The Noodle Wheat Industry in WA
- Western Australian grain growers produce almost all of the world’s exported noodle wheat desired by the important Japanese, Korean and Asian markets
- With an estimated trade value of up to $0.5B AUD per year from the sale of approximately 1.6 to 1.8m tonnes of exported blended noodle wheat from WA
- Noodle wheat (ANW) is blended with WA sourced APW to customer preference which varies but is between 40%-60% ANW and 60%-40% for APW
- The Japanese Government buys through a rigid single tender on behalf of the flour mills and most of the Koreans buy collectively through an association
- WA grain growers have tended to reduce their noodle plantings in recent years due to the risks of noodle wheat growing including:
o Noodle growers face the risk of missing the “protein window” resulting in “cliff face” prices for lower grades; and
o yield risk with growers opting for higher yielding hard varieties
Challenges and the Noodle Report
GIWA and AEGIC released a report on WA’s noodle wheat industry in late 2015 which highlighted the many current challenges threatening the WA noodle wheat industry. The report was based on several years of comprehensive industry wide research and consultation. The report found that:
“without proactive intervention the chances of there being a similar-sized noodle wheat industry in ten years appears small.”
Unfortunately, to date, that report has not resulted in any solution or action which would address the vulnerability of the noodle wheat industry.
The founders of the Noodle Co-op realised that the situation required urgent action due to the challenges identified in the noodle report and their own enquiries which revealed:
1. Important noodle customers were dissatisfied with communication, quality, supply and price issues and expressed a possibility of considering alternative suppliers (eg. Canada);
2. Long term noodle wheat growers continued to reduce their noodle plantings due to receiving inadequate prices for their noodle production on a risk adjusted basis;
3. The introduction of higher yielding alternative varieties such as Mace and Scepter;
4. A lack of any effective Australian noodle wheat industry market development; and
5. The noodle market is dysfunctional whereby customer’s price signals are not being fully received by growers and a collapse of the market has only been avoided due to a few years of relatively good seasons.
The Noodle Co-operative is focussed on providing practical solutions for the above issues.
The Noodle Co-op is well advanced in its efforts to obtaining industry wide support from key stakeholders for the implementation of an innovative process which aims to obtain an additional payment to noodle growers to provide a fair return and reduce some of the risks of growing noodle wheat :
1. The Noodle Co-operative acts on behalf of its members who are noodle wheat growers.
2. The innovative solution involves no change of participants in the current noodle wheat supply chain eg. no change in the way noodle grain is produced, marketed or traded.
3. The Noodle Co-op will require detailed grower information from its members and packages this information in a way that is valuable to noodle supply chain participants.
4. The information provided by grower members is of the type that is normally provided by them for no payment.
5. The Noodle Co-op has already been working on behalf of member’s to gain acceptance from our customers to provide payment for this new service.
6. The Noodle Co-op will undertake regular economic analysis to understand the economic risk and the additional payment required by noodle growers for growing noodle wheat.
7. The Noodle Co-op has gained non- financial support from WA State Government which will assist through DAFWA with any requirement from customers such as the Japanese governmental bodies (MAFF) in terms of any inter-governmental involvement.