Asher Valley grain growers lock in prices with millers through three-year contracts

For wheat farmers in the Asher Valley, the price of a harvest has often been decided a long way from the field. A wet season elsewhere or a shift in currency markets could move the value of a tonne of grain by a third within weeks. This harvest, a group of growers has tried to take some of that uncertainty out of the equation.

Through a digital platform set up by the Asher Valley Growers' Cooperative, 83 farms have signed three-year supply contracts with four regional flour mills. The deals fix a base price per tonne for milling wheat, adjusted by an agreed formula for protein content and moisture, and cover around 41,000 tonnes a year, roughly a third of the valley's output.

The platform lets mills post the volumes and quality they need, while farmers list the land they intend to sow. Contracts are matched and signed online, and a shared record of test results at the weighbridge settles any dispute over grade. Fees are paid by the mills.

Giving up the upside

Fixed prices cut both ways. In a year when the market soars, contracted farmers will earn less than neighbours selling on the open market. Wendell Hartshorn, who farms 300 hectares near Netherby, said he had committed only 60 per cent of his expected crop for that reason, keeping the rest to sell at harvest.

I would rather know I can pay the bank than gamble the whole farm on a good autumn.

For the mills, the attraction is reliable local supply with known quality. Priya Castellanos, procurement manager at one of the participating mills in Larchfield, said her company had previously imported up to half its wheat. Buying locally on long contracts, she said, reduced transport costs and made it easier to tell bakers exactly where their flour came from.

The scheme grew out of a difficult season two years ago, when a sudden fall in prices left several younger farmers unable to cover their seed and fertiliser bills. Cooperative members say long contracts also make it easier to borrow, since banks are more willing to lend against a signed agreement than against an expected harvest at whatever the market happens to pay.

The cooperative plans to extend the platform to barley and oilseed next season and has been approached by orchard growers interested in a similar model for apples sold to juice makers.