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Beyond the Bale : September 2017
EUROPE, THE UK AND THE USA For much of the past month I’ve been travelling through the USA, Europe and the UK, meeting with scores of companies, designers, processors and brands who buy or use Australian wool. Their response is overwhelmingly positive. Australian wool is in more stores and in more product ranges than perhaps at any time I can recall. Your wool is ‘on trend’ and in demand both by companies and consumers, which I’m delighted to be able to report. You will find some of the detail in stories in the following pages. However I’ve been completely bewildered to read the rural media reporting domestic issues during this time – and how they starkly contrast with the view of our major customers in the northern hemisphere. So I feel it is important to address here in this report some concerning falsehoods being reported in public forums and in the media over the past couple of months about AWI’s oversight and efforts in flystrike R&D and productivity. OVERSIGHT AWI’s governance structure and business model was built ‘fit for purpose’, multi-level and cascades directly from our Constitution, Corporations Law and other legislation through the company’s operations. That we treat the many (7+) woolgrower representative bodies equally is a good thing and it provides the company with comprehensive feedback and counsel from a wide range of grower groups. AWI’s predecessor, AWRAP, did operate differently, but growers voted with their feet ensuring that when AWI was established in 2001, it was accountable to all growers, not a few agri-political groups as it had been in the past. This is what some are unwisely calling for a return of now. To help inform woolgrowers of the structure of their company we have prepared an insert GETTING ON WITH BUSINESS We are continuing with initiatives to help increase the demand for wool through investments in marketing and R&D – from farm to fashion. Stuart McCullough Chief Executive Officer Australian Wool Innovation that is included with this edition of Beyond the Bale. Please have a look. If you haven’t already listened to AWI’s podcast The Yarn, please do. It’s a good and quick way to hear what’s happening with your levies. It is available at www.wool.com/ podcast and on iTunes. Please also refer to episode 19 of The Yarn featuring the AWI Company Secretary, Jim Storey, explaining in detail our governance principles. PRODUCTIVITY I note recent uninformed comments in the media about alleged lack of work by AWI in the area of productivity; this couldn’t be further from the truth. AWI’s key purpose is to support grower profitability and productivity. Our single largest on-farm research project is the Merino Lifetime Productivity project. We keep growers informed about progress in this project via our website at www.wool.com/ MLP and regularly in Beyond the Bale (see the double-page spread in the previous edition). I encourage those commenting on AWI’s activities to first appraise the roughly 300 projects AWI is funding at any one time on behalf of growers. FLYSTRIKE Flystrike prevention is a complex area and serious health risk to the industry with no easy solutions as woolgrowers know only too well. For 12 years now we have increased the investment in projects to identify a practical and effective alternative to mulesing. We have made progress and we have a number of treatments that are showing promise but we don’t have this problem solved yet. AWI is the only company globally doing any work in this important space and we remain committed completely, so to suggest there is no strategy is ill-informed. The role of a Research and Development Corporation (RDC) like AWI is not to set policy; indeed the Government actually forbids it. So while we do have an extensive Research, Development & Extension (RD&E) strategy and the outcomes of it can inform policy, we don’t set policy. Should any one of the woolgrower representative bodies wish to instruct or mandate their members on animal husbandry practices, then that is a decision for them, we won’t be. “THOSE IN GLASS HOUSES” I am a big supporter of free speech, especially when it's informed. But I do not support airing dirty laundry in public. The recent criticism of the wool industry, woolgrower and AWI activities by MLA’s Managing Director, Richard Norton, is a unique precedent I can’t remember witnessing in my eight years as CEO. We have not to date, and nor will we, play into this tactic with retorts through the media, but we are disappointed Mr Norton chose this path. A simple phone call to either myself or the Chairman would have been more appropriate and professional. POSITIVE WOOL PRICES CONTINUE To end my report on a more positive note, it is pleasing to see wool prices have continued to go from strength to strength in 2017 with auction sales producing some stunning results. While the EMI surpassed 1,400c for the first two months of the calendar year, it has exceeded 1,500c for most of the subsequent months, and even briefly exceeded 1,600c following the recess in auction sales. At the time of writing, the EMI stands at almost 25% higher than at the same period of last season. We all hope these prices can be sustained over the long-term to reward the hard work and loyalty that woolgrowers have demonstrated towards the fibre. I believe the strong prices are due to a consistent and steady long- term shift in consumer sentiment towards the fibre and appreciation for its premium natural qualities. As always, if you have any questions or comments please email email@example.com or call 1800 070 099. UPFRONT 3
In the Shops - September 2017