industry news
Q &A Stuart McCullough CEO AWI with Victor Chesky
All wool producing countries and all manufacturing chains within the wool industry have been affected by the COVID-19 pandemic. The closure of retail outlets, and the cancellations of trade shows and exhibitions, have disrupted market plans for all. I asked Stuart McCullough, the CEO of AWI, the peak body that represents most wool growers in Australia, how current issues have affected marketing and R&D. The fact that so many negative occurrences all came in rapid succession and within a short space of time has been unprecedented. It has forced us to re-evaluate how we spend wool grower funds and what we must do to stay ahead of the curve. Firstly, AWI revenue is largely dependent on the wool levy income, which is determined by wool production volumes and prices. This levy was reduced from 2% to 1.5% in 2018 and that has affected our discretionary spending. Of course, this was a wool grower decision, and we respect it. Secondly, Australia has also been in the grip of an ongoing severe drought and although this is not an unexpected occurrence in Australia, it usually only affects 18 | wool2yarnglobal 2020
one or two wool growing regions at one time. This time the drought has affected most wool growing regions and therefore wool production as well. Thirdly, wool prices that were at a high of $21 per kg also came down in late 2019 and this also affected our income. And in addition to these issues the COVID-19 pandemic has effectively put a stop to consumer spending in all our main markets. Traditionally AWI funding was split with a ratio of 60% directed to marketing and 40% for onfarm R&D. Currently that ratio has shifted to 30% marketing and 70% on-farm R&D. AWI must be particularly smart about when, where, and indeed whether it is prudent to actually invest woolgrower funds - and
this is especially the case with our marketing activities at the moment. For example, before COVID-19 we were running 400 projects, now we are running 200 projects. Marketing projects can be turned on and off quickly enough, but the toll on human resources can be much more damaging. Our on-farm R&D is continuing as normal. Some of the main projects to mention are in animal welfare, in particular large investment has been made into mulesing solutions. We also continue to invest in programs around wool handling and shearer training. This is particularly important this season as New Zealand shearers who traditionally supplement shearing capacity here in Australia has not
