As part of celebrating the 50th year of Planfarm, we recently caught up with a previous employee, Peter Scott who started Planfarm in 2006. Here is a reflection of his time with Planfarm.

My Planfarm career – Peter Scott, Grain Marketing Advisor
I was diligently working away at my job with the Grain Pool of WA in the second half of 2006, when Greg Kirk and Cameron Weeks asked me if I’d have dinner with them the following day. It was at this dinner I was asked if I’d like to join Planfarm as a Grain Marketing Advisor and join their office in Geraldton.

I remained in this position until 2008, later moving to Northam, and working in Graeme McConnell’s office, with Audrie Morgan and Karen Borrett. The client base at this stage had spread to the central and southern parts of the state.

During this time the clients developed a greater understanding of how grain was priced and the risks and advantages involved in using the various products on offer from the buyers.
I decided to retire at the ripe old age of 58 in 2011, then moved to our house in Albany.

During 2012, I prepared and refitted my sailing boat to satisfy my dream and sail across the Bight to the eastern seaboard and lands beyond. The sailing bit has been a major part of my retired life to this day.

Reflection on the deregulation of the grain industry in WA and the role of Planfarm
The days when the marketing of a farmer’s grain required no thought and a lot of trust in the two single desk marketing companies are over. In the main the AWB handled the marketing of export wheat, and the Grain pool of WA had the sole right to export lupins, barley (malt and feed) and canola. Most of these grains were delivered by growers to marketing pools. These pools then marketed the various grains over a period and paid the grower an average price received for the grain types over 12 to 18 months. All the risk of production, price and transport was worn by the grower, while the marketing company deducted a fee for the service. The advantage with these early pools was that the grower did not have to deliver or “wash out” if they had production failure.

On deregulation of the grain marketing restrictions and the introduction of an increased number of grain buyers/marketers, there was an increase in the options available to growers. This included a range of cash and pooling options. Also, the banks and later some of the marketing companies came out with lower risk, flexible pricing products, generally referred as ‘swaps’ or a direct involvement in the futures market, both in Australia and Chicago. Another result of deregulation is the true reflection of grain prices at any given point in time. Feed and Malt barley was delivered into the same pool and the true value of the feed or malt component was hazy to say the least.

These changes became a challenge to growers who in the main poured their grain down a hole at CBH and received a cheque sometime in the future. Planfarm was one of the first consultancies to realize the problems faced by growers in deciding how and who to sell and price their grain. This had to also involve a balanced consideration of production and price risk.

The important role for Planfarm in these early days was firstly in determining how much growers knew about how grain was priced, and the risks faced by marketing companies. These risks helped explain the daily price fluctuations and actions taken by marketing companies and how they protected their price risk, which is where Planfarm’s wide range of expertise became very important. All this had to be explained to growers to give them confidence in forward or post-harvest selling/pricing their grain.

Another role was to use the large Planfarm grower base as a bargaining tool to attract buyers’ attention and therefore price premiums. This involved advising a group of growers to accept a price and commit to delivery of the tonnage of grain contracted to the buyer. There were also opportunities where a grain buyer had a shortfall in tonnage to fill a shipment and would come to Planfarm with a significant price premium to fill that shortfall quickly.

The most important feature of deregulation was the competition provided which tightened company profit margins and increased tenfold the variety and options available for growers to price their grain and manage their risk. This in combination with Planfarm advice has improved grower returns for any given season. The role Planfarm is playing in grain pricing or marketing is essential in the management of the modern farming business.

Planfarm would like to thank Peter for sharing his thoughts on his time with Planfarm. You can see the impact he has made laying the Planfarm foundations for what is now a thriving part of Planfarm’s business today.