Wool weaves old magic again

Barloo Merino stud principal Richard House says wool has turned a corner.

This year's wool industry will be all about supply and demand.

Everyone, from the Australian Wool Forecasting Committee to WA growers, is predicting the current imbalance will drive a strong market in the next six months.

While the national clip is down 30 million kilograms on the previous season, the national forecast has held its ground since March.

And the committee's latest forecast is the first time in two years the figures have not been revised down.

Elders Upper Great Southern district wool manager Paul Schutz says the market can only be described as positive.

He said that, according to all reports, there was not a lot of greasy wool overseas and consistent pre-Christmas supplies up to 50,000 bales at sales had shown they were more than meeting the market.

Mr Schutz said those figures were 5000 to 10,000 bales down on the previous year and while people were restocking "there are still more sheep going out of the industry than coming in".

"Elders thinks it will take a season or two for the flock to consolidate, with a lot of dry and older sheep - traditionally the heavier cutters - going out," he said.

"A lot of people are still looking at sheepmeat for quick cashflow but there is now a genuine opportunity for any Merino-type wool.

"The type of wool they are producing is a matter of choice.

"I know guys doing better with Samms but a lot of that depends on your country, your management program and your business goals."

Shearing through the Upper Great Southern is autumn-based. Mr Schutz said he was hoping it would be able to stretch out to May when people started looking at seeding.

"Older sheep were once six to seven years old but now they are more likely to be 4 1/2 to five years," Mr Schulz said.

"People looking to buy in have to compete with shippers and processors as well as other growers, so with prices where they are they want younger sheep, which will give them a few lambs along the way."

Last season's shearing figures show the impact both season and the swing to cropping have had on local production.

WA numbers shorn were down 14 per cent in 2008-09 on the previous year - to just 18.74 million head.

South Australia's figures also fell 14 per cent but all other states were lower.

New South Wales and Queensland fell 8 per cent, Victoria just 7 per cent and Tasmania's small flock dropped 12 per cent to 2.55 million.

Barloo Merino stud principal Richard House said he was about to go on holidays, thanking his lucky stars he was still in sheep.

Mr House said he could never understand any farming business that put all its eggs in one basket.

He said Barloo's 7000 hectares had always been a mixed enterprise.

"And that I believe is why we are still in farming," Mr House said.

"Our country is suited to both sheep and cropping - I like to have my fingers in as many pies as I can find."

Now those big pies are looking pretty good.

Mr House has to think back almost 20 years to the last time the sheepmeat and wool industries were both surging at the same time.

He also agrees with Paul Schutz and the figures from the forecasting committee that when the market reopens, it won't be going backwards.

"If the global financial crisis is coming to an end, I think the biggest issue facing the wool industry will be getting supply to keep up with demand," Mr House said.

"We are coming off a very good ram and sheep-selling season and I know the Merino will reflect its value as the versatile sheep it is.

"Right now, people who run Merinos will be showing how hard it is for others to compete with them on a dollars per hectare basis."

Barloo runs 8000 ewes, including 2000 stud ewes, and cuts about 500 bales of wool which, for the past five years, have averaged 20.5 microns.

Forecasting committee chairman Russell Pattinson had the last word when he said Australian Bureau of Statistics figures showed that in the first four months of 2009-10, sheep kills fell 19 per cent, although lambs were up 6 per cent.

Perhaps the most telling figure was the live export market - with numbers down a whopping 27 per cent.

   Printable Version