Post farm-gate selling costs
Post farm gate costs can be one of the largest expenses for a farm business totalling around $100/ha for some mixed farm businesses. These costs include freight, commissions, levies and royalties and account for around 15-20% of total costs. They will vary depending on production volume.
A grain grower 200km from port will typically pay around $54/t in levies, receival fees, freight and port fees to CBH in WA. As prices are quoted free in store (FIS) port fees are already deducted from the prices so the direct out of pocket expenses are in the order of $30-35/t. On an individual grower basis these fees are set by CBH and not negotiable.
Ways of lowering post-farm gate costs for your farm business include:
- Understand the fee structure of alternative supply chains.
- Evaluate the costs of storing on farm and freighting during non-peak periods. Storage and holding costs need to be considered in this evaluation. It is also important to ensure that you monitor price movements to ensure that value does not significantly change.
- Seek out alternative supply chain paths to market, for example selling direct to customers, abattoirs or container exporters to avoid additional supply chain costs such as agent fees.
- Investigate using on-farm storage and contracting with a trucking company for freight.
- Set up a contracts or arrangements with freight companies so that logistics can be efficiently managed.
- If possible, backload inputs.
- Levies are mandatory and royalties depend on the grain variety. Not much can be done at an individual producer level to reduce these.