![Harvest insights from AWB pools manager Charlie Brown. Harvest insights from AWB pools manager Charlie Brown.](/images/transform/v1/crop/frm/3AVQXXVxehY6aUCkmGUt6Z2/00c125f8-239d-4780-8aa7-b1fc17518bca.jpg/r0_136_5084_3006_w1200_h678_fmax.jpg)
THE past 12 months have been a tough and volatile environment for the Australian grain industry.
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The good news is that it’s almost behind us.
Last harvest saw a number of what could easily be known as ‘Black Swan’ events within the Australian grain market.
The Australian dollar depreciated about 20 points, excessively expensive port access contracts ended up causing serious distortions in prices and Russia imposed a wheat export tax.
What is a Black Swan event, I hear you ask? It’s an “unexpected event which catches people by surprise but in reflection should actually have been predicted”. So let’s reflect.
The mining boom has been talked about ending for a couple of years.
The Chinese economy had been showing weakening signs for a couple of years.
The US was never going to keep rates at zero forever.
How was the $A ever going to stay above 95c to the $US?
Australian exporters paid enormous prices for shipping capacity in the past year, opening themselves up for exposure for not owning grain at harvest, which created significant distortions to the value of grain domestically versus world price.
Finally, what about Mr Putin? How unpredictably predictable is he!
In reflection, these things may have been predicted. Yes hindsight is a beautiful thing.
The good news is that it’s all behind us. But this season has once again thrown us challenges. And it seems it’s the growers who are taking the brunt of it, while last year it was the traders.
We’ve had ‘El Nino’, a record hot and dry spring, and now these devastating bushfires where tragically lives were lost.
I know many of us wish for an uneventful year where not much happens, where growers can make good profits, along with the industry.
But managing risk and volatility is what we are here to do and without it, we wouldn’t be working in this great industry of ours. So let’s not throw the baby out with the bathwater.
Prices are not where they were this time last year, but there will be opportunities, there always are.
So it’s imperative to spread your risk this season to help you get the best possible returns for your hard work.
A combination of cash, pooling or warehousing should be a sensible approach.
All the best for a safe, and perhaps uneventful, 12 months ahead.