Shearing trend creating market stability

Shorter shearing intervals trend evens out market supply


Sheep
Prem wool entering the markets is not frowned upon like it used to be. Shorter shearing programs are proving beneficial to both the producer and the wool market. Photo by Rachael Webb.

Prem wool entering the markets is not frowned upon like it used to be. Shorter shearing programs are proving beneficial to both the producer and the wool market. Photo by Rachael Webb.

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Consistent supply of Merino wool gladdens wool industry.

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A shift away from a traditional annual shearing to a shorter six and eight month interval shearing is a trend starting to gain favour with wool growers across Australia. 

But with the spotlight on the current prospering wool market how is this affecting the supply and is there any real benefit to producers? 

Lionel Plunkett, Senior Market Analyst, Australian Wool Exchange (AWEX) said the flow into the wool market had become more consistent since the trend started to emerge. 

“Once upon a time there was a lot of wool that used to come in the spring period, but it is a lot more consistent now,” he said. 

He believes the reasons for this are shearing patterns and grower behaviour. 

“Six and eight month shearing practises are allowing that more consistent supply,” he said. 

“I think growers too are averaging out how they are feeding their wool onto the markets. This is a real positive because it gives buyers consistency all year.” 

Victorian wool broker, Alister Carr, KareeWool, Golden Square, said the only quiet period that he experienced was in late April and early May, when mixed farming enterprises were cropping. 

“We sell in the Melbourne auction every week and our quantities have been very consistent,” Mr Carr said.

“I think the biggest constricting factor is the availability of shearers. There is only so much shearing in most regions that can take place at any one time.

“It’s only the bigger sheds that can flex their muscles, the smaller guys have to fit in with when they are available.”

He said there was a big swing on commercial Merino self-replacing flocks in his region opting for six month shearing.

“The commercial argument for six month shearing is significantly stronger as you get higher meat and wool prices in the long run,” he said. 

“The main payback for shearing at shorter term intervals is your ewe health – higher fertility, higher lambing percentages and higher rate of twins.

“Generally most producers talk in the vicinity of an extra 10pc extra lambs on the ground and less ewe losses during lambing because they are in much better condition.” 

On the wool side, if you shear twice a year you will cut, in an average season, about half a kilo, per head, more wool off a sheep, he said.  

“So when you are getting $14 or more a kilo that covers your extra cost of shearing.”

Chris Clonan from Alfoxton Merinos, Armidale, who shears about 3600 sheep, switched to an eight month shearing program over two years ago, having just completed one full cycle.

“It seems to fit well with our enterprise,” Mr Clonan said.

“Our shearing months are now February, October and June.

“When we shore in February 2016 and shore in February this year, both times they have gone through the dry time when there was hardly any wool on them, so it’s been fantastic in that regard.

“The sheep are in really good condition and produced good body weights because they were off shears and prospered.

“And our lambing percentages are up – last year we were up to 150pc in mobs.” 

But what is exciting is he is making serious money.

“It’s really profitable,” Mr Clonan said. “They grow wool pretty quickly in the first six to eight months.”

He said by selling his wool into the market three times over the two years he is spreading the risk.

Alfoxton wool is now sold around March/April, January/February and early July.

“I aim for 70mm average clip each shearing, I don’t fall below this as I could potentially be affected by discounts,” he said.

“But short wool has been selling exceptionally well, and a lot better than it did years ago. Now it is sought after.” 

According to a review conducted by Mecardo in April, shearing at shorter time intervals is perceived to be increasing.

The review showed an overall proportion of prem fleece wool has been trending higher since 2010-2011, although varying between micron categories.

The big increase in proportion of prem fleece wool has been in the 21 micron and broader Merino categories.

The implication is that the relative prices for shorter combing length fleece wool will come under pressure from increased supply. 

Seasonal conditions hold back wool production 

As wool’s Eastern Market Indicator (EMI) is reaching heights never seen before, the most recent production forecast predicts less wool will be shorn both this season and next.

The Australian Wool Production Forecasting Committee (AWPFC) revised its forecast of shorn wool production for the 2017/18 season to 338 million kilograms greasy, a 0.6pc decline on the 2016/17 season and lower than its forecast in December 2017. 

Committee Chairman, Russell Pattinson, said fleece weights were lower due to recent dry seasonal conditions through summer and autumn in the major sheep producing areas across Australia.  

Wool production reductions are greatest in WA, QLD and NSW (-7.3pc) while Victoria showed the largest increase (+ 5.7pc) with slight increases in SA and Tasmania.

Mr Pattinson said while the committee expected that fleece weights would pull back as the season progressed, the decline was than anticipated.

“This is reflected in the drop in wool tests by AWTA in February and March,” Mr Pattinson said. 

"Furthermore, the high wool prices encouraged producers to shear their sheep earlier and the volume of prem shorn wool has increased. 

“This has contributed to the recent decline in wool test volumes as wool which normally would have been delivered in recent months was delivered earlier in the season.”

The AWPFC’s first forecast of shorn wool production for the coming 2018/19 season is for production to be 333 mkg greasy, a 1.7pc decline on the 2017/18 forecast.

This fall reflects the impact of the dry seasonal conditions and is the result of a small fall in both the number of sheep shorn and in average wool cuts per head.

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