Record wool prices give New England studs a boost

Fine and superfine wool producers have enjoyed market highs for the past few months, with the Eastern Market Indicator reaching its peak of 1699 cents a kilogram last week – a rise of 23c/kg on the previous week.

In Sydney, 17-micron wool rose 18c/kg to 2477c/kg, 18-micron reached 2273c/kg, 19-micron wool made 2015c/kg, and 20-micron and 21-micron wools improved by 21c/kg and 20c/kg respectively, reaching 1794c/kg and 1669c/kg.

The improved returns have led to more confidence from stud and commercial producers, New England Wool managing director Andrew Blanch said.

The current market is a big change a few years ago, when there was little benefit to producing top quality wool. That led to a decrease in demand for fine, superfine and ultrafine rams, as well as a shift in preferred genetic traits.

"We went through a run with no premiums for finer wool, so it was hard to sell a superfine ram for a number of years," Mr Blanch said.

"A lot of commercial producers were looking for a larger wool cut and tending to go a bit broader with the micron."

While the record highs won't last forever, Mr Blanch said the underlying demand was good quality wool was still good.

"Instead of there being a big oversupply of wool, there's an undersupply.

"It's certainly a great year for our Italian shareholders and there's still competition from other areas.

"We've got renewed European interest and China has moved into the better styles and better strength wools, which has added a premium to the finer types.

"Now that the premium is starting to appear again, people are wanting to produce a better wool."

The number of superfine sheep isn't expected to increase dramatically, but Mr Blanch believed stud producers would still benefit from the improved market in the upcoming selling season.

"A few of the finer studs in southern areas have had some the best sales they've had in years," Mr Blanch said.

"I think this season is a great opportunity to buy quality rams.

"For a number of reasons, people haven't had the money to invest in their wool production, so it's a good opportunity to start to put more back into their operations.

"We had clients come back last season who had been away for a few years, but I think this season, we'll start to see people spending more money on their genetics. The New England area is all about quality and these prices are going to give people the incentive to buy a few more rams and buy better rams."