Fine line for superfine profitability

Last week 17.5-micron wool fell 33 cents a kilogram to 1407c/kg, 17-micron wool fell 23c/kg to $1419c/kg and 16-micron fell 13c/kg to 1460c/kg.

The wool market soared to a four year high in June but the falling Aussie dollar has since caused prices to tumble, taking superfine types with it.

"We could keep the farm going without needing to do off-farm work but our business would look quite different - without doubt we would move over to meat sheep and cattle ," said Kentucky woolgrower Katrina Hawksford.

At current prices, some of the country's best growers have abandoned the auction system and turned to contracts paying up to 35 per cent above the market, but, even then, the only thing keeping their heads above water is a supplementary wage.

It takes three off-farm earners to keep the Hawksford family's "Glen-burnie" operation going.

The partnership comprises Andrew and Katrina Hawksford and Reg and Lana Hawksford.

They run 4200 head of Merinos which produce 8000 kilograms of superfine wool a year.

"While we have off-farm income we can sustain our business but that can't go on forever. We're not getting any younger," she said.

The Hawksfords supply to Italian wool mill Vitale Baberis Canonico (VBC) and recently entered into a three year contract with the company which will pay 30pc above market price.

But, it's not enough.

While in Italy, sponsored by the VBC, the Hawksfords demanded a better price for their product but Mrs Hawksford said it went down "like a lead balloon".

"We told them in no uncertain terms that we can't continue unless we get 2000c/kg for our product," she said.

"If, at the end of the three-year contract we have to return to the auction system all we will have done is stave off the inevitable."

Tasmanian growers Simon and Ann-Louise Cameron, "Kingston", Campbell Town, earn a wage in Sydney to keep their superfine wool enterprise in check.

They run 5000 Merinos across 3000ha and sell to VBC under a contract.

"To maintain that farm I need an off-farm income and there are many other farms in exactly the same situation," Mr Cameron said.

"We would love any excuse to stay growing superfine and avoid having to broaden our business to prime lambs and cropping.

"It's frustrating because we need a premium and we're just not getting it."

Fellow Tasmanians and VBC suppliers Jack Cotton and daughter Anna, "Kelvedon", Swansea, who run 8500 superfine Merinos, have diversified into viticulture.

In 1998 they planted one hectare of Pinot and Chardonnay grapes and they've since expanded their plantings to 9ha.

"It was a good move for us," Ms Cotton said.

Australian Wool Network sheep and wool specialist Brett Cooper, Mudgee, said it was "common practice" for superfine growers in his area to earn a second income.

"It's not a recent phenomenon - it's been going on for a number of years due to low returns and the number of small holdings around this way."

New England Wool manager Andrew Blanch said the industry's instability had been perpetuated by Chinese buyers in recent weeks.

"It's particularly wobbly at the moment because of China whose trading has been stopping and starting," Mr Blanch said.

The immediate market outlook would remain unchanged.

New game plan at Ilford

A SMALLER market is far from super for producers of quality wool.

Increasing consolidation among superfine wool buyers threatens to end the Croake family tradition's century-long heritage at Ilford.

Following in the footsteps of his grandfather, father and uncles, Dick Croake, "Eldon Court", Ilford, has grown superfine Merinos since he was 18.

But a decade of consistently low returns has forced him to scale back his operation and seek off-farm work.

"I've always been a shearer on the side but in recent years the superfines just haven't turned a profit so I've taken up a job managing a nearby property for a family who live in Sydney," Mr Croake said.

At home, his superfine flock is just two-thirds of the size it was a decade ago, and he's diversified into prime lambs and cattle.

"In the past couple of years we've introduced broader wool rams to cut more wool from bigger framed sheep. That's the direction we will continue to go in unless things turns around dramatically," he said.

Mr Croake (pictured lamb-marking at "Waterview", Ilford,) lamented the decline of the industry and its impact on the Ilford/Pyramul area.

"This area used to be completely wool but now there's only a few die-hards left," he said.

- JESSIE DAVIES