Wool to benefit as Australia remains in a market re-building phase

Positive fundamentals point to price recovery

Sheep
HIGH PRODUCTION: As more multiple-birth lambs hit the ground this year, analysts predict Merino wool could bounce-back from COVID-19 impacts faster than expected.

HIGH PRODUCTION: As more multiple-birth lambs hit the ground this year, analysts predict Merino wool could bounce-back from COVID-19 impacts faster than expected.

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It's an early call, but analyst predicts Merino wool will bounce back from COVID-19 faster than expected.

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Autumn lambing results are very promising on the back of near-perfect, mild conditions and plenty of solid paddock feed to sustain flocks.

Breeders report that survival rates from multiple births are higher.

So, we anticipate the exceptional lambing percentages to continue going into the winter months.

But rain remains isolated, with some regions receiving good opening falls and other areas experiencing an ongoing dry spell.

The rainfall can best be described as either hit or miss.

We can report that shearing across agricultural regions has slowed, as growers focus on their cropping and pasture development programs.

Tractors and air seeders are certainly the flavor of May.

This gives shearers and shed staff some time to recover from another hectic wool harvest.

In regards to markets, the fundamentals are positive as Australian wool prices remain in a re-building phase.

The spread of value between fine wools through to medium categories remains significant, as buyers scramble for their preferred micron for both combing and carding types.

The volumes of wool offered weekly across the nation during the past month have exceeded production levels.

This means surplus stocks have been absorbed into the pipeline without damaging value, as prices have remained reasonably stable.

This is promising, as grower and broker surplus stocks need to be reduced before prices can surge upwards.

The amount of wool on offer is about double the levels of this time last year, when the global COVID-19 health pandemic caused panic to our markets and growers to withdraw their clips from sale.

If the market can continue to trade and export current wool volumes for the remainder of this season, then the 2021-22 outlook is much healthier for the industry than we anticipated.

It is an early call, but Merino wool types appear likely to bounce-back from the global pandemic impacts more rapidly than most had predicted.

The exception is the crossbred wool sector, which remains unhealthy and is suffering from poor ongoing demand and increasing stock build-up on-farm and in broker warehouses.

The recovery of the overall wool market will continue to be slow and steady, and occur during the medium to longer term.

As the world continues to roll-out a COVID-19 vaccination program, we continue to live with significant travel restrictions - and this impacts retail demand.

So, it will take time before we experience any significant upward price surges for our fibre.

There are only a handful of wool sales remaining before the three-week winter recess period.

So, growers holding wool will need to consider their selling strategy - or face the dilemma of offering old wool into the next selling season.

The 2021 Australian Sheep and Wool Show is scheduled for July 16, so pencil it into your calendars - particularly as the event was cancelled last year.

This is a great opportunity to learn new ideas and network with other industry stakeholders.

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