-time basis with grain moved to port when a sale is secured. Conversely in Australia, the majority of grain is moved from farm to warehouse immediately after harvest.
Mr Fienberg said during the past 15 years Canada’s grain supply chain had undergone substantial renewal and reform, more than doubling the number of high-throughput receival sites located on high capacity, highly efficient rail lines.
“The majority of Canadian grain is now delivered through this infrastructure which has reduced the time taken to deliver grain to port by one third.
“Canadian supply chains still operate at a higher cost than Australian supply chains, but with higher yields, Canada can deliver grain into Asia at almost the same cost as Australia.”
“This is despite the long distance grain must travel from the inland Canadian growing areas to port, and then the long distance from Canadian ports to Asian markets,” Mr Fienberg said.
The report makes recommendations as to how Australian enhance its competitive position in global grain exports.
“Grain is Australia’s most valuable agricultural export and it is vital the sector examines the competitive pressures coming from other grain-producing nations,” Mr Fienberg said.
“The ultimate aim is to enhance the international competitiveness and value of Australia’s export grain and to return pre-farm gate value to grain growers.”
View “The puck stops here! – Canada challenges Australia’s grain supply chains” report and summary factsheet here