Crossbred wool growers consigning their clip to PGG Wrightson Wool via the company’s popular Flexi contracts are benefiting financially by as much as $2 per kilogram against spot prices.

Under a Flexi contract a grower agrees to supply a minimum of 50 bales per annum over three seasons, or 150 bales. Contract prices are based on the three-year moving average of the nominated wool type’s monthly auction price. Compounding premiums, over and above the three-year moving average, are built into the Flexi contracts, meaning that as well as guaranteeing a smoother income, the contract also provides an increased average return for growers.

Flexis are also popular with export customers: while growers avoid the market lows, manufacturers avoid the peaks. Under this system, manufacturers link back to the wool grower, providing the entire supply chain with price stability in a volatile market.

An added incentive is the option of delaying payment by a further four months, which provides an extra price premium of 20 cents per kilogram.