Please use this identifier to cite or link to this item:
Full metadata record
DC FieldValueLanguage
dc.contributor.authorFleming, Euanen
dc.contributor.authorCottle, Daviden
dc.identifier.citationAustralasian Agribusiness Review, v.23, p. 56-82en
dc.description.abstractThe marketing strategies of agricultural producers have become increasingly focussed on the sale of differentiated products to intermediary buyers rather than the sale of homogeneous commodities directly to retailers. The wool value chain in Australia fits the description of differentiated products being sold by wool producers to agribusiness firms that are intermediaries in the chain. The attributes of wool that are the source of this differentiation are used by firms to add value to their operations, reflected in higher retail prices paid for wool products. 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. We find that wool price changes significantly with a change in fibre diameter, staple length and staple strength and employ a flexible functional form to capture the relations between these wool attributes and lot value. 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. We then ascertain that various factors related to wool production and product characteristics significantly influence the level of technical efficiency. The mix of the three key attributes in wool lots was found not to be a major factor influencing overall efficiency whereas scale efficiency scores (which we measure as returns to wool attributes) were clearly much lower than those for technical and mix efficiency scores, a function of strongly increasing returns to wool lots as the levels of attributes increase. We test propositions about the skewness of distributions of efficiency scores in translating wool attributes into value. Most distributions of overall efficiency scores are positively skewed for production processes paying high prices for wool, and differences in overall efficiency were observed across selling centres. 'Prima facie', the results provide a strong case for wool producers to move to higher value levels of wool attributes by producing finer, stronger and longer wool fibres - especially the former. But such a strategy may not be an optimal one for producers to follow because the investments they make to implement such a strategy may entail high costs and take a long period to fruition that would lead to a heavy discounting of future benefits. A full benefit-cost analysis would be needed of any investments to raise the levels of wool attributes and otherwise improve wool quality at the farm level.en
dc.publisherUniversity of Melbourneen
dc.relation.ispartofAustralasian Agribusiness Reviewen
dc.titleIs the Australian wool industry efficient at converting wool into value?en
dc.typeJournal Articleen
dc.subject.keywordsAgricultural Economicsen
local.subject.for2008140201 Agricultural Economicsen
local.subject.seo2008830311 Sheep - Woolen
local.profile.schoolUNE Business Schoolen
local.profile.schoolSchool of Environmental and Rural Scienceen
local.record.institutionUniversity of New Englanden
local.identifier.runningnumberPaper 5en
local.title.maintitleIs the Australian wool industry efficient at converting wool into value?en
local.output.categorydescriptionC1 Refereed Article in a Scholarly Journalen
local.relation.url, Euanen, Daviden
local.subject.for2020380101 Agricultural economicsen
local.subject.seo2020100413 Sheep for woolen
Appears in Collections:Journal Article
School of Environmental and Rural Science
Files in This Item:
2 files
File Description SizeFormat 
Show simple item record

Page view(s)

checked on Mar 7, 2023
Google Media

Google ScholarTM


Items in Research UNE are protected by copyright, with all rights reserved, unless otherwise indicated.