Woolgrowers' efforts rewarded

Of the 988,680 bales offered at the Melbourne wool stores last season, 933,855 sold, recording a passed-in rate of 5.5 per cent, and a turnover of $1.7 billion – up $376 million on the previous financial year.

In what was a record season for the wool market, both nationally and locally, the southern market indicator closed the financial year on 2035 cents a kilogram – a number that has never before been seen at the close of the season.

Elders’ Mal Nicholls said southern woolgrowers were reaping the rewards, despite troubling seasons across most of the eastern seaboard.

“The people that stuck with wool through the tough times – and there’s been some very tough times for woolgrowers since the demise of the floor price – absolutely deserve to be rewarded with what’s happening at the moment,” Mr Nicholls said.

“It’s just unfortunate that such a large percentage of their incomes has had to be fed out to stock in forms of grain and hay.

“But there’s still financial opportunity for them to put extra fertiliser on, or fix the run-down fences, and get on with some of the jobs that they haven’t been able to for many years.”

Coleraine woolgrowers, Neil and Emily Langley, sold 94 bales at Melbourne recently, and recorded some of the best prices seen in their careers.

Mr Langley said the reward for effort was encouraging.

“I’ve been persevering in the industry for the last 30-odd years, and finally we’re actually seeing some rewards for our time and effort in creating such a fine, well-grown, productive product,” Mr Langley said.

He said the extra money in their pockets would allow them to do repairs and maintenance on the farm.

Harrow woolgrower Wayne McClure sold 80 bales of autumn-shorn wool in Melbourne recently, which he would have traditionally sold in March the following year but decided to sell early instead.

And Mr McClure was rewarded for his strategic planning, selling them for about $550 a bale more than the season prior.

“I think these prices are where [the market] should be, with rising production costs,” he said.

“For the Merino people like myself, I think this is good for the future and I can’t see the money going back substantially any time soon.”

Mr Nicholls said in his 50 years in the industry, this is the first time he has seen the supply and demand situation in reasonable balance.

“While supply is tight, the good part is, wool’s selling at the other end,” he said.

“Wool garments are going to a whole new clientele and they’re selling, people are realising the benefits of the natural fibre.”

He said while the positive wool market might have seen flock numbers increase, it’s only been marginal.

“I don’t think we’re going to see people jumping from one enterprise back to wool but people that are growing wool would have upped their numbers as best they could with the current season.”

Australian Wool Testing Authority’s (AWTA) Tim Steere said less weight was in woolgrowers’ bales, according to the company’s end of season analysis, suggesting an increase in more frequent shearing, both nationally and locally.

Nationally, wool being tested in the 100-109 millimetre bracket had fallen 20pc on the previous season, 110-119mm wool fell by 25pc, and 120mm+ wool fell by 31pc.

In southern Australia, the decrease wasn’t as significant, which Mr Steere said was possibly because of the higher proportion of crossbred wool in Victoria.

Wool in the 100-109mm bracket fell by 3.4pc, 110-119mm wool fell by 7.6pc, and 120mm+ wool fell by 10.2pc.

“To me, this is a very good indicator that wool producers are shearing more frequently, and not necessarily every six months, just less than every 12 months,” Mr Steere said.

In southern Australia, the average micron increased only 0.2 micron to 22.1 micron, and the greatest increase was in the 28+ micron section.

The national average micron was unchanged at 21 micron.

Mr Steere said there was a 7.5pc year-on-year increase in the total number of bales tested in southern Australia, which was up on the previous season’s increase of 3.5pc.

“There were more bales on offer, but I don’t think that necessarily meant there was more production,” he said.

“There were more bales on offer, but not necessarily because of increased production, but because of a flush out of any stored wool.

“There would have been plenty of woolgrowers who had wool stacked away in sheds, and now aren’t able to resist the high prices.”

Endeavour Wool Exports trading manager, Josh Lamb, said it had been an interesting year for exporters, mills, woolgrowers and brokers.

Mr Lamb said his main challenges had been funding weekly purchases and mitigating risk.

“Funding’s a little more complicated, the majority of companies are funded by banks, and you can’t just ring and have your facilities increased overnight, so that takes time,” Mr Lamb said.

“Some wool types are costing 60pc more than this time last year, so trying to afford it all means sometimes you have to buy less.”

He said at various points throughout the season, they got resistance from mill clients overseas, but they managed to get through it.

He said most exporters did not like taking risks, so you have to attempt to predict what was ahead.

“You’ve got to look at what’s around the corner, where there’s drought or currency changes; they’re outside factors that you can’t do anything about, but still have to consider,” he said.

Despite the dry conditions influencing vegetable matter, Mr Lamb said the quality of wool that came onto the market last season was good. 

“There’s a bit of a mixture at the moment, there are some prem-shorn wools that were shorn early probably because of the dry period, and then you get some better clips that are from areas that have had a bit of rain,” he said.

But he said overall, it had been positive to see the market in such a healthy state.