Things to think about this spring: Wool
With spring fast approaching, there are several actions that woolgrowers should be taking to ensure success in the upcoming season.
We checked in with Elders Wool Business Specialist Samantha Wan to discuss the processes that producers need to be implementing, and the products and services at their disposal to help them protect and grow their business heading into the spring and summer months.
For advice on the health and wellbeing of your flock, and a list of relevant Elders products and services to help you along the way, check out our sheep health piece.
Sort out the backend
Samantha’s biggest piece of advice for producers is to invest time in updating and streamlining the administrative processes of their business.
“As we get into the second half of the year, now is the perfect time to conduct a spring clean to ensure the backend of your operations is running smoothly. With increasing market competition, it has never been more important to make sure unnecessary administrative costs and errors aren’t eating into your profits,” she said.
“There are a host of steps producers can be taking to minimise administrative issues and costs, and a number of products and support services offered by Elders to help producers along the way.”
Make sure you’re up to date with Classer Specification paperwork
The process of getting your wool from the farm, onto the truck, and distributed ready for sale is dependent on employing the most up-to-date and comprehensive paperwork processes.
“Inaccurate, incomplete and even missing paperwork continues to plague the industry, causing delays and mistakes along the supply chain that ultimately eat into growers’ earnings. Taking that extra time now to ensure your processes are comprehensive and up-to-date can save you significant time and money down the road,” Samantha says.
The recent updates to the National Wool Declaration (NWD) have, by design, made older paperwork and frameworks redundant – so it is crucial you are working with the latest templates as circulated in this season’s
Elders Classer Specification package.
Samantha has identified Elders’ Wool Classer Checklist as one of the most important assets within the package – a comprehensive guide to exactly what you need to do to ensure the process of getting your wool sold is as smooth as possible.
“The checklist covers everything from scale accuracy and lot sizing, to listing accuracy and including special instructions. If you are able to tick-off everything on your checklist, you will have no problems with your wool.”
Manage your risk
As with all commodities, price volatility is a risk that must be managed by producers. Samantha recommends producers consider entering into Guaranteed Minimum Price (GMP) contracts as a way to reduce uncertainty.
“GMP contracts allow wool producers to lock in a base price for wool at a specified future date, removing the inherent downside market risks without compromising their ability to benefit from upside market trends,” Samantha says.
These contracts allow producers to pay a premium to have the option of no contract if the market price is above the contracted base price at settlement. The maximum loss on the contract is simply the premium cost, which is determined by the option seller based on base price, time period and market settlement. For further details and pricing, consult your District Wool Manager.
Optimise your cash flow
“Cash flow, irrespective of what season it is, must always be front of mind for farmers. There are a range of services available to producers, such as Elders WoolPlus, Shear Cents and financing through StockCo, that can help make their cashflow management simpler and more productive,” Samantha says.
Elders WoolPlus advance provides wool growers with access to a larger proportion (up to 50 per cent) of their expected wool proceeds, significantly earlier than traditional shearing advances (up to six months prior to wool sale). This accelerated and improved cash flow provides growers with unprecedented financial flexibility when it comes to wool.
Elders Shear Cents provides you with 90 days interest free on all farm supplies required for and around shearing time. Whether its packs, drenches, vaccines, or other equipment, you can enjoy the benefit of using now and not paying until your proceeds are in.
Furthermore, in partnership with strategic agri-finance provider StockCo, Elders can offer livestock finance to producers looking to restock and capture trading opportunities. StockCo provides up to 12-month financing om up to 100 per cent funding for sheep purchases, with no deposit or capital input required. Producers then farm the stock through to its maximum sale value and, once sold, will receive the sale value less the purchase price and finance cost. With a simple application process, it allows you the flexibility to trade stock when and how you wish to capture all opportunities available.
For more information on any of these finance products, contact your local Elders branch.
Consider alternative selling platforms
Elders provides clients with a range of livestock marketing options, including online, real-time auctions through AuctionsPlus. AuctionsPlus is the market leader in providing online auctions services to the rural community, facilitating the most efficient transfer of livestock between buyers and sellers. AuctionsPlus allows commodity transactions, reserve price setting and legal change of ownership without the seller, buyer or product having to come together physically at the time of the sale.
Protect your assets
“For producers, it is important that they have peace-of-mind that their product is insured once it leaves the farm. Elders Wool-in-Transit Delivery Warranty provides this, protecting against financial loss due to damaged or stolen wool from the sheep’s back, to the wool store,” Samantha says.
Cover is automatically applied when you consign your wool with Elders. Warranty costs are automatically deducted from your transactions and will appear itemised on your Elders’ account sale under charges. No paperwork is required by you.
“With COVID-19 having a significant impact on where and how we get around, it can be hard for producers to physically attend wool auctions. Even if you can’t get to a wool sale, there may still be an option for you to watch it online,” says Samantha.
“It is important that affected producers get in touch with their DWM to see what options are available to them when it comes to virtual auction attendance.”
The Elders business has been built around primary producers and their needs throughout the production cycle. We have built a team of dedicated agribusiness experts to help you achieve your goals in crop growth and have the farm supplies and technical services you need to maximise your farm’s potential.
StockCo : Terms, conditions, fees, charges and credit assessment criteria apply. You should seek advice on the appropriateness of products in relation to your particular circumstances. Products are distributed by Elders Rural Services Australia Limited ACN 004 045 121 and issued by StockCo AgriCapital Pty Limited ACN 604 825 747
For more information on how Elders can support you this spring, contact your local Elders branch or District Wool Manager.