Schute Bell joins forces with Platinum Agribusiness
In this difficult wool marketing environment Schute Bell has taken the positive step of forming a partnership arrangement with Platinum Agribusiness. This will allow clients to have access to a range of innovative wool marketing and risk management services.
Platinum Agribusiness is an independent company owned and managed by Bill Mitchell who has been working in this field for over 13 years. His company has recently released its Minimum Price Scheme - a very simple and effective system for giving growers low cost wool price protection but without giving away the upside. Platinum also offers forward contracts and a unique system of clip analysis and revaluation.
With wool prices continuing to decline for most types there are a number of strategies being variously adopted by growers, including:
1. Commit some wool to the Minimum Price Scheme.
The Minimum Price Scheme provides a minimum level for each AWEX Micron Price quotation between 18 and 23 inclusive. The minimum price is around 10% lower than the current market price and cost of participation is approximately 2.5% of the current market price. If the price at the time of sale is less than the minimum the difference will be made up. If it is higher then the grower receives full auction sale value less the 2.5% cost.
2. Fix a price
Even though prices have been declining it is still possible to take forward contracts in some micron categories at higher levels than current auction values. Platinum Agribusiness offers a Wool Indicator Contract that makes this a very simple process and allows growers to reduce price risk by taking a contract on a portion of the clip. Once a price is established it is locked in and the wool will be sold at auction after delivery to determine quality adjustments.
Despite the recent market falls prices are still well above the lows seen during the 1990s, particularly for the 21 micron and coarser wools. We do not believe that forward selling is about predicting the direction of future prices – it is more about reducing risk and securing known income levels. The partnership between Schute Bell and Platinum ensures that we can offer growers the best products available in the wool industry today.
For further information on Platinum Agribusiness and its services contact your wool representative or Jason Thomson at our Rocklea office on (07) 3275 127.