What a spectacular market fall and did anyone plan for it?
KareeWool is hosting 42 wool growers, from as far as Tilpa, NSW, to Bengworden, in China this week to investigate and understand the fundamentals of this dramatic wool market situation.
Why did this happen?
What are the key drivers to cause wool values to suddenly fall by more than 30 per cent since auction sales resumed last month?
Will the market experience a "dead cat" bounce in the short term and then continue to drop further before lower support levels are found?
What is our future as sheep and wool growers?
Our study group will visit and tour one of the largest vertical worsted garment manufacturers in the world, which allows wool growers to see every stage of the wool pipeline within the same facility.
This is a true "farm to market" factory with greasy wool bales incoming and packaged high-end worsted garments outgoing.
Australia no longer has the investment in such industry and therefore travelling to the northern hemisphere is our only option to see it in action.
We will also meet and tour specialist early-stage wool processors in each of the scouring, carbonising, top making and spinning sectors.
Some of these companies face significant financial losses should wool prices continue to remain at the new lower trading ranges, as inherently they carry old raw material and product.
We understand that they are struggling to sell anything at the moment, and therefore will not place further orders into the Australian wool market until they have the confidence to do so.
They are waiting for further consumer market signals, should they be positive or negative.
Our meeting at Donghua University in Shanghai with AWI was very positive for the long term, with significant progress in new and innovative methods to consume wool in the active, outdoor and sportswear market sectors.
Our grower group is now more informed about their responsibilities to continue to invest in ongoing research and development for growing consumer markets such as China.
Ongoing education about our Australian grown wool and it's natural, sustainable and responsibly grown elements is vital.
China is emerging as a leader in online buying and AWI's current work to position our fibre in the right place for the future is exciting.
We will also meet with MLA China to research the demand for our mutton and lamb product and what the future holds regarding our meat product.
What can we do as farmers to improve our product for this enormous market and what are the opportunities going forward?
A splinter group will tour a sheepskin tannery that typically processes 60,000 sheepskins, from all origins, a day which will be an experience, to say the least.