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December 2020, Woolproducers President Report

Welcome to my final report for 2020.
 
As is always the case there has plenty of interesting developments in the wool industry in 2020. The two dominating factors have been the seasonal conditions across the country and the impact of Covid-19. Both have impacted the wool industry and provided further evidence of the resilience of the industry.
 
The first quarter of 2020 saw the start of a significant change in the seasonal conditions across much of eastern Australia. For many the rains came and have continued resulting in it being a magnificent season. There have been good rains across many previously drought affected areas, but not all of the pastoral zone and Western Australia has had a modest season with a lack of ground water likely to impact the stock carrying capacity in the summer of 2020/21.
 
The global Covid-19 pandemic had a swift and serious impact on the world wool trade. Retail discretionary apparel spending reduced by over 90% in many markets and this led to a fall in demand for greasy wool to refill the pipeline as it was not moving out the other end. Consequently, the EMI fell by over 45% from January to July. The market has shown some real resilience in recent months with it rebounding off those winter lows to be just under 1200 c/kg, but with some increased volatility in recent weeks.
 
Further, due to restrictions in Australia there were small changes that had to be made to both on farm practices and the sale of wool in order for the trade to continue.
 
WoolProducers Australia (WPA) worked with the NFF and others to ensure the wool Industry was considered an essential Industry and allowed to continue operations during the initial response to Covid-19. This was achieved early on with the federal government but took a little more time with some of the states. WPA worked with the Shearing Contactors Association and the Western Australian Shearing Industry Association to put in place protocols to ensure shearing could continue in all jurisdictions. Further, we led, organised and contributed to work that had to be done to allow wool auctions to continue as normal.
 
At this point I would like to acknowledge our CEO, Jo Hall, who put in a magnificent effort to ensure woolgrowers interests were represented at every possible point that Covid-19 could have impacted us. Jo sat on several dozen National Auction Selling Committee (NASC) meetings (daily for several weeks) to ensure wool auctions could continue. As well her tireless work with AWTA, AWEX and the Shearing Contractors to ensure shearing and wool transport could continue. Thanks Jo
 
In May of 2020 WPA conducted a survey of woolgrowers and received over 200 responses, to ascertain how Covid-19 was impacting them. From this we developed a list of recommendations around things that would play a constructive role in enhancing the recovery for woolgrowers. Early on we identified that shortage of shearers could impact the whole industry, with NZ shearers unlikely to be in Australia for the busy spring shearing. Despite these warning unfortunately the government did not act in a timely manner and many woolgrowers are now battling to find wool harvesting staff.
 
During this WPA has, despite the hours taken up by Covid-19 continued to progress a number of other initiatives to benefit woolgrowers.
 
There has been important work with our trade officials to ensure they understand, value and incorporate our production systems here in Australia as part of the negotiations with both the EU and UK Free Trade Agreement negotiations. We have unique climate risks here and many varied production systems for the same product here in Australia as well as robust regulatory systems and they need to be defended. We are now more confident that our government will advocate this position but will be keeping a keen eye on these matters during 2021 as negotiations continue.
 
Other trade areas of which WPA represented the industry as well as provided submissions into include India – Australia Wool MoU proposal, the Australian China Relations Institute report, Australian Indonesian Business Council, proposed Swiss delegation visit (which was ultimately cancelled due to travel restrictions), Joint Standing Committee in Trade Diversification, ChAFTA review and of course general China trade relations.
 
More recently WPA as members of Animal Health Australia (AHA) conducted Exercise Argonaut. This was an Emergency Animal Disease (EAD) preparedness training exercise and involved the federal and state governments, wool handlers, brokers and exporters and many others that would be involved in the likely scenario should an EAD outbreak that affected wool, occur here in Australia. We will be receiving the final report from the exercise soon and it will lead to gap identification, further training requirements and lead to the development of information for industry about how to manage a response if one occurs.
 
We have seen the impact this year of serious biosecurity issues so it has been very timely to reinvigorate our industry preparedness should an EAD outbreak ever occur.
 
Also, WPA was successful in obtaining a grant from the federal government to conduct a review of wool traceability systems for our industry. The project is looking at what requirements we need for our customers, what we need to ensure our systems are first class in Australia and how it might all be improved, whilst trying to reduce any duplication of expenditure, most of which gets paid for by growers in the end. WPA was one of just 16 project grants provided out of 168 applications and we look forward to 2021 for the project to report its findings.
 
The Sheep Sustainability Framework has just closed a period of public consultation for final development. This is a joint initiative of WPA, Sheep Producers Australia with support from AWI and MLA. There has been lengthy and genuine consultation throughout 2020 with the wool industry and many stakeholders around the world to develop the metrics that we will be reporting on. This will lead to an unparalleled level of transparency for our industry which will in the long run provide transparency and assurance to our customers and stakeholders about our practises and place in the global protein and fibre markets.
 
The Wool 2030 project came out of a recommendation from the 2018 AWI Review of Performance. It has been long standing WPA policy to develop such a plan as it has been for many of our state farmer organisation members. The project has been run by AWI, with Scott Williams and Russell Pattinson conducting the project. With the 2030 Strategy being released it is now crucial that the implementation of this strategy is done correctly to ensure that these targets are met.
 
The WoolPoll Review recommendations were largely disappointing with a number of missed opportunities in the recently released final report of the WoolPoll Review.
 
The WoolPoll Review was undertaken by the DAWE, with ten recommendations made in the WoolPoll Review final report, covering a range of issues from consultation, WoolPoll Panel composition, levy split and frequency of the poll.
 
While WoolProducers welcome the recommendation regarding the pre-determined levy rates, as that should remove some of the politicking on the issue, it is unclear on what basis AWI can propose an alternate levy rate and who would ultimately approve or reject this.”
 
A major part of WoolProducers’ submission into this process was reducing the frequency of WoolPoll from three to five years, however this was contingent on alignment of strategic planning cycles with Meat and Livestock Australia (MLA). We are extremely disappointed that there was not a binding recommendation on the alignment of strategic planning periods between AWI and MLA and that a question will be posed through next year’s WoolPoll process to levy payers, which is an unfortunate waste of time
 
The recommendations from the WoolPoll Review final report are non-binding, with the report stating that the implementation will be agreed to by DAWE, AWI and the Wool Industry Consultative Panel (WICP).
 
Two other recent events are worth mentioning. I had the pleasure of presenting on behalf of Australian woolgrowers at the Schneider Group’s three-day online conference Wool Connect. I strongly advocated for Australian woolgrowers’ strong record in sheep health and welfare and our sustainable production systems more broadly. Animal welfare, traceability and sustainability were key themes of the three days.
 
Also, as President of WoolProducers Australia, I convened and chaired a meeting involving AWI, the federal Department of Agriculture, Water and the Environment (DAWE), wool brokers and private treaty merchants to resolve matters round the changes to the collection and payment of wool levies to AWI. These arrangements are now moving to a digital levy payer database and now appear to be back on track to come into play smoothly on the 1st January, 2021. This demonstrated WPA’s leadership in the wool industry and whilst disappointing such a meeting had to be chaired, we were proud to do it in a constructive way and get the process back on track.
 
Due to diligent management, a reduction in travel expenses and some support via the governments ‘cash flow measures’ WPA has returned a small profit in the financial year to June 30, 2020. This is very welcome. We are a not-for-profit company but need to make a small one from time to time to ensure we are viable in the long run, whilst all the time remaining cognisant of the support from our members.
 
There have been some staff changes in 2020. I have already acknowledged the enormous contribution from Jo Hall our CEO, but we also said goodbye to Ashley Cooper during the year. Ashley left to take up a key position in the federal government and we wish him all the best in his future career. Ash played a critical role in our work over the past two years leading to several initiatives and rigorously ensuring all our work programmes with organisations such as AHA met their targets and progressed as they should.
 
But whilst we lost Ash, we gained Adam Dawes. Adam comes to us with vast experience having run the Department of Agriculture in the Falkland Islands for 3 years, having strong wool production and on-farm knowledge and experience in DAWE across a range of areas over several years. Adam has already hit the ground running and we look forward to his strong contribution to WoolProducers Australia in 2021.
 
We are looking forward to 2021 and hoping that the good seasons continue for those experiencing it and that it may start for those who are waiting for it.
 
On behalf of the directors and staff of WPA, we wish you and your family a very safe and Merry Christmas and prosperous New Year.
 
 
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