WHILE wool production is forecast to escalate 2.2 per cent to 332 million kilograms greasy wool in 2016-17, the Australian sheep flock is set to continue to decline.
The Australian Wool Production Forecasting Committee (AWPFC) credited the growth in a 2.7pc increase in average wool cut per head, following favourable season conditions and pasture on offer.
The final estimate of shorn wool production for 2015-16 was 325 mkg, which falls 6.2pc below the prior year.
"Almost all major sheep producing areas across Australia are reported to be experiencing very good to excellent season conditions and an abundance of feed after a very wet Spring,” AWPFC chairman Russell Pattinson said.
"Some regions, notably in Victoria, in the Tablelands of New South Wales and in Tasmania, have experienced a rather tough winter after seeing very dry conditions up until May, so fleece weights are only now starting to improve.
“The full benefit of the improved seasons is expected to be seen during autumn shearing.”
Wool production is forecast to increase in most states this season, led by a 3.7pc increase in Western Australia and South Australia to 67.6mkg and 56.8mkg respectively.
Shorn wool production in South Australia has increased every year since the low point of 47mkg in 2009-10.
After the large drop in shorn wool production in Queensland in the past decade, where production had fallen from 20.6mkg in 2006-07 to 6.9 mkg in 2015-16, production is forecast to increase by 15pc in 2016-17.
This is reportedly boosted by sheep coming back into the state from being agisted in New South Wales. Despite this, Queensland will remain the smallest state with just 8mkg production.
Shorn wool production in New South Wales, the largest producing state, is predicted to increase by 1.3pc to 124.5mkg.
While wool production in Victoria is expected to be flat next year, this is a recovery from the 6.8pc decline in the weight of wool tested in the first five months of the season.
Tasmania is the only state where wool production is predicted to decline, though by a small 0.9% to 9mkg.
Following three consecutive years of decline in Queensland, Elders Queensland district wool manager Brett Smith said the forecast growth spike reflected sheep returning to the state after the breaking of the drought.
While numbers in Queensland were historically low, Mr Smith said optimism was rife for those that remain.
“People with sheep are getting bigger,” he said.
“The main drivers are people restocking following the drought, expansion and increasing production.
“In Dirranbandi there were good lambings for the past two years and a lot of people in central Queensland that destocked during the drought are restocking again.”
He said woolgrowers intentions indicated the strongest plans to expand for several years.
“People are retaining wethers, there is a big focus on ewes’ lambing rates and everyone is focused on reducing lamb losses from wild dogs so fencing has been a big part of their plans,” he said.
He said sheep had returned to the Queensland production spotlight due to good prices and seasonal conditions.
“This production growth would have happened earlier when wool prices started to take-off in 2011, but that’s when the season fell out and wild dog problems became extreme.”
Mr Smith said the state was gearing up for exponential growth in the coming years.
“Queensland is the only state with the capacity to quadruple sheep numbers,” he said.
“It has the potential to grow, partly due to the low flock base, and while it won’t ever get back to the 24 million head there is opportunity to at least quadruple current numbers.”
Mr Smith said Merinos had been an attractive restocking option for producers seeking a quick cashflow following the drought break earlier this year.
“People have seen it as a quicker cashflow than cattle, particularly if you’re restocking a blank canvas, you can have a wool cheque and lamb within 12 months,” he said.
Data from the Australian Wool Testing Authority showed a significant decline in the weight of wool tested between 16.6 to 18.5 micron and wool broader than 26.5 micron.
Fox and Lillie brokerage manager Eamon Timms said woolgrowers continued move away from superfine Merino sheep due to poor premiums was hurting market supply.
“It is a reflection of woolgrowers breeding decisions which have been made because of the pricing structure that was applicable,” Mr Timms said.
“It would take a sustained period of good premiums to induce former traditional woolgrowers to go back to the production of superfine types at this point in the cycle with fine to medium and broad merino pricing so strong, the incentive is not there for a significant swing back.
“Those conditions won’t be reversed quickly.”
There was an increase in the volumes of wool for all micron ranges between 18.6 micron and 23.5 micron.
The mean fibre diameter for Australia in 2016-17 to November was 20.7 microns.