2015, Volume 23, Paper 5
ISSN: 1883-5675

Is the Australian wool industry efficient at converting wool into value?

Euan Fleming
David Cottle

The marketing strategies of agricultural producers have become increasingly focused on the sale of differentiated products to intermediary buyers rather than the sale of homogeneous commodities directly to retailers. We measure the overall efficiency with which wool is converted into value across different processing routes and end products in the Australian wool value chain and decompose it into its technical, scale and mix efficiency components. Results show that considerable scope exists to increase the value of most sale lots, and indicate that the overall efficiency in extracting value is lower for wool supplied to processes that produce high-value wool garments.

Download full document here