To market, to market: a new guide
A new educational guide for woolgrowers provides information on various methods of marketing wool, other than auction, and the inherent risks associated with each method
At some stage, every woolgrower will question the marketing of their clip. Stick with the auction system? What about forward contracts? A new guide helps growers answer some of these questions.
Eighty-five per cent of Australia's wool clip is marketed through the auction system, but through grower feedback, AWI has found considerable interest in exploring other marketing options. In partnership with Tasmania's 8x5 Wool Profit Program, AWI has just released a guide to wool marketing and it is now available to all Australian growers.
Paul Swan, AWI's knowledge services manager, says the guide sets out to demystify the terms and conditions of the various options available to woolgrowers.
"Feedback from grower groups was that they are extremely interested in how they can market their clip, but there has been no one place they could study the options and compare how they would suit their operation," he says. "So the aim was to produce a clear, concise guide that was easy to access and which growers could work their way through – and feel more in control of their wool marketing.
"We recognise that while the auction system is still the most popular way to sell wool in Australia, this may not always be the case and growers are keen to explore all options."
The guide covers the four key marketing methods, other than auction, used in Australia. Robert Wallace of Quality Consultants, Launceston, was engaged to research and write the 80-plus page document.
"It was not the intent to cover every available option for direct marketing, but more the general arrangements that are in common practice today," Mr Swan says. "The guide also looks at the risk associated with direct marketing of wool and steps which can be taken to reduce that risk."
The 15 per cent of the clip sold outside the auction system is sold privately on-farm or to local wool-handling facilities. Included in this is wools sold by private treaty, forward sale and other methods, which include progressive tender, price-on-result, electronic offer boards, direct-to-mill and sale by value-adding.
"It is the methods of marketing other than auction that AWI receives the most enquiries about," Mr Swan says.
The guide also takes the form of a workbook with real-life case studies and example scenarios with areas for woolgrowers to take their own notes. At the back there is a template which can be copied and used to calculate the cost of production.
More information: To obtain a copy of the guide contact the AWI toll-free helpline 1800 070 099. See related article 'Workshop gives producers access to best wool-chain intellegence'.
Return to Beyond the Bale Issue 26 index page.