2010 What will grain markets demand? by Cathy Nicoll

Photo of a grain storage

IT'S LESS than a decade away. The move towards a privatised, consumer-driven grain market, foreseen by Gerard McMullen of AWB Limited, will potentially revolutionise the way growers market their grains in the year 2010.

In his address to the Post-harvest Technical Conference, Mr McMullen outlined his expectation that overseas grain markets would be rationalised, as buying agencies and milling operations are privati sed and lose government subsidies. One result will be that, to stay in business, they will need to be more responsive to consumer demands for grain that meets specific dietary and other functional needs.

"Issues such as GM crops, food safety and even basic grain quality parameters such as protein levels will become more prominent than they are now," says Mr McMullen.

"Buyers will require a highly differentiated product based on a range of quality parameters. It means that we will need to be able to segregate grain at receival and determine the quality right then and there."

In tum, this places increased pressure on marketers to accumulate enough grain of a specified quality in the required location, while preserving the identity of the grain throughout the supply chain to the ultimate customer.

Nevertheless, these customer demands for tighter quality specifications may not necessarily require increased segregations in all instances.

The current grade-based segregation system will evolve into a market-based segregation system, potentially leading to a decrease in segregations in some areas. The traditional 'bulk' markets will always exist, lending themselves to a rapid storage and outloading process.

Conversely, quality-conscious buyers will require a specific and consistent segregation, potentially outside the central storage system, supplied through specific grower segregations on-farm.

What's it mean to farmers?

The implications for control over quality and insects are obvious. Rapid in-line tests during the transport phase, coupled with blending management packages in up-country locations, will be essential to allow just-in-time grain delivery.

"A key to this will be the ability of the storage agent to ensure grain is maintained insect-free, using treatments that are suitable for a range of customers," says Mr McMullen.

Finally, as food safety becomes more important, Mr McMullen expects that all aspects of supply will have to operate under an internationally approved food safety system. Without these guarantees, even those 'bulk' markets will not be open. This means that grain production on-farm, in storage, during transport and on outloading will need to be operated under these fully auditable systems, covering all issues identified under food safety risk analysis.

Contact: Mr Gerard McMullen 03 9209 2000 email GMcMullen@awb.com.au