Time to sell

Attracting a higher premium for higher yields

Wool
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As the wool market hits a five year low, premiums are being paid for high yielding lines.

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Chris Croker from southern NSW said there is no point in holding his wool clip over in hope of better returns when he may be able to attract a premium for his higher yields.

Chris Croker from southern NSW said there is no point in holding his wool clip over in hope of better returns when he may be able to attract a premium for his higher yields.

Southern NSW wool producer Chris Croker said he will be meeting the market when his wool clip is offered next week despite the EMI dropping to its lowest level in five years.

According to test results from his 19.1-micron clip at Ayrston, Taralga, combined with current market quotes, he believes it is sound enough to attract a small premium.

"There is a lot of lower yielding wool coming onto the market, and even though ours aren't right up to where they should be, there aren't a lot of wools around as clean as ours," Mr Croker said.

"There's no denying we are still going to be affected dramatically, the wool market has fallen close to 50 per cent, but hopefully we will attract a premium for the higher yields.

"I am taking the fall, knowing that if I was to hold it over in hope for a better return later down the track, I would probably be met with stronger competition as everyone will be on the same playing field."

After plummeting another 32 cents last week the Eastern Market Indicator (EMI) was at its lowest point since 2015, landing at 1139 cents per kilogram, clean.

This was 627c lower than the corresponding June sale last year when the EMI was at 1766c/kg.

According to Nutrien Ag Solutions southern NSW wool manager, Craig Lawson, the present EMI is not a true reflection of what is currently happening in the market.

"Because there is not enough quantity of the better wools, the market is being quoted negative, but in fact the better wools are above those quotes," Mr Lawson said.

"The market is only just there, but the better, higher yielding wools are above the average.

"The weight of bad yielders, low newtons, and high mid-breaks - all those types of wools are still greater than the better ones and that is what is keeping the market reported as negative."

He said the better yielding lines were "significantly" better than those yielding under 60 per cent.

Mr Croker, who shore his 3000 Merino sheep in May, said the average yield for the entire clip was 68pc including bellies, locks, stains and pieces.

"The better fleece lines all tested above 70pc yield or above," he said.

"One line which tested 70.4pc yield were off my weaners with nine to 10-months growth."

He said they experienced a 'green flush' about two months before shearing, which ended up in a break in the wool, predominately at the base.

"This affected the strength, but that would have happened about eight weeks before shearing, which meant that there was approximately 16mm of wool where the break was," Mr Croker said.

"If you have about 100mm average length for 12 months, you're growing 2mm per week, so if you bring it back to eight weeks prior, which is roughly where the break was - you can work it out."

So just how long will it be until buyers will see more high yielding wools enter the market?

Not soon enough according to Mr Lawson.

"There are glimpses of the higher yielding fleeces coming into the market now, especially from the south eastern area, but there are still not enough," he said.

"I would estimate, at the moment, the yields are five to even seven per cent better then where they were two to three months ago.

"Around Boorowa and Cootamundra they weren't even yielding 60pc, now they are in the mid 60's.

"Wool from western and far western areas, their yields are getting better, but they aren't going to be where the south eastern wools are."

He said once wool starts entering the market from spring shearings he expects yields to get closer to 70pc, but doubts there will be wools yielding 74 to 75pc.

"The Goulburn catalogues are probably the best that we have got, certainly in the northern region," Mr Lawson said.

"There is a sprinkling of high yielding wools there which will keep the buyers fairly interested."

With years of experience as a wool classer in sheds around southern NSW as well as the Riverina and western regions, Mr Croker believes higher yielding wools will always come from sheep that have more density across the body, allowing less dust and vegetable matter (VM) to penetrate the wool.

"There is no doubt dust has been the problem in the last couple of years," he said.

"You only have to talk to shearers and they will tell you they have been at some places and they have been using 30 to 40 cutters a run, because they are going into the backs of them and its just dirt down the entire length of the staple on the back."

"In my opinion, it's important maintain that density across the back. You may not have the length of some other sheep, but then their wools tend to fall open and you end up with a lot more lower yields.

"Bad backs in a sheep can reflect to a kilo of wool that is coming out of the backs and going onto a line that are only yielding 50 percent."

But as far as the wool market goes, Mr Croker recognises the industry is facing a long road ahead.

"We are going to have to get out of this year first before we look at what we are going to have next year," he said.

"I know plenty of people out west who have yields they have never seen before, unprecedented low yields.

"If we are sitting in a little basket with a bit better wool, then we are doing well."

The story Time to sell first appeared on Farm Online.

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