Lindenow South wool grower Shaun Beasley, Emu Park, fears the deadly coronavirus could weaken trade to China and have devastating effects on Australia's wool export market.
On average, Mr Beasley exports about 80 per cent of his Gippsland-grown wool to China each year.
He urged the federal government to maintain its trade links with China, particularly for the prosperity of drought-stricken farmers who were entering their fourth and fifth years of drought.
"The only thing farmers can do is make sure that our federal minister for trade Simon Birmingham keeps the channels open to the Chinese authorities to make sure we maintain access to the market," Mr Beasley, who runs one of a handful of self-replacing Merino flocks in the region, said.
"The Chinese have been buying wool for us for a longtime; they buy wool and wheat, and they're our major trading partner so you would think we'd have a fairly strong relationship and be able to keep those channels open."
But Mr Beasley, a wool grower of 40 years, said it was too early to gauge the effects of coronavirus and the toll it could take on the Australian wool market.
"A lot people are wondering how this compared to the SARS virus in 2003 but it's difficult to tell because we had quite good wool prices then and they dropped off that year and whether that was from SARS, it's quite hard to tell," Mr Beasley said.
"I sold wool in the first week of January and the market lifted 80 or 90 cents so up to $1 a kilogram and then dropped back 40-60 cents and its picked up and dropped back again.
"The pass-in rate last week 30-40 per cent so producers are holding wool back ... but my view is often you're better to sell it for market price and get on with it. "
Should mutton prices continue to rise and price of wool do the opposite, Mr Beasley said he would make slight adjustments to his operation by selling wethers a year or two earlier and increasing his ewe flock.
"The old rule of thumb is once the carcase value of the sheep, i.e wethers, are worth more than the wool clip you'd sell them," Mr Beasley said.
"So years ago we used to sell wethers for $20 and we used to get $30-$40 a year off them but now with mutton at 600 cents any wether is going to make $120-$130 and you might get $60 of wool so the mutton value is worth twice the amount of wool."
Bryce Eishold
Bryce is a senior journalist with Australian Community Media's Stock & Land where he reports on all aspects of agriculture. Bryce is also the president of the Rural Press Club of Victoria. Email Bryce at bryce.eishold@stockandland.com.au.
Bryce is a senior journalist with Australian Community Media's Stock & Land where he reports on all aspects of agriculture. Bryce is also the president of the Rural Press Club of Victoria. Email Bryce at bryce.eishold@stockandland.com.au.
