GRAIN Corp is closing down the Delungra grain storage operation, effective immediately, said Grain Corp regional manager Josh Connell.
The closure is a bittersweet situation for local producers.
The facility has been owned by Gran Corp since 1993 after the privatisation of the grain network in 1991.
“It’s as a result as a bit of a decision to invest in rail. Delungra will be closed and won’t be opening as of this harvest,” Mr Connell said.
“What the business has done is decided to invest $200 million the in the network with the intention of returning $10 a ton to the grower.
“Our primary focus on that is rationalisation of network, efficiency gains and taking more ton off-road and putting it on to rail.”
“As part of that, there’s been 120 site closures and about 80 redundancies.
“There’s no displaced people as far as Delungra’s concerned, but certainly, unfortunately, the site is closing.”
David Flick has been president of the Delungra Silo Committee.
He affirmed Mr Connell’s statement but seemed dismayed by the decision.
“They want more of a focus on the export side of the job instead of the domestic market.
“That’s not helping us up here,” Mr Flick said.
He outlined factors pressuring local growers were distance to haul excess grain that can’t be stored on site, transport cost and a diminishing demand from coastal pig and dairy famers.
Mr Flick also said the loss of their single desk meant famers were facing variable prices at silos, and competition from early harvests in the region.
All the same, the facility has been actively used.
“We put 6000 ton last year, we put 11,000 the year before that, I think we put 15,000 the year before that.
“Grain Corp will tell you they averaged it out to about 10,000 ton, but I think we’ve put more than that in there in the last four years, and the last four years we’ve had pretty ordinary years as well,” Mr Flick said.
“Delungra itself is still a viable option, but because of the company, with their restructuring, they want to lend more to the export side of it they prefer sites on the rain.
“ I think if our site was on the rail, it we’d be still going.”
Mr Connell thought it unlikely Grain Corp would invest in the resurrection of the rail link from Moree to Inverell or a line to Armidale to support the grain stores.
“It’s pretty much unviable,” he said. The facility was open to expressions of interest for sale or lease.
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“It’s certainly a strong domestic market,” he said, implying there were opportunities for investor interest in the Delungra facility.
The question of adequate on-farm storage for grain could be an issue if farmers realise good seasonal results. With costs of Mr Flick said there was not enough on- farm storage in the region.
“No way at all. I grow myself.
“If we get a good season this year, I’ll have 1500 ton.
“I can hold about 300 ton.
“I think we could be in for interesting times if we have a good season,” he said.
“Because they’re a private company; they can do whatever they want.
“As a grower, I am upset that we’re losing it.
“But that’s progress,” he said.