Grain pools in spotlight this harvest
WITH low grain prices, grain pools are likely to get the attention of growers this harvest.
To meet that demand, AvantAgri Australia has released three new products, in time for the 2016-17 harvest.
AvantAgri was established by Peter Woods (formerly of Wheat Export Australia) and Malcolm Bartholomaeus (formerly of Callum Downs Commodity News and ProFarmer) and has been providing pool products to Australian grain growers for the past three seasons.
“Pools force growers to accept the price and return selected by the pool manager,” pool manager Mr Bartholomaeus said.
“Everyone gets the same result, but some growers might be happier with quicker returns, or need to hold out for better prices.
“The benefit of the AvantAgri product is that we handle all the storage fees and levies for you, find the best price when you want to sell, and can pay an advance against the grain in the meantime.”
Initially AvantAgri provided three products that gave market exposure for three, six and nine months after harvest.
They also offered a range of payment options covering advance, monthly and deferred payments.
In 2015 the business introduced its traditional pool, which paid out 80 per cent of the estimated net return at harvest, and 20 per cent in July.
This proved to be popular, with its high cashflow up front and its inherent insulation against post harvest price falls, while still remaining open to some upside.
This year AvantAgri is moving to give better service to the longer-term post-harvest market with its new AvantAgri managed pool.
Downside price risk is actively managed while giving exposure to the upside well into the year following harvest.
If combined with an advance at harvest, this product can deliver strong cashflow and higher returns if the market rallies strongly.
Some growers are happy to market their own grain, but after several low production years are looking to maximise cashflow.
AvantAgri has developed its self-managed pool for these growers.
Wheat, barley or canola can be transferred to AvantAgri with an advance of 60 per cent of the estimated value being paid within three days.
The grower determines when sales are made.
The third product, the AvantAgri Flexi Pool, gives the grower more flexibility with payment streams, who buys your grain, and can even cover a whole range of grains that might be stored on farm, and not just in third party bulk storage facilities.
POOLING RESOURCES: AvantAgri directors Malcolm Bartholomaeus and Peter Woods.