GTA EXPORT CONTAINER FORUM

Grain Quality Management and Certification

Issues:

1. How does industry maintain the integrity of Licenced Export

Premises.

2. The misrepresentation of Grain Quality through Varietal

Classifications.

* Data sourced from Australian Crop

Forecasters and Riordan Grains.

221 204

284

162

250

350

580 580

0

2

4

6

8

10

12

14

0

100

200

300

400

500

600

700

2009-2010 2010-2011 2011-2012 2012-2013(projected total)

Mar

gin

in $

AU

D

Co

nta

ine

rs p

er

day

Season

Packing Capacity vs Shipped ex Melbourne Ports (based on 200 working days/year)

Actual

Capacilty

Margin

Lower margins caused through over supply of service

1. Quality of product deteriorates

2. Company behavioral changes necessary to survive in

the current market

3. Customer requirements become less specific

4. Tighter specification requirements need to be effectively

managed to achieve increased margins crucial for

greater returns vs risks taken in current climate.

Export Premises

1. Industry has set standards as issued through the

Department of Agriculture, Fisheries and Forestry

(DAFF)

2. Industry needs to closely adhere and comply with these

standards to achieve market competiveness.

3. Need to implement a random audit process across

industry, which will then be inforced through a penalty

system if found to be non compliant.

4. Industry has to make the decision on how it is to be

managed and controlled going forward.

5. Needs to be accessible to all.

Quality Controls

1. This is currently controlled by market conditions.

2. There can be very tight controls in place which force

companies to become uncompetitive, which ultimately

results in business closure due to inadequate margins.

3. As an industry, we need to have a built in regulatory

measure that can be controlled to enable Export

Customers to be guaranteed that the minimum standard

across the industry is met.

THE INDUSTRY HAS TWO CHOICES?

WE CAN HAVE A UNTIDY MODEL OR…

WE CAN HAVE A TIDY MODEL

That will unify and create an industry that is

highly regarded and known for its pristine

standards.

Misrepresentation

• This is caused through creating quality specific contracts that are

tailored to meet the customer and/or market requirements.

• A problem within industry is that there is not enough knowledge

about the varietal differentials and their uses at the production level

(i.e. Bakery)

For example, if a Wheat sample tests 11.8% protein, it could possibly

be graded and binned as an AH variety if proper care hasn’t be

taken, to check the varietal breeders classification (i.e EGA Gregory

variety wheat is only classified at a maximum APW1 Varietal level

even though its Quality results could be indicative of a H2 grade).

Thus creating ‘Flat Donuts’ scenario in a Bakery as the APW1

variety doesn’t have the necessary attributes of a AH variety.

Proposal

Going forward we need to educate the industry and greater market

place, to buy and sell commodities, based on specific varietal

standards and classifications to meet the end users

requirements.

Where to from here?

• Customers will tell us what they require

• We will have to adapt to the different requirements of future markets and

commercial margins

• Some businesses within the industry will be forced to review their

business model to remain competitive and to provide for the

requirements set down by the customer for specific markets.

• The industry like all others, needs to have controls in place to manage

itself, or the Government will need to intervene on our behalf.

Thanks for the opportunity to speak and am happy to now answer any

questions now or after the event.