Family-run Commodity Ag launches first shipment of grain in competition with Cooperative Bulk Handling

Family-run Commodity Ag launches first shipment of grain in competition with Cooperative Bulk Handling The venture represents the first time a family farming operation has shipped its own grain out of WA. (Supplied: Commodity Ag)

A farming family in Western Australia's Great Southern has split from the state's largest grain handler, Cooperative Bulk Handling (CBH), launching a competing grain export business.

Commodity Ag, a logistics and supply chain company owned by the Richardson family, which farms about 370km south-east of Perth in Gnowangerup, exported its first shipment of grain this week.

More than 20,000 tonnes of wheat grain from the family's farming operation was loaded onto a 40,000-tonne bulk carrier through the port of Albany.

The ship bound for the Indonesian port of Surabaya represents the first time an independent farming operation has launched a grain-handling business in direct competition with CBH.

'Room for little players'

Commodity Ag supply chain development manager Casey Naisbitt said the business, with arms in engineering and agronomy, had made the "cost" decision to ship its own grain rather than stay with CBH.

"CBH has been part of, with every farmer in WA, so that's been the go-to, but we think there's room for little players like ourselves to deal in areas where CBH might not want to deal," he said.

"All our grain is grown and stored on farms, so it's a little bit more cost-effective for us to do it that way."

Grain exports out of the state are valued at about $5.9 billion a year and represent the fifth-largest export industry in WA, behind iron ore, petroleum and gas, gold and lithium.

Expansion in the works

Mr Naisbitt said the first shipment was exclusively made up of grain from the family's farms, but the export business was open to taking on new customers.

"It was an opportunity they [Commodity Ag] saw for Albany, and they thought, 'We'll give it a go' and see how things pan out," he said.

"We're here to do it for ourselves, but also provide a service for other operators that want to look at bespoke markets."

The new venture has started with wheat grain, but Mr Naisbitt said it was already looking at providing access to markets for other niche products.

"There's been some discussions around pulse grains, lentils and fava beans and things like that," he said.

'Support or fight'

The move has not surprised industry insiders, who said growers had previously identified a need for more export options.

Former CBH chairman Neil Wandell, who has been exporting pulses in containers out of the port of Esperance for the past seven years, said more farmers would look to bypass CBH as a matter of cost.

"They're [CBH] putting prices up at CPI and that can bite them on the head pretty quickly. It compounds," he said.

"We can probably ship grains now directly from the farm cheaply, and there is a real advantage in controlling your grain's farm gate to port.

"It's inevitable they're [CBH] going to get some form of competition. They've got to work with it or support it or fight it, it's up to them."

With CBH spending billions of dollars over the next 10 years on upgrades to its statewide infrastructure, Mr Wandell said the organisation would need to pivot to retain members.

"They've spent a lot of capital and got a good return on that now. I just think that model might have to change going forward," he said.

"It won't be large, I don't think they'll lose many tonnages.

"But I think there are some little niche things that don't serve us that well."

CBH has been contacted for comment.

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