IMMEDIATE

First wool trade in cyberspace

(680 words)

The world’s first internet-based trading system for a major farm product is now trading commercially.

WoolPro managing director Lance Wiggins said Woolnet went live today, after four months in practice mode and 10 months intensive software development by Wool Production Technology Limited (WoolPro) and its contractor Advantage Group Limited.

"The first trade of 61 bales of crossbred fleece was between Summit Wool Spinners of Oamaru and a South Otago farmer," he said.

"The trade, made last month on a pilot site with hands-on help from our staff, was the essential last step in the development of Woolnet Mark 1," Mr Wiggins said.

Summit Wool Spinners wool manager Alistair Flett said he bought the 61 bales from Peter and Joy Wilson of Slopedown, near Clinton. He said the two parties hadn’t had any dealings before the purchase and have yet to meet.

"It’s one of the beauties of Woolnet. I can buy wool from other parts of the country without having to put a rep on the road."

The Wilsons say their main motivation for selling on Woolnet was to form a business relationship with a buyer.

"Auction is not where we want to be. The sale to Summit was the first time in my 20 years plus of farming experience that the buyer came back to me with comments about my clip," Peter Wilson said.

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"I’ve got a great passion for sheep farming. I see no reason why wool growing should not be profitable if farmers take charge of their businesses.

"I’ve had excellent support from my wool broker, but I’d prefer to be dealing direct with the buyer. I’d prefer to pay the broker a fee for his expertise and advice."

Mr Wilson said he hadn’t been aware of the extent of broker charges until he did the Woolnet trade.

"At 10c/kg, plus an $8.50/bale load-out charge, it’s costing $28.50 to sell a 200 kg bale through auction. The equivalent Woolnet charge, where the wool is consigned direct to the scour for testing and sampling, is $8.73."

In addition, he believes his selling price to Summit was about 5c/kg better than he would have got at auction on the day.

Mr Flett said Summit was keen to support Woolnet during its early days.

"We are open-minded about it. We don’t want its potential to be squashed simply because of negative thinking in the wool trade," he said.

"Our long-term involvement will be based on a commercial decision as to what’s good for Summit. But all going well, it will nicely complement our direct buying operations."

Summit shares the Wilsons’ wish for direct communication between buyer and seller. The company does not buy at auction.

Quite apart from the fact that buying direct is more economic for the company, it also makes it easy for Mr Flett to communicate with the company’s farmer suppliers.

"We know precisely what happens to every purchase. Whether we had problems with thistle head contamination, whether it was too long, too short … we know what customer it went to, whether it went dyed or undyed," he said.

"We believe our farmers want to hear our comments. They want to know when to shear, how to prepare … what we as the customer need of them."

WoolPro’s Lance Wiggins said Woolnet was set up to create new business opportunities for farmers and indeed for the whole wool industry.

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"Already it is helping growers reduce selling costs and make efficiencies. It is also encouraging growers to take personal responsibility for the marketing of their clips.

"It’s early days yet, but in due course we believe Woolnet will open the doors to new markets and business opportunities. It is the way of the future."

[photo captions – JPG files available]

[Wilsons]

South Otago farmers Peter and Joy Wilson log on to Woolnet from their farm office.

[Summit]

Summit Wool Spinners wool manager Alistair Flett says Woolnet helps him communicate market messages directly to grower suppliers.

[ends]

Peter Wilson, Tel 03 415 7333