AWI director urges caution on WoolPoll levy drop

AWI director urges caution to wool levy payers when considering a drop in levy


Wool
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AWI director Don MacDonald urges caution to wool levy payers when considering dropping the current levy rate.

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AWI director Don MacDonald said this year’s vote is one of the most important decisions woolgrowers will have to make.

AWI director Don MacDonald said this year’s vote is one of the most important decisions woolgrowers will have to make.

AWI director Don MacDonald has urged caution to wool levy payers when considering a drop in status quo at this year’s WoolPoll elections.

According to the NSW wool broker, this year’s vote is one of the most important decisions woolgrowers will make in determining the industry’s future. 

Elected onto the AWI in 2017 receiving an impressive 136,384 votes, Mr MacDonald said getting all woolgrowers to vote is number one priority. 

“This was a line I took in the elections – people complain about a lot of things, but when there is only a 25 per cent turnout of voters, I find that very disappointing,” Mr MacDonald said.

“There are five options that people have to choose from, and the first thing they need to do is take part, vote.”

Mr MacDonald maintains the wool industry hasn’t achieved the current highs completely because of a drop in supply, it has got there because of an increase in demand. 

He said his stance is to maintain status quo, and recommends a levy rate of 2pc. 

When asked by Fairfax Media why the 1pc levy option wasn’t included, Mr MacDonald said after the last election 1.5 was recommended by a number of industry bodies, so that was put in place instead of 1pc. 

“You are never going to please everyone with this. There are people asking why have 2.5pc or 3pc, and there are always going to be people that are going to vote 0pc, and you have to have that 0pc option” he said. 

“The people who want 1pc are going to have to make a choice whether they vote 0pc or 1.5pc.” 

Having been involved in the wool industry since 1975 as a wool classer, shearer, wool broker and grower, Mr MacDonald said he shares a familiarity with woolgrowers of experiencing long periods of falling production and poor markets.

“We have finally got to a point where we have a market that is giving all the right signals for people to increase production, but we are being hit by drought, in NSW and Queensland in particular and certainly a fair proportion of SA and Vic,” he said. 

“We don’t know when the drought is going to finish, but we do know that production is going to keep spiralling downwards. Every month that this drought goes on, production falls even further.” 

He said there are a number of triggers that will influence producers’ decisions to offload more sheep. 

“We are at the point in NSW that as the weather warms up, and with no rain, those crops that are planted now, we can write them off,” he said. 

“That is another trigger for people to offload stock.”

Combined with the low lambing percentages of this year, as well as the year previous, Mr MacDonald said his view of the wool production forecast for next year and the year after will be substantially lower than the current official forecast. 

“I am not saying they have got it wrong, because they put the information out two months ago, and the drought has got worse since then,” he said. 

“But you have to ask yourself the question, if production keeps falling, the wool market has to keep rising an awful lot to maintain levies. 

“That is a real unknown. We are moving into an area where there is going to be pushback. I don’t think the back-end is going to fall out of the wool market, but you would be game to predict it is going to maintain a level of 2100 cents.”

He said AWI only re-entered marketing eight years ago and they are just starting to get traction out of it. 

“They are just strating to hit their sraps,” he said. 

“If production keeps falling and the market comes off the boil, in three years time, they will have no reserves left and they will have to pull up stumps on their marketing and research and development. 

“We will be back to where we were 10 years ago.” 

WHAT YOU NEED TO KNOW

  • WoolPoll voting will run from September 17 and close November 2, 2018.
  • Results will be announced at the AWI AGM in Sydney on November 23, 2018.
  • The voter information kits, which contain the ballot papers and voting instructions, as well as the voter information memorandum will be sent in the mail on September 17. 
  • There are five levy rate options for woolgrowers to consider: 3pc, 2.5pc, 2pc, 1.5pc and 0pc.
  • All Australian woolgrowers who have paid wool levies totalling $100 in the past three financial years are eligible to vote in WoolPoll 2018.
  • Eligible woolgrowers can vote online (www.woolpoll.com.au) by mail or fax.

The story AWI director urges caution on WoolPoll levy drop first appeared on Farm Online.

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