Jemalong Newsletter Online

Welcome to the first Jemalong Wool Newsletter Online.  Whilst you may be reading either an emailed or printed version of this, you should know that this very newsletter is viewable on our website.  It has been some time since you saw a Jemalong Newsletter.  We used to endeavour to publish a newsletter quarterly, however this has proven both time consuming and costly.  Since the last newsletter, we have been working towards bringing you the newsletter in this format.  It is our intention from now on to bring you a monthly, online newsletter, and we will not be producing a printed version.  Part of the problem with producing a newsletter is that the information quickly becomes dated.  An issue may be relevant in September, but by the time it is printed and posted, several weeks may have passed.  By compiling the newsletter this way and delivering monthly, the information will be far more meaningful and delivered in a much more timely way.  This is both the beauty and the power of the internet.  We have spent considerable time and money over the last seven years developing our website, our link with Wooltrade, and your link with us.  We beleive that this is the way we have to go.  At the risk of sounding somewhat "cliche", time is money, and every second counts.  Whether delivering a newletter item, or selling a line of wool, it can be done most cost effectively "on line".  We have proudly led the industry in this area, and we will continue to develop our site and our internet capablities.  

Rowan Woods

Where to from here?

When auction sales resumed in Sydney, Melbourne and Fremantle after the mid year recess, they did so under a cloud, and the  weight of some additonal market pressure from China, in the form of what we now know to be the freezing of quota.  During the recess, the Chinese Government decided to suspend any further allocation of quota until September.  To understand what this means, it is necessary to understand as much as possible about the whole quota concept.  China has an annual global quota for the quantities of various commodities which can be imported into the country.  The annual quotas for wool are 287 million kilograms of greasy, scoured and carbonized wool, and 80 million kilograms of top.  Importers and mills apply for quota on a progressive basis throughout the year.  This year, as at the end of May, 147 million kilograms remained to be allocated, or 140 million kilograms had alreadly been allocated for the January to May period.  This is an average of 28 million kilograms per month.  However, at the end of July (just before sales were due to recommence) the Chinese Ministry of Finance and Commerce (MOFCOM) advised that only 15 million kilograms remained to be allocated.  This would mean that 132 million kilograms had been allocated in the six weeks since the end of May (remember 140 million kilograms was allocated in the 5 months up to end May).  It would appear then, that over 100 million kilograms of quota allocation was unfilled.  This is not the first time MOFCOM has temporarily suspended processing quota applications.  They did it in November last year, but at that time of year, the impact on the market was minimal.  This is MOFCOM's way of ensuring quota is not exceeded.  It was always expected there would be a review of quota allocation, just not this soon.

Now, six weeks later, we await the announcement of new quota for next year, expected to be 20% reduced.  If that does in fact prove to be the case, will it hurt our market significantly? A continuing shortage of supply of greasy wool to the market will remain an over-riding issue.   The "dip" the market experienced immediately after the recess was a result of a large offering, a very high Australian Dollar, and obvioulsy the uncertainty of the quota issue and how it effected buyers.  Today we have much smaller offerings, the dollar reasonably steady again, between 82 and 83 cents US, and no end in sight to the returning drought conditions.  Wool production will decline further in the next year, and the market will rise again, but when and by how much is the real question.  Quota issues can only be solved at government level.  In the meantime, growers should prepare for the market when it returns to the levels we saw in March, April and May.  This may occur sooner than you think.  Be ready to take advantage of it. 

Take heart from the fact that no matter what you throw at this industry, it just keeps getting back up.  It's really like the fibre itself.  Durable and resilient.  It needs to be.  Let's just hope the people who grow it can remain so.

Code of Practice

The Australian Wool Exchange (AWEX) has just released the latest version of the Code of Practice for the Preparation of Australian Wool Clips. This document was created after extensive consultation with industry, yet for some reason seems to be attracting as much criticism as ever. Much of this criticism is being leveled at the descriptions being recommended by the code. Considering there have been over 8,500 descriptions on record (no, not a typo, eight thousand, five hundred) for any one year, it’s no wonder there have been calls to minimize their number, or the number of variations. At Jemalong Wool we feel this criticism is unfounded and the code should be at least given some time to work. As with all codes of practice, it is subject to review, and the opportunity to make changes will come around again in three years time.  In the mean time, we have found that most criticism comes from those who either haven't read the code, haven't understood the code, or those who simply object to change.  As mentioned earlier, most criticism centres around descriptions.  For many years we have been advocating that fleece wool should be described as simply AAAM because it is not the description that determines price, but the objectively tested characteristics.  Until now, you would typically describe the main line of a typical merino clip as AAAM.  This code does not change that.  Until now, a broader line may have been described as AAAM, AAA COM, AA COM, BBB COM, BBB, AA, A , AA COM, A COM, etc, etc.  This is simply not necessary.  The wool will be tested and will (hopefully) test broader than the main line.  There also seems to be some perception that you need to brand PCS, BLS, LKS, CRS, STN etc with AAAM as well.  Anyone who has bothered to read the document properly will realise that this is totally optional, and was only made optional for the benefit of some superfine clips where this may be required.  The only mandatory requirement with the new code is breed.  That is, the M, the CBK, the DN etc.  A typical merino clip will have a main line of AAAM.  There may be a AAAM line off several different mobs, but that has always been the case.  No change there.  There may be one (or more) broader lines.  These can still be described as AAAM for the reasons mentioned above.  In the wool book they can simply be recorded as "broad line" or for what ever reason they have been excluded from the main line.  You can still use AAM for an inferior line of wool.  It's in the code.  The new code recommends a AAAAM for Premium lines.  A Premium line might be for superior handle, crimp definition, strength, or all of the above.  The skirtings need only be MPCS.  That's all.  The bellies need only be MBLS, the locks MLKS etc.  The new code of practice is no more complicated than that. 

The Dark and Medullated Fibre Risk Scheme

The Dark and Medullated Fibre Risk Scheme (DMFR) is now far more than just a scheme. It is now an essential part of producing and marketing a merino wool clip. Jemalong Wool has supported the scheme from it’s inception. We see it is as essential for Merino Wool Producers to be able to promote their product as being free of the risk of contamination from dark and medullated fibre, and to protect the “white wool” reputation of the Australian Industry.A reputation earned over 200 years of breeding and selection. Most of our clients already declare their status, and most are free of dark and medullated fibre risk, however some have been taking their white wool status for granted and in areas where the exotic types are not prominent, are failing to make their declaration fully, or at all. This has been noticeable from the Monaro in particular, a shame when you consider some of the worlds best merino fibre is produced there. From next season, we will reserve the first section of all our catalogues for clips which are declared as risk free, and will be offered as a premium section of the catalogue. In fact, we feel so strongly about this we have moved to make the declaration a compulsory requirement for growers wishing to sell wool in the premium section of our catalogue. Wool buyers have requested such a move from brokers. Clips not declared will have to be offered in a non declared section. Fibre shorn from the progeny of a shedding breed of sheep will not be offered for sale in a Jemalong catalogue.   All you need to do to benefit from this programme is complete the declaration at the bottom of the Jemalong Classers Specification.  If you don't have one, you can download one from our website, or call us and we'll fax you one.   Completing this section means filling in the mob details, their ages, crutching status details etc, and then ensuring you SIGN THE DECLARATION.  Unsigned is the same as not making the declaration at all.  Pictured below are some of the breeds which need to be declared for in Merinos.  These are the breeds which produce and shed dark and or medullated fibre, and threaten the reputation of the merino wool industry.   

Damara		Dorper		Wilti Pol
Karakul		Awassi

New Web Site

Over the last six months or so, we have been further developing our website to make it more user friendly, but moreover, to make it more "online" than the old one.  Apart from some cosmetic changes, the major changes will be to the Home Page and to the Results and Estimates page (pictured above) once the grower has logged into their account. We have elected to dispense with the photos on each page and move to a plainer website to facilitate faster downloading. The daily market reporting, which had been a scrolling tickertape across the page, has been replaced with a colour coded table of micron price guides and a corresponding colour coded graph. This will enable visitors to our website to view a daily market report quickly without having to wait for their particular micron price guide to “scroll across” the screen. The Results and Estimates page has undergone a total re-write and now allows the grower to issue instructions for auction sales and for Wooltrade independently of each other. This page is also now a “live” page with all instructions “updated” taking immediate effect. The grower will be in total control, down to the second, of their reserves, and their  wool’s access to the market. The new page also allows a safety net feature whereby a reserve will not be allowed to update on the first attempt if it is below the estimate. The grower will be prompted to check his submitted figure is correct.   We are continually striving to make this feature of our system better, and in so doing, differentiating ourselves from our competitiors. 

New Staff Members

Wendy Gill has joined the Wool Administration staff at Jemalong Wool in Forbes. Wendy holds a degree in Agicultural Science form the University of New England. The youngest daughter of a third generation merino sheep producing family from Albert (near Tottenham) in the Central West of New South Wales,Wendy attended primary school at Tottenham Central school, before heading to Bathurst’s All Saints' College, for her secondary schooling. Following high school, she spent a year overseas on a GAP program exchange with schools working as a tutor/mentor in the United Kingdom, and whilst there, spent much time travelling throughout Britain, Ireland, Europe and the United States. After returning to Australia, Wendy undertook a Bachelor of Agricultural Science degree at the University of New England at Armidale, graduating in 2005. Since graduation, Wendy has worked in the central west and far west regions of New South Wales in a number of roles in agricultural research and agronomy, before taking up her position with Jemalong Wool in March 2007.

Also joining the Jemalong team this year is Stuart Bennett who has taken up a postion in technical services at Cooma

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