Beyond the Bale - Issue 25 - Woolcheque giving growers marketing strategies
Growers can independently price their wool clip based on the latest daily or historical wool prices
Armidale-based woolgrower Nick McBride (pictured right) uses the web-based Woolcheque for budgeting, wool pricing, price risk management and benchmarking for his Merino wool business.
Two years ago, the McBride family, based in south-east South Australia, bought ‘Dunoon', a 1650-hectare property 50 kilometres north-west of Armidale in the New England district of NSW.
"We run around 20,000 dry sheep equivalent (DSE) at ‘Dunoon', and on our South Australian property ‘Conmurra' we run up to 45,000 DSE, including 400 breeding cattle and have around a 1000-bale wool clip," Mr McBride says.
The McBrides are now using Woolcheque as an additional tool for deciding the timing of selling wool and reserve setting.
"The program lets you know exactly what your clip is worth at any given time and having a current price, along with an historical price mechanism, is really great. Woolgrowers usually spend 12 months growing wool, spend thousands of dollars on shearing and preparation of the clip, only to go into the first sale and take whatever the market says it's worth. That is what I call a fair amount of risk.
"We are at the mercy of the market on any given day and Woolcheque is a tool that brings us more information for making marketing decisions."
Aware that a 19 micron or finer clip is a volatile commodity on any day, Mr McBride says that by using Woolcheque he has gained the confidence to place a realistic reserve that is consistent with the market. Growers of fine wool will find the ‘similar lots' function particularly beneficial: users can view the most recent prices received at auction for the same type of wool as their own. These clear comparisons will help growers gauge an accurate, up-to-date value for their wool.
Bill Cowley, a wool broker with Australian Wool Network (AWN), adds that Woolcheque complements the work done by wool brokers and he encourages growers to familiarise themselves with the website and its tools.
"When selling our clients' wool – and I am speaking as a representative of AWN – we use a wide variety of sources to generate estimates and reserves. Woolcheque is another valuable pricing tool that is available to us," Mr Cowley says. "In this industry, information is king and for growers who have a thirst for knowledge Woolcheque provides some very sophisticated market information and trends.
"Woolcheque provides the historical national averages and price ranges, which is a great benchmark for establishing target prices. A good broker should have the ear of the customer and know what they are looking for and at what price. We recommend that growers consider all this information before deciding what strategy they might adopt when commencing with the marketing of their clip."
AWN often uses Woolcheque for pricing strategies in conjunction with the AWN sales history information.
More information: www.woolcheque.com.au; Emma Turner, AWI project officer supply chain and wool quality, 02 9299 5155, emmaturner@woolinnovation.com
Market data at your fingertips
Woolcheque is a free, easy to use, web-based wool-pricing tool developed and funded by AWI for Australian woolgrowers. Woolcheque allows you to quickly price lots against daily market values, as well as view similar lots sold at auction to verify the price estimates.
The site explains different wool characteristics, shows historical trends and offers tips useful to wool growing businesses.
Woolcheque provides you with more than simply a price: it also allows you to view similar lots to your own and the actual prices they received at auction.
Using your brand and wool classer stencil number, you can access up to three years of your own wool clip test results on the website. By completing the worksheets provided and clicking ‘calculate price' you will gain estimates as to what that wool may reach in today's market.
Woolcheque prices are based on AWEX's national auction data, which is updated after each sale day, and should be used in conjunction with your broker, who has buyer knowledge. Woolcheque is secure to use, requires no special software and runs easily using a dial-up internet connection.
Woolcheque features
- Find your clip – search the AWEX database for your previously sold or offered lots with your brand and wool classer stencil number.
- Daily prices – prices are updated daily and are based on the same pricing mechanism as the AWEX market reporting system.
- Similar lots – shows you a listing of similar lots that have recently sold at auction.
- Premiums and discounts – display premiums or discounts that apply to your wool.
- Price charts – displays market prices over the previous 12 months for each lot and the whole clip.
- Historical prices – allows you to price your clip against longer-term market averages; takes out some of the volatility inherent in the daily market and helps identify long-term price trends.
- Save your worksheet – you can save your clip information on your computer, which allows you to upload your worksheet any time and re-price your clip.
- Prices a wide range of wool – calculate prices on most types of wools sold at auction, including Merino, crossbred and superfine wool.
- Wool characteristics – review information on each wool characteristic, current and historical trends and tips to improve your wool returns.
More information: www.woolcheque.com.au
Return to Beyond the Bale issue 25 index page.