A view from the Chair & Your Co-op in action

AGG Co-op has been working feverishly this year to ensure we are performing for you and able to offer some unique programs and deals now and in the future and we thought it timely to let you know what’s coming up as you prepare for a busy seeding period.

Managed Programs performing
All our managed programs are performing according to their mandates and enjoying the post-harvest price rallies. Current progress & EPRs can be followed on our website
click here

AGG Clear
This program is clearly popular with growers and has been well supported again this season, with volumes traded exceeding 70% more tonnes, year-on-year. This program can be accessed all year round so you can decide when & what you sell and at your price, with secure settlement and fast payment.

AGG Engage
This program was introduced as a pilot late last year to work on behalf of collaborating growers who want to participate in aggregating and offering larger grain parcels with the aim of securing better prices. We intend to further develop this program with the co-operation of growers who are willing provide access to their grain stocks – in the warehousing system or on-farm – and expect a better grain marketing service.

On-farm storage
We received great feedback from you in the survey distributed in February 2018. We have managed to secure an attractive deal for AGG Co-op Members based on the responses, in terms of the indicative demand for on-farm silos and associated ex-farm grain marketing potential.

Details of this offer will be circulated soon and access will be restricted to Co-op Members, and we think that will be incentive to join to further improve our collective bargaining & marketing influence.

Ex-farm grain marketing
These programs are always in development and with the emerging new supply chains may provide real alternatives for domestic and international participation. We have been working with potential demand customers and have been able to secure some test volumes with a view to expand these programs to complement the activities mentioned above.

Coopers
The ultimate connection for the Co-op is to supply from farm direct to the end-user. We are currently delivering against a commercial contract with Coopers to supply Compass, Spartacus & Scope malt barley ex-farm providing efficiencies to both parties in this supply chain. Our objective is to increase ex-farm supply of specific malt barley varieties for Coopers with both pre- & post-harvest contracting.

Managed Programs 2018-19
The Co-op will review the Managed Program offering for the new season and may look to introduce new programs to meet specific grower needs.

AGG Co-op Membership
Maintaining membership with the AGG Co-op currently requires a minimum delivery of 150 tonnes of grain to our programs during the previous three seasons. The Board understands that grain marketing options offered have been restricted recently but now believes the portfolio will be more attractive.

The Board also understands that you may have exhausted any grain supply from the 17/18 season, so will be offering special terms to those Members ‘at risk’ of lapsing, to maintain their membership for a further three years by either:

  1. Paying your original membership fee by 30 June 2018, or
  2. Committing to deliver 150 tonnes of grain to any one of our programs in 2018/19

It’s easy to become a Member of AGG Co-op by visiting our website (click here) and completing a Membership application.

Activities & feedback
Our aim at AGG Co-op is to achieve the best result for our members and program participants.  You can contact any of our Board who you should see at industry events in the country during the year. Co-op success is a direct result of member and grower support so keep an eye out for our announcements, offers & services. We believe we have an important function within the market place and look forward to any feedback to keep us focused on your needs.

Your attention and participation is appreciated.

Thanks and regards,

Richard Konzag
Board Chair
Phone:  0417 830 416
Email: richard.konzag@gmail.com

Bruce McDonald
Chief Executive
Phone:  0418 350 738
Email: b.mcdonald@aggcoop.com.au

Market Update 22 March 2018

That ‘breather’ we mentioned in February was indeed the calm before the storm. The market surged again in early March and has been bouncing about ever since!

US wheat futures rallied strongly to start the month driven by the prevailing dryness in Argentina and the US Plains. Aggressive short covering by the hedge funds saw the Chicago wheat futures contract rally by more than 20% off the lows of December. The move higher was even more extreme for the Kansas Hard wheat contract, which witnessed a rally of nearly 30%. This price action is a perfect example of just how much influence the hedge funds can have over the market, especially when holding a large short position that they want to exit in a hurry.

More recently, better than expected rains for the US Plains and the fact that US wheat has priced itself out of many of its export homes, has seen futures markets fall away. While US wheat exports continue at a modest pace, the speed of Russian wheat exports has been impressive. Russia exported 3 million tonnes of wheat in February, and with four months of the export calendar still remaining, they have already surpassed their previous best export year.

An upbeat assessment of the US economy by the new US Federal Reserve Chair, and the potential for as many as four US rate hikes in 2018, has seen the Australian dollar fall from its January highs to a 3 month low of US$0.77. Despite subdued US wage and inflation growth casting doubts over the need for such as aggressive approach to raising US rates, the US FED is widely expected to raise rates by 25 points this week to 1.75%.

 

Wheat prices in South Australia rallied by $20/t during February and early March. A combination of futures strength and a softer Aussie dollar allowed APW1 prices in Port Adelaide and Port Lincoln to reach $260/t. Consistent demand for hard wheat in a number of zones has seen the price spread for H2 extend beyond $20/t.

Consistent Chinese demand and strength in global feed barley values has kept the spread between wheat and feed barley at historically tight levels, as illustrated in the chart below.

Locally, the Port Adelaide zone has witnessed the strongest demand for feed barley, while prices in Port Giles and Port Lincoln have started to come under pressure in recent weeks.

AGG managed programs are being executed within their published and transparent mandates and are performing well relative to the Dec/Jan harvest average prices.

 

Business experts join AGG Co-op board

The Australian Grain Growers’ Co-operative (AGG Co-op) has welcomed directors Susi Tegen and Gary Spiel to its board of directors.

 

AGG Co-op Chair Mr Richard Konzag said the new board members bring valuable business and governance expertise to the board, joining him and fellow grain growers Jim Heaslip and Jordan Wilksch.

 

“Our board has always had strong representation of growers, which is why we are able to provide custom designed programs that work for grain growers,” he said.

 

“Having served our grower community well for the past three seasons, it is of paramount importance that the board critically reviews future product and program development.”

 

“The business expertise Mr Spiel and Ms Tegen bring to the table means we are now ideally placed to ensure those programs provide the best possible returns to our growers and grower members.”

 

Mr Spiel has extensive director and executive experience in the global agribusiness sector, with specific expertise in international grain marketing. Gary currently holds a number of directorships in the Agribusiness Agriculture space and past directoships with Suprima Bakeries, Hassad Australia, Zulu Oasis, New World Grain and Five Start Flour Mills, and executive roles with Hassad Food, ABB Grain, AWB and Prima Ltd. Gary has a Bachelor of Business and is a Fellow of the Australian Institute of Company Directors.

 

Ms Tegen has extensive business and political networks across Federal, State and international domains. Her career experience includes serving as the Chief Executive and Company Secretary for the Medical Technology Association of Australia and the Chief Executive and Company Secretary for the Royal Australian & New Zealand College of Ophthalmologists. She has been a member of several Government Ministerial Advisory committees including the PIRSA Sheep Advisory Committee and the SA Farmer’s Federation policy committee. Susi was the RIRDC SA Rural Woman of the Year in 2009, received a Telstra SA Business Innovation Award in 2009 and is the co-owner of a cropping and livestock enterprise in South Australia’s South East.

 

The new board are turning their focus to the upcoming season given only managed program for current season still open is AGG 6Plant (wheat) which was extended for contracting, and CEO Bruce McDonald is encouraging grain grower feedback to keep the co-operative on-track.

 

“We want growers to continue to see us as an attractive business option and their grain marketing partner of choice,” he said.

 

“We must ensure that our offerings meet grain grower and member needs in a dynamic and evolving market, and that our stakeholder engagement is first class.”