Be cautious in keeping 'mini' wool stockpile

Be cautious in keeping 'mini' wool stockpile

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Thought should be given to minimising exposure to moisture, dust, insects, birds and theft when storing greasy wool.

Thought should be given to minimising exposure to moisture, dust, insects, birds and theft when storing greasy wool.

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Storage of greasy wool in farm bales requires careful consideration as a long-term strategy.

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Storage of greasy wool in farm bales requires careful consideration as a long-term strategy.

Thought should be given to minimising exposure to moisture, dust, insects, birds and theft.

It is understood that grower stocks continue to build this season, with estimates of 180,000 and possibly as many as 300,000 bales now in surplus Australia wide.

Does part of our Australian wool industry believe that building a new "mini" stockpile is a better investment than selling it for the current prices?

Is this segment of the market aware of the pitfalls of storing raw wool for long periods of time?

Many of us have experienced working during the "stockpile era" with the last of it processed during season 2003/04.

Scouring and processing issues were apparent and subsequent discounts were applied to each category of stockpiled wool.

This "mini" stockpile, however, is different as it is owned by individual wool growers and stored in many wool brokering warehouses and farms Australia-wide.

We owe it to the market to make sure wool stockers comprehend that wool quality and value deteriorates over time.

We know that stockpiled wool attracts discounts compared to new season wools.

Discounts are applied for many reasons, ranging from poor wool grease extraction, reduction of wool whiteness, moth damage and oxidation of wool grease, creating more mechanical effort to open the wool before scouring.

The major impact affects early stage processors, causing under-yields of up to 3 per cent compared to normal new season wool.

The impact of a 3pc processing under-yield is as follows:

  • Seasonal wool 240 bales/44,400 kilograms at 72pc, equals 31,968kg wool tops versus
  • Stockpiled wool 240 bales/44,400kg at 72pc, less 3pc, under-yield equals 30,636kg wool tops

In the above example, on a typical batch of 18.5-micron wool the impact of a 3pc wool top processing under-yield equates to a loss of 1332kg of product.

If the wool top was sold at $22 a kilogram, then the supplier would receive $29,304 less for the wool tops made from the stockpiled wool compared to the new season wool.

To overcome the under-yield, a price discount of 66 cents a kilogram (clean) should apply to the stockpile wool.

This is an example only and the severity of yield loss will vary for different wool categories.

Considerations

  • If you decide to store your wool then where will you store it and how long are you prepared to store it for?
  • Does your broker charge you storage costs after a given period of time?
  • How do you monitor quality issues relating to potential deterioration over time?
  • If you decide to store your wool for several years, will you treat your wool against moth damage?
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