WHILE the COVID-19 pandemic paints a picture as the elephant in the room and nobody knows just how fast the market recovery will be, analysts are aiming to decipher outcomes for the sheep and wool industry.
Wagga is one of the major selling centres for sheep and lambs in terms of throughput and buyers and vendors keep a close eye on any trends at the Livestock Marketing Centre each week.
Meanwhile, wool is also a staple for this region and it's no secret that the impact on China's buying capacity has affected prices per kilogram.
However, if the analysis from Mercado is to be a guide the outlook for sheep and wool remains positive.
Robert Hermann of Mercado said there were points to consider in terms of sheep and wool:
- Red meat protein is in short supply
- Prices remain historically high
- Restocking will continue
He said compared to this time last year, vast areas of the country had improved in terms of the season.
There were also opportunities for flock rebuilding with people either restocking and supporting markets. Or producers may opt to keep more sheep on rather than selling.
"Restocking will continue because returns are good for sheep and lamb and the season is far better than what we have seen," Mr Hermann said.
While wool has taken a hit due to coronavirus there were lessons to be learned from history.
Mr Hermann said initially China actually started buying a lot of Australian wool when the market was on its knees.
"We took a long time to convince them they should be paying more," he said.
Market data also showed that the wool price volatility had come at a time when returns for sheep meat were buoyant.
More new-season lambs have been entering southern markets including, Wagga, Corowa and Griffith and producers have been commended for the high quality on offer.
"We think new-season lamb supply is likely to be slightly higher than last year," Mr Hermann said.
This prediction was based on the higher scanning rates seen across NSW combined with better winter conditions.
"The other factor we are noticing is that the lambs are more advanced," he said.
The ewes have had a lot of feed," he said.
"If the season doesn't cut out and continues along we will see big licks of lambs coming into the markets at Wagga and Dubbo," he said.
Meanwhile, the better season might prompt some producers to hold lambs over and aim for higher weights.
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