POOL returns estimated at the start of the season are not likely to live up to expectations.
A study commissioned by Wheat Exports Australia has found estimated pool returns during the critical October to March period – when most growers looked to sell their grain – are most likely to be higher than the final return when the pools closed about 12-15 months later.
The WEA has updated a report released earlier this year looking at the relationship between estimated pool returns with final pool returns for the three seasons from 2009-10 to 2011-12.
WEA chief executive officer Peter Woods said the report was commissioned after complaints by growers and the industry regarding a lack of correlation between EPRs and FPRs.
While the 2011-12 pools had yet to be finalised, the WEA made the assumption the EPRs as at October 9, 2012, were equivalent to the FPR.
Carried out by Pricewaterhousecoopers, the study found there was considerable variability in the difference between EPRs and FPRs.
It found the EPRs were, on average, $9 a tonne more than the final price.
The WEA analysis highlights the challenges grain growers face in selecting whether to sell their grain for cash or place it in a pool and picking out the best pool operator.
"The analysis continues to suggest that if future pools follow a similar pattern to those examined, it will be difficult for growers to forecast final incomes on the basis of average EPRs during the decision period,'' the report said.
Emerald Group was one of the worst performers, with its pools having EPRs during the October-March decision period well above the FPR in 2010-11.
Emerald's pools performed poorly during 2010-11 and 2011-12, with the final pool returns below the state average.
The company said the WEA analysis did not consider the impact of quality premiums, pre-commitment premiums or volume payments.
"The reality is that most growers receive a payment that is different to the FPR because of the various premiums they may qualify for," the company said.
"Having said that, the report highlights some things that we have been conscious of for some time: that EPRs are not a reliable indicator for growers when deciding their marketing strategies and that large national pools where prices are averaged are not the best way to go."
The WEA analysis found Viterra showed the greatest variation between prices, with EPRs during 2009-10 higher than the FPR by $2-$13 a tonne on average, but the following year, the pools returned $30-$37 a tonne better than the early estimates.
Last season, Viterra's EPRs during the decision making period were higher than most other grain traders and well above the final return.
Its FPRs during 2011-12 were well below state averages.
The full report can be found on the www.wea.gov.au website.