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Thursday, October 17, 2019

Where do the AWI votes come from?

By Andrew Woods  |  Source: AWEX, ICS

Key points

  • Merino wool has accounted for about 88-89% of gross wool sales in recent years (90% when superfine wool is added).
  • Crossbred wool accounts for about 10% of sales value.
  • The missing AWI votes from the 2017 election of directors are therefore mainly Merino grower votes.

2019-10-17 Wool 1

2019-10-17 Wool 2

2019-10-17 Wool 3

The article earlier this week looked at the pattern of voting in the 2017 AWI director election and showed that only 37% of potential votes were effectively cast. That left some 60% of votes (there will be a grey area in the numbers due to an uncertain proportion of invalid votes) missing in action. This article takes a quick look at the source of these potential votes.

As AWI votes are tied to the value of wool sales (in the previous three years) Figure 1 looks at the proportion of gross sales value accounted for by superfine, Merino and crossbred wool since the 2011-2012 season. During the three seasons in the middle of this decade, the Merino proportion of gross sales fell to around 85%. At the same time, crossbred wool lifted to around 13-14% of gross income, as crossbred prices lifted to unprecedented levels. With the lift in Merino prices since 2015, the proportion of gross wool sales accounted for by Merino wool has lifted to 88-89%. These two breeds account for 98-99% of the value of gross wool sales.

While on the subject we might as well check out the proportion of wool sales from other breeds that make up the remaining 1-1.5% of income. Figure 2 shows a breakup of the minor breeds. Apologies to superfine growers for including them in this comparison but the scale allows the proportions to show up. Downs and carpet wool account for 0.2% and less of income. The ‘runs with’ groups have been broken out as separate breeds when they are not in reality. These two groupings each account for 0.1% and less of gross wool sales.

In summary, the missing AWI votes are in the main Merino producers which have not bothered to register as shareholders of AWI and then taken the next step of voting for the board members.

Finally, Figure 3 shows the proportion of gross auction sales accounted for by Merino wool from the mid-1990s to this season (2020*). As the proportion of Merino wool fell, its proportion of sales fell also. In the past decade, the proportion of Merino wool volumes has stabilised around 80% of auction sales with the proportion of sales value varying from 85% to 89%.

 

What does this mean?

Crossbred wool sales contribute 10% of the wool levy income that AWI receives. A low voter turnout from crossbred producers is understandable as wool is not their primary focus.  The relatively low voter turnout for AWI director elections is mainly a function of Merino growers not being involved.

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