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Seeding new opportunities 

The deregulation of the ‘single desk’ exporting arrangement and the emergence of small batch marketing is creating exciting new opportunities for the grain sector.

GrainsThat’s one of the key messages that has emerged from the new PIRSA Market Intelligence produced ‘SA Grains Market Overview’, according to Justin Ross, General Manager of Market Development within PIRSA.

“The grains industry has traditionally relied on the bulk handling co-operative system and the ‘single desk’ exporting arrangement to manage the value chain. But we see that with the deregulation of single desk and the growing emergence of small batch marketing, there are great opportunities now for grain growers to control more of the marketing effort, and understand what consumers are looking for in their products,” said Justin.

The overview shows that the grain supply chain is complex compared with other food sectors. The logistics and infrastructure requirements are extensive, while multiple processing steps produce a highly transformed product.

Primary, secondary and tertiary products are sold at retail and food service in domestic and export markets. Attributes that consumers value do not always readily translate through the chain. 

Understanding partner values through the chain can help to target production – rather than just producing a commodity product and letting the world market determine the return.

South Australia’s grain industries are the state’s largest and most valuable food sector ($3.3 billion 08/09). Production far and away exceeds domestic consumption, and exports are a key feature of industry revenue. 

Major consumer products that feature grain include beer, bread and other bakery, noodles, pasta, biscuits, oils and spreads. Other key products are used for food ingredients, animal feed and industrial.

Wheat and barley are by far the largest volume crops produced in South Australia and around two thirds are exported as whole grain in a typical season. Domestic use as human food is a steady – but relatively small market for South Australia’s major grain crops. Animal feed is another key market for many field crops, with the growing intensive livestock production in South Australia driving a consistent demand for feed. 

The complexity of the chain means that customer and consumer values differ through the chain.

Understanding these drivers can provide an opportunity to meet customer needs and offer a differentiated and valued product.

Justin said there were many business benefits in understanding what consumers wanted in a product, and why they preferred certain products.

“Consumer information allows growers to make informed business decisions,” Justin said.
 
Deregulation of the export market for wheat and barley has increased the opportunity to offer specialised products to meet export customer and consumer demands. Values that are important to customers include characteristics of the product such as functionality, quality and credence, while the operation of the supply chain in delivering grain and supporting information is also valued.
Consumers of the end product are looking for food that is enjoyable, convenient, healthy and provides value for money. Increasingly, consumers are also looking for natural foods that are ethically produced. They are also interested in the provenance of their food –where it comes from and how it is produced.

The SA Grains Market Overview is produced by the Market Intelligence Unit within the Market Development Program of PIRSA. The unit undertakes strategic market analysis on markets, trade,
trends and opportunities as well as providing high level strategic market intelligence to Government, industry sectors and industry organisations.

The overview also features profiles of businesses that have understood consumer demands and have developed chains and products to create a differentiated product such as KI Pure Grains (see opposite page).

To obtain a copy of the SA Grains Market Overview visit www.safoodcentre.com.au 

Want to know more?

Contact
Justin Ross
PIRSA
p +61 8 8226 8157
e justin.ross@sa.gov.au