Merino wool prices are going gangbusters, so why are producers struggling with low crossbred wool prices?
The answer lies in the old saying that “wool ain’t wool” or more specifically in this case “crossbred wool ain’t Merino wool”, according to Mercado analyst Andrew Woods.
Mr Woods noted the 28-micron price had weakened by a couple of dollars since 2015, but was holding well above the levels traded at prior to 2011.
“This is a big move for Australian crossbred prices,” Mr Woods said.
The crossbred wool market experienced a purple patch during the 2015 season when 30-micron wool averaged 897 cents a kilogram (clean): but there has been a steady decline in returns since then.
Moses and Son director Marty Moses, Temora, said the crossbred wool market had come under a lot of pressure.
“We had a fantastic run, it was extraordinary and continued through to late 2016,” he said.
“The market started to wobble for 28- to 32-micron wool and there has been a gradual decline since then.”
Mr Moses said a lack of global demand was behind the retreat in prices, along with an oversupply of wool in the stronger micron range.
“It appears there is not a lot of demand from the furnishings market,” he said.
“It is disappointing but interest in the stronger micron wool is mediocre.”
Market intelligence was predicting the likelihood of little to no change for the short- to medium-term, according to Mr Moses.
The 10-year average for 30-micron wool is 574c/kg and while the current market is 560c/kg, Mr Moses said his information suggested there was little chance of a premium in the foreseeable future.
“It is really hurting the coarser crossbred oddments which has gone from huge money to under one dollar in some cases,” he said.
“It is tough and with this market some people are holding onto their wool hoping it will lift.”
Elders Goulburn wool manager Craig Pearsall recognised the market was down a “fair bit” on previous years, but was holding steady at current levels.
“It is tracking sideways,” Mr Pearsall said.
Market intelligence is predicting the likelihood of little to no change for the short- to medium-term
Stronger lamb focus at Cootamundra
Crossbred wool has taken a tumble from its recent peak and for many producers that would be a normal state of affairs. its production being an adjunct to their lamb enterprise.
With 4200 first-cross ewes joined to Poll Dorsets, Robert Scott, “Hillview”, Cootamundra said his focus was on prime lamb production rather than wool, but he recognised the value in receiving good prices for his crossbred fleece lines.
“”The past couple of years have been really impressive,” Mr Scott said.
“Wool is not really something we concentrate on because our focus is our lambs, but we are happy to get a good price for out wool.”
With an October shearing, Mr Scott sold his wool in November, so he hadn’t yet sold wool at current values, with the top of last season’s wool selling to 1100 cents a kilogram (clean).
“It was a very good price with our ewes cutting from four to five kilograms of wool averaging 24 to 26 micron,” he said.
“But it is a by-product although we do try to produce a good clean fleece.”
Despite the current market correction, Mr Scott said present prices were a long way better than they had been.
“Even with the prices lower now than they have been for the past couple of years, they are still an improvement on what we were getting,” he said.
“At the moment the better price for wool is helpful especially when added to the price we are getting for our lambs and I have tried a six month shearing to get a premium price for the 60mm fleece lines.”