Why have you not shown the sample proceeds in the cost analysis? Previously this was rebated back to the grower and now just goes back into the brokers revenue! The sale of growers samples is now the largest 'clip' sold at auction - buyer Melbourne
The sample 'rebate' is not really a cost! Yet it is agreed that it is 'lost' growers income.
For eample, in our example fleece lot the sample was 6kg, 'valued' at 1200 c/kg. Therefore the 'value' of the sample is $72. Now the broker has never really paid the grower this full value as there would be costs associated with preparing these samples for sale as a bale/lot. However it was not that long ago that brokers routinely paid the grower 75-80% of the sample value back to the grower. In this case approx. $57; or $19.20 per bale or 14.50 greasy c/kg.
It is interesting that the sample rebate is greater than that allowed by the example buyer cover all the buying costs, finance costs, risk etc. It is little wonder this has been raised.
So the broker earns far more than the wool buyer without risk? Eventhough the buyer markets the clip, takes the risk, finances the wool etc? - same buyer.
The broker needs to maintain a warehouse, testing equipment, field staff etc. Of course statistics can 'lie'. The sample lot was not meant to be representative