Background

Australian Wool Innovation Limited, in partnership with the Tasmanian Institute of Agricultural Research, has funded the 8x5 Wool Profit Program until December 2005, with a promise of more funding if successful.

What is the 8x5 Wool Profit Program?

The 8x5 Wool Profit Program is an integrated Research, Development & Extension program to assist Tasmanian woolgrowers to achieve an 8% return on net assets through access to benchmarking, best practice information, group improvement initiatives and a state-wide wool profit awards program.

"The Tasmanian Wool Industry Strategy has a set goal of an 8% return on assets managed."

The 8x5 Wool Profit Program is overseen by a Program Management Committee, dominated by woolgrowers. When the 8x5 was set up, AWI wanted representation from local farmers to provide direction to the program and be involved int's strategic direction. The program management committee plays a critical role in

• providing advice on the strategic direction of the program
• monitoring program outcomes
• providing guidance to ensure that producer focused outcomes are achieved

Why was the 8x5 Wool Profit Program developed?

Wool producers who adopt simple, well proven results from grower funded research can dramatically increase the profitability of their wool growing enterprises.

Over the past few years, research has shown that many Australian woolgrowers have averaged less than 3% return on assets managed. Yet some wool growing businesses have achieved returns far higher than this and are highly profitable and successful.

Recent ABARE studies have shown that the Australian wool industry has performed poorly relative to other agriculture industries in terms of productivity gains. This means for the average wool growing business, that not only has the business achieved a low level of profitability but also it is unlikely that much progress will take place to improve this situation.

Part of the cause of low profitability of woolgrowing enterprises has been the poor adoption of new research and information. This has been attributed to a number of reasons. A lack of recognition of the key drivers of profitability by research. Often this occurred because existing research and extension programs have not had a big-picture focus on these drivers.

Australian Wool Innovation Limited, in partnership with the Tasmanian Institute of Agricultural Research, has funded the 8x5 Wool Profit Program to overcome these critical issues and assist the Tasmanian wool industry to achieve improved sustainable profitability.

What the 8x5 Wool Profit Program is aiming to achieve?

In 2001, stakeholders of the Tasmanian wool industry, including producers, brokers, DPIWE, University of Tasmania, private service providers and TQW, developed a vision for the future of wool in the state.

By June 30, 2006 Tasmanian wool growers will achieve an 8% return on their assets managed.
The industry’s success will be measured by:

• 100,000 bale clip annually
• Annual productivity increases of >5% from the use of an integrated set of tools and processes including enterprise planning, genetic gain, benchmarking, in-shed testing, price risk management, QA improvements in staple and micron, robust production systems, shearing, tracking and Internet technologies.
• Superior supply chain processes that build an internationally recognised and preferred Tasmanian wool-clip
• An effective process for technology transfer and industry change management

How will this change be achieved?

The core strategies of the 8x5 Wool Profit Program are: -

• Programs focused on the Key Profit Drivers of a wool growing business.
• Grower groups utilising action planning methodologies to identify management priorities for their farm and for the group
• Researchers and science coming to the farm to see the problems, that farmers face. Foster face- to-face communication between farmers and researchers so both parties understand the challenges.
• New communication technologies to keep farmers up to date with new science and technologies in a time effective manner
• Continually bring the best people and science to Tasmanian so woolgrowers
• Provide benchmark information that will assist growers to identify areas of their business that they need to improve performance
• Use awards to identify adoption of best practice and enhance image of industry