WOOL MARKETING

Southland Times, Issue 22131, 27 September 1933, Page 12

WOOL MARKETING

METHOD OF PRESENTATION. A NATIONAL STANDARD. “The recent joint statement of the New Zealand Woolbrokers’ Association and the New Zealand Sheepowners Federation, cannot be allowed to go unchallenged,” said Mr L. Whittingham Bagley, author of the booklet “Efficient Wool Marketing,” in a statement issued to the Press of the Dominion. “Most people will agree that the auction system has proved satisfactory in the past, and that, with safeguards, there is no reason to make any change in that system. But he is indeed a bold man who will state that the method of presentation of the wool at our auction sales could not be improved upon with benefit alike to the grower, the broker, and the buyers. It may be that the obstacles which apparently are envisaged by the two organizations above mentioned appear at the moment to be insurmountable, but that is only because they have not gone so far, been unwilling either to seriously consider the proposals put forward by me showing how these difficulties can be eliminated, or else, having considered them, have decided to ignore them. In either case the matter cannot be allowed to rest there. It could hardly be imagined that they would deliberately refuse to entertain and put into immediate operation a scheme for better handling and better marketing if it can be shown, as it undoubtedly has been shown, that it can be economically done. Such a policy could only be interpreted in one of two ways; either gross incompetence, or a gross lack of consideration for the growers and buyers interests. Gross incompetence it can hardly be, because numbered amongst the ranks of the woolbrokers are the names of some of the leading men of proved ability in their own businesses. One can only then assume that they either have not so far understood the suggestions that have been put forward, or else have adopted the policy that they arc taking a purely selfish view and are not going to worry about trying to improve the returns for their clients, the growers. “The methods previously outlined can and will, if adopted, prove of immense benefit to the growers, enabling a very material benefit to accrue from two different angles. Firstly, in considerably reducing the actual costs of handling, and secondly, in securing a higher price from the buyers for the wool, by reason of the fact that they will have confidence is what is being submitted for auction, and not, as is so often the case at present, have to allow a margin on their buying price for the ever present possibility that it will not turn out as expected. However, so that the public generally and those directly interested in the wool trade in particular can see that the Woolbrokers’ Association and the Sheepowners’ Federation are entirely wrong in the attitude they are adopting, I will answer the points raised in their statement categorically. In passing though, I must point out that the Nev/ Zealand Sheepowners’ Federation is representative almost entirely of the large grower. Yet the small wool-growers owning under 2500 sheep, account for 28,000 out of 30,500 growers and 70 per cent, of the average wool sold in New Zealand.

“(a) Criticism has been levelled at the practicability of a national standard of classing because of regional peculiarities of the wool due to the geographical and climatic influences. In other words, what is called a 46’s wool at Wanganui certainly has some different characteristics from a 46’s Auckland, or even 46’s Dunedin, and therefore could be used for a different purpose. Fortunately, the decentralization of our selling centres aids rather than hinders the application of a national standard of classing in New Zealand, because it groups naturally and geographically most wools with their regional peculiarities. There are no insurmountable practical difficulties in the way of the introduction of a suitable national standard of classing in New Zealand, and the greatest advantage arises from the fact that, after allowing for seasonal climatic influences, the types would be the same year after year, and would become known by the buyers as reliable. They would not necessarily accept as their own the standard of classification, but they would know that a certain type, according to the standard, agreed with that required by a particular manufacturer, and therefore the purchase of that manufacturer’s requirements would be made easier. No suggestion has been made to alter the auction system of selling of to eliminate the need for inspection of sample bales of wool by the buyers as under the existing system; although in the Argentine, grading to standard qualities and guaranteeing the yield makes possible purchase without inspection. “(b) The bare facts arising from a simnle analysis of marketing conditions and statistics show the advantage the Argentine is enjoying over New Zealand. The fact that the Argentine has made buying easier is reflected in the statistics of the Empire Marketing Board’s Wool Survey, showing that because of their standardized grading and guaranteed yield, the Argentine is supplanting New Zealand’s position in the quantity of raw wool imported into the United Kingdom. The following is an extract from a letter from Messrs H. Dawson and Sons and Company Ltd. wool brokers of London, written to Mr H. J. Wernham, and was read by a member of the audience at the conclusion of one of my lectures:—‘... .The great advantage which South American growers have appreciated during the past ten years, and which has stabilized and increased the scope of their business, is the fact that their wools have been put into store and graded into separate qualities; consequently, Buenos Aires wools have been sold on standard qualities, and offered in larger blocks, very often 200 to 500 bales at a time. This has been very advantageous to most spinners and topmakers, especially on the Continent and in America, where the sorting facilities are not so efficient as in Yorkshire. I feel confident that there is a big market for your shabbier wools if they are better graded, and could be offered in straight lines and in larger blocks.. .’ An appraised clean yield as has been advocated by me would not be the basis for any claims, but would establish an extra goodwill which eventually should be worthy of the buyers’ recognition. This experience would perhaps make practicable and desirable the later introduction of a guaranteed yield.

“(c) No form of compulsion is necessary in regard to binning wool by the growers, though at present they voluntarily reclass or bin 36 per cent, of the average wool sold in the Dominion. But they have a right to demand efficient work to be carried out by the brokers on their own wool, especially when efficiency can be combined with lower costs. The status of the classers and their work in New Zealand is capable of vast improvement. The following is only one of many apt references:— 1 With regard to bulk classing, further extension at the selling centres, etc. would be an advantage to' the trade. The British Wool Federation, however, expressed the desirability of

proper supervision to see that the classing was carried out by competent hands, otherwise there may arise nonuniformity of grading. Wool classing is a highly skilled art, and should be recognized as such, since practical and personal skill counts most.’ “(d) and (e) The owners have been sufficiently genuine in promoting the smaller woolgrowers’ welfare to offer to a suitably representative, and therefore unbiased Wool Council, any benefits arising from the New Zealand rights on a small royalty basis. In other words, their outlook has been wholly national and the confidence in their work is strong enough to allow the right to such a competent body of practical men to examine and accept or reject this free and tangible national offer, but only after a thorough investigation has been carried out. The New Zealand Brokers’ Association and the New Zealand Sheepowners’ Federation ate incompetent to pass any considered opinion on the improved method and equipment for the very simple reason that neither body nor their executives have fully investigated the proposals. Thorough investigation is work for at least two days and cannot be accomplished without my personal knowledge. This is surely also a very potent reason for the formation of a National Wool Council in order to give the smaller woolgrower a chance to market his wool to the best advantage.

“(f) The fostering or developing of overseas markets for wool would be greatly hampered by present selling conditions. However, by establishing in New Zealand a national standard of classing, even with the wool at present reclassed in brokers’ stores, it would enable not only growers’ representatives, but the buyers, to foster further business with foreign markets. The Argentine dealers do not depend solely on buyers to come to them, but because they can offer standardized graded wool they send representatives to England, the Continent and elsewhere, to get more business, and they are getting it at our cost. “In conclusion, I would remind these organizations that I have spent five years in a very thorough business research into wool marketing. However, my present offer to wool-growers in New Zealand will remain national in scope for a limited time, and I will define such an offer to our present Parliament for action as it deems wise. The smaller wool-growers are entitled to the full value of their wool, and are going to get it if it lies in my power to arouse them from their apathy. At the same time the value to the Dominion as a whole must not be lost sight of.”