BROKEN Hill-based Elders wool broker Lachlan Sutton doesn’t just consign clips to auction – he implements a full sales management service to help his clients set profitable market targets.
His ability to do this with a wide suite of wool spot and forward contract pricing, farm management and benchmarking tools was last night recognised before a crowd of his peers in Melbourne.
The 26-year-old wool sales manager for Elders’ southern zone was announced as the 2016 NCWSBA Wool Broker of the Year at the annual Australia Wool Industries Secretariat’s Wool Industry Dinner.
The other finalists in the award were Launceston-based Roberts Wool operations manager Robert Calvert and Australian Wool Network sheep and wool specialist and sheep classer at Hamilton Dale Bruns.
President of the National Council of Wool Selling Brokers of Australia Simon Hogan said the standard of the finalists was very high, but in a close-run race the judges believed that Lachlan best met the assessment criteria, particularly in the innovative approaches he has taken to marketing wool at a local, state and national level.
“He impressed the panel with his ability to introduce new tools and techniques to assist his clients to get the best possible financial return.”
More growers are setting marketing strategies
With the responsibility to effectively market more than 10,000 bales of wool a year, Lachlan has a broad role in Elders; including servicing his closest wool growers in New South Wales and north-east South Australia, but also doing price risk management for the northern zones of NSW and Queensland.
The techniques and tools he has utilised include helping growers calculate their cost production to understand what their profitable price points were, then setting appropriate forward or spot market targets.
“If I can work with growers on a one-on-one basis through the year and not just at wool sale time then hopefully the growers will be better off.
“It is easy at the moment for the medium and broad wool growers, but for the superfine clients I look after in the southern tablelands (of NSW) it’s a bit more of a challenge.”
Lachlan said the conversations he was now having with his growers on wool forward contracts and derivatives marketing now centred on strategy rather than functionality.
“You find synergy working one-on-one and I’m working with them every couple of weeks, talking about targets, what the markets are doing and it forms a really good relationship.
“When you’ve got that sort of relationship with your client you get some really good mutual benefit.”
Forward marketing increasing among clients
Forward marketing of wool was becoming more mainstream, especially among Lachlan’s western NSW and north east South Australian pastoral clients.
“We are sitting down and looking at 21s (micron) over 1300 cents clean and they’re saying ‘It’s going well, we’ve never seen this before and never been able to lock it in’ … that 1300 clean it’s absolutely magnificent so we’ve got to make the most of it.
“It can sometimes be a throw-away comment that ‘If I could sell my wool for over 900 cents greasy, I would sell it every day of the week’ and that’s where we are at,” he said.
“It’s good to be able to do that and to look forward and set targets that are good – forward market prices are up, liquidity is up and growers are becoming more interested.”
Lachlan said there was a genuine sense of optimism and positivity among medium and broad wool growers.
“I cannot tell you the last time I heard a negative comment about sheep and wool around Broken Hill or in the north east pastoral area of South Australia.
“I understand some of the superfine guys have a few more challenges, but the idea is that we can work with them and improve going forward.”
Wool prices have doubled since he first started with Elders eight years ago and despite wild dog issues in pastoral areas, growers were now saying returns justified fixing the problem. Growers were looking to expand their businesses.
“It is certainly a good positive time.”
Benchmarking could lead to profitable changes
Lachlan said he had helped growers to benchmark their production, costs and returns against the averages for local areas, “to compare where they are at”. This involved analysis of wool test data, looking at quality issues such as staple length, tensile strength or mid-break point and vegetable matter content, and sheep classing and fertility work. It could lead to management changes, including changing shearing times, to maximise returns.
“Lifetime Ewe Management (to boost reproduction) is probably the next cab off the rank just to try to get it to the next level.”
Lachlan grew up on a wool-growing property north-west of Balranald and his grandfather was a stud Merino breeder in Victoria, giving him a practical generational background to a kitbag of skills that is still growing.
“Every time you talk to a new group of clients you discover a new set of needs.”
Elders southern wool sale manager Lachie Brown said Lachlan had comprehensive market knowledge from sheep classing through to wool marketing and was able to use a wide range of marketing tools for clients, including risk management, minimum price and forward contracts.
“He is right across the scope of it.”
Lachlan said he was humbled to be awarded. He thanked his boss, Elders southern wool manager Lachie Brown, his initial employer Elders wool selling centres manager Simon Hogan, Elders co-workers and other brokers who had shared information with him. He said the award, sponsored by the NCWSBA, the AWTA and Fairfax, had been a good way to promote ambassadors in the industry.