Wool, lamb markets to remain strong in 2019

Wool, lamb markets to remain strong in 2019


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PROFITABLE: It's been a positive year for wool, and strong markets should continue due to an expected reduced supply of good quality wools.

PROFITABLE: It's been a positive year for wool, and strong markets should continue due to an expected reduced supply of good quality wools.

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Market correction, but still strong.

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THE sheep industry was the shining light of Australian agriculture in 2018, with the wool market reaching record levels for all types, and lamb producers smashing saleyard records.

Woolgrowers achieved good returns despite a tough season across most of the state, with the market reaching an all-time high of  2116c/kg in mid-August, but has since had a correction to more stable levels.

In the final week of auctions for 2018, demand was strong for all Merino wools, and crossbreds had improved following a bumpy few weeks, which included a 130 cent a kilogram drop in the previous week.

The Australian Wool Exchange Eastern Market Indicator (AWEX-EMI) closed for the year at 1862c/kg, up by 13c/kg from the previous week. In US terms, the EMI finished the year at US1345c/kg. 

This week’s Melbourne and Fremantle auctions had a strong opening, the the market rising between 20c/kg and 40c/kg for all types, with 18.5-micron and broader wools most affected due to limited supply.

New England Wool managing director Andrew Blanch said the New Year demand was currency driven, with the most demand for 17.5-micron to 20-micron wools.

“We’ve for a lot of lower yielding and tender wools coming through, and the wools are a bit finer than last year,” Mr Blanch said.

“The superfine types have come back a little bit because there’s a more around due to the drought.”

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Mr Blanch said sound, stylish wools from traditional growing areas such as the New England had held up well, and the market should remain high for good quality wools.

“We’re going to come into a period where wool is drought affected but anything good will be well sought after. 

“The next 12 months is going to be a time where prices remain relatively high, but will be a bit more volatile due to the world economic situation and supply and demand is unknown at the moment.”

Mr Blanch said woolgrowers should look to maintain, or even improve flock quality through genetics, this ram selling season.

“Try to maintain genetics, because when season improves you’ve got a good basis to build your flock on.” 

The lamb market also had a strong year, with heavy crossbred lambs smashing saleyards records through June, July, and August, to reach a high of  $301.20 for an extra heavy pen of lambs at Wagga Wagga at the start of August. 

In the year to November 2018, the NSW trade lamb indicator averaged 682c/kg, up by 56c/kg, or nine per cent, on the previous year, and the national trade lamb indicator finished at 670c/kg on December 21.

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