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GRAIN grower organisations are calling for action to combat market dynamics that currently see Australian grain prices as the cheapest in the world, saying that the disparity between Australian and international prices was the number one issue raised by members this year.

Grain Producers Australia chairman Barry Large said while prices were at historic highs they lagged behind international parity by a substantial margin.

And with crop inputs rapidly rising, he said growers could not afford to leave money behind.

"Record high prices for fertiliser, fuel and chemical mean this disconnect in pricing is causing angst, particularly when we've seen big increases in world grain prices since the outbreak of conflict in the Black Sea region," Mr Large said.

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GPA chief executive Colin Bettles agreed, saying there was particular frustration in the canola sector, where he claimed prices were $A300 a tonne below world parity, despite breaking through a record $1000/t at times in the last six months.

"On the latest numbers we estimate with about 2 million tonnes unsold this represents a $600 million loss, but the volume could be as high as 2.5 million tonnes."

The pair said they had concerns about competition within the grain market and said the grain transport supply chain, in particular was not transparent enough.

"Feedback from our members indicates a critical need for independent, expert analysis to protect growers from lack of transparency and misuse of market power, by regional bulk grain handling monopolies," Mr Bettles said.

However, bulk handler and grain marketer GrainCorp said it had been working with grower customers to deliver a better result for them.

"In an increasingly competitive market, GrainCorp has adapted to provide industry-leading payment terms and prices to growers in domestic and international markets," a GrainCorp spokesperson said.

The spokesperson said growers had the chance to weigh up the various offers in the market via GrainCorp's free online marketplace CropConnect, which has 70 registered buyers.

Feedback from our members indicates a critical need for independent, expert analysis to protect growers from lack of transparency and misuse of market power, by regional bulk grain handling monopolies

And Pat O'Shannassy, chief executive of Grain Trade Australia, the peak body for the nation's grain traders and buyers, said the nation's record crop meant exporters were in uncharted waters in terms of how the supply chain would work.

"It's no secret that we expected to have some constraints given there is just so much grain to get out of the country this year, our exporters can only get so much down from upcountry storages and then onto boats," he said.

He also added farmers may be getting a false sense of where the market was at by only looking at US futures.

"We've seen Chicago (Chicago Board of Trade wheat futures) hitting record levels in the wake of the Ukraine conflict, but while US futures are a handy way of getting an idea of what is happening on the global market they do not always tell the whole story.

"In this latest case what we have seen is a Chicago futures market well in advance of any prices we've seen elsewhere in the cash market due to a number of localised and technical factors.

"You can understand farmers looking at Chicago in isolation and thinking they're well under the market but while it is true Australian wheat is very price competitive at present the basis is not as negative as it looks if you only look at US futures."

Mr O'Shannassy said the industry had a difficult task to manage a robust supply chain with Australia's notorious climate variability.

"This year we are having difficulties in getting all the grain out, but equally it is only a couple of years back there was no exports out of Newcastle, it is hard for investors to expand upcountry and port capacity when there are years where all that costly infrastructure will not make any money."

Mr Large said GPA was pushing for an independent inquiry conducted by the Australian Competition and Consumer Commission into the structure of the grains industry, saying he was hopeful findings would be the catalyst to deliver reform to revitalise competition.

"This type of rigorous, independent analysis hasn't been done since the industry was deregulated in 2008 and is long overdue," he said.

"This work can address these core competition and transparency issues, with a proactive 'health check' of the grain market, using the ACCC's special investigative powers.

"This would provide proper, independent scrutiny of the root causes for these problems and deliver proactive recommendations on appropriate reforms."

Mick Keogh, ACCC deputy chair, said his organisation had been on the record in its wheat port access code submission that the code could be improved by applying it across all grains.

He said to implement an updated code an industry inquiry would be useful, allowing a close analysis of margins through the supply chain, which could bring considerable clarity to these issues.

However, he said without statutory information gathering powers, which would compel industry participants, such as exporters and bulk handlers to provide the relevant information, such a review would not be particularly useful as participants would only volunteer information if they wanted to.

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Gregor Heard is ACM's national grains industry reporter, based in Horsham, Victoria. He has a wealth of knowledge surrounding the cropping sector through his 15 years in the role. Prior to that he was with the Fairfax network as a reporter with Stock & Land. Some of the major issues he has reported on during his time with the company include the deregulation of the export wheat market, the introduction of genetically modified crops and the fight to protect growers better from grain trader insolvencies. Still involved with the family farm he is passionate about rural Australia and its people and hopes to use his role to act as an advocate for those involved in the grain sector.

Gregor Heard is ACM's national grains industry reporter, based in Horsham, Victoria. He has a wealth of knowledge surrounding the cropping sector through his 15 years in the role. Prior to that he was with the Fairfax network as a reporter with Stock & Land. Some of the major issues he has reported on during his time with the company include the deregulation of the export wheat market, the introduction of genetically modified crops and the fight to protect growers better from grain trader insolvencies. Still involved with the family farm he is passionate about rural Australia and its people and hopes to use his role to act as an advocate for those involved in the grain sector.

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