Large plastic bins will be more necessary for Australian farmers as they plan to keep more grain on-farm in the next several years, according to a Rabobank forecast.
By 2025, on-farm grain storage will increase by up to 20 million tonnes, which will represent up to 45 per cent of the average crop harvest for the summer and winter of that year. Farmers should then plan as early as now on how they could manage the cost of storing grain on-site.
Better Quality for Competitiveness
The expected increase in on-farm storage stems from companies’ desire to be competitive, which would be possible by reducing costs on domestic bulk handling and logistics. Some of these initiatives included replacing several smaller silos with centralised and larger ones or replacing old silos with new storage facilities.
This allowed them to pay lower fees and incur rebates through rationalising the bulk handling networks. Not only that, but it also affects the supply chain for grain distribution both in Australia and overseas. Product rationalisation means reorganising a company’s certain operational procedures to improve efficiency. In the agriculture sector, it could be as simple as switching to large plastic bins from smaller ones for storing produce.
Other Rationalisation Strategies
Aside from grain storage, the industry also invests in better port-terminal capacity via faster delivery times. For instance, the Lucky Bay project in South Australia would save $15 per tonne of grain shipments due to the presence of a nearer port.
Containerised grain for overseas distribution serves as another way to rationalise operations. Some are marketed in Asian countries such as China, Japan, and South Korea. Australian farmers also use boxed trading for other regions where bulk shipments are not possible.
Farmers do not always have to think big when planning to improve their operational efficiency. However, any change in handling bulk products should be planned with the aim of reducing expenses.