Strong Milk Price Boosts PGG Wrightson Earnings
Strong farmgate milk price is helping boost investment on farms, says PGG Wrightson chief executive Stephen Guerin.
Industry initiatives are underway to unify fragmented efforts to return the industry to its former glory. The Government is also signalling its support.
But for the wool sector to fully recover from its doldrums, farmer engagement is key.
That’s why the recent announcement by leading wool companies Wools of New Zealand and PGG Wrightson to work on improving logistics gives the wool sector new impetus.
As wool traders, both Wools of NZ and PGW have realised that operating half-empty shops is a loss for everyone – traders and farmers.
Wools of NZ, a farmer-owned co-operative, and PGW have decided to look at collaboration to reduce costs, improve asset utilisation and help secure a stronger future for wool growers and the sector.
Their decision to share logistics where appropriate is in response to the overcapacity across New Zealand’s wool logistics infrastructure following a long-term decline in production volumes, which has driven up operating costs. The move comes as the Wool Alliance is announced – wool industry organisations working together to revitalise the strong wool sector.
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As Federated Farmers meat and wool chair Richard Dawkins points out, a move towards a more efficient supply chain is worth celebrating.
However, he quickly adds that this announcement is a discussion about efficiencies in a declining sector and controlling costs. Ideally, the sector would be celebrating market driven premiums, profitability across the supply chain and subsequent returns back behind farmgate.
Collaboration between wool means fewer half-empty wool stores, and better wool handling and the whole system becomes more efficient and cost-effective.
Wool farmers are hopeful that this initiative will save costs and improve grower returns.
And these cost savings can also be invested to realise higher value end uses and further supply chain efficiencies.
To progress as a sector, a combination of corporate and farmer profitability is essential and greater collaboration among key players will be key.
Let’s hope that this time the wool sector unites to deliver tangible benefits for all stakeholders.
