WOOL yields are down about 2.7 per cent on the same time last year as a result of shorter wools with higher exposure to dust and dirt due to the continuing dry conditions experienced across major wool growing areas.
AWEX Market Information Manager, Lionel Plunkett, said there has been no enormous change so far, but drought wools were starting to come through and will continue into Christmas and well into the new year.
In an statistical analysis conducted by Mr Plunkett, except for a spike in yield at the end of January (70.9 per cent), it has been a declining road for yield with most recent figures sitting at 65.7pc.
In fact the figures show yield is tracking well below the previous five year average.
“From about week 25 or the end of June, if it is a good season, the yield starts to pick up, but the statistics are showing it sitting below the average,” Mr Plunkett said.
“In 2010 we had good rainfall and the better yielding wool has followed in those couple of years after.
“It seems to be a longer term type of trend, not as reactive as I had predicted.”
Mr Plunkett said in an average year, buyers can anticipate what is coming onto the market, knowing the natural trend is for yields to normally drop off after Christmas leading into summer and autumn.
“In these circumstances it probably becomes more important because it’s ‘out of the box’,” he said.
“Most processors have their own specifications for wool, they may have different batches, but they will tend to concentrate on what they know their machinery can do.
“They know what they can work with so all of a sudden if there is fewer of those wools that they are chasing with a minimum yield specifications on their orders.
“They will have to factor that in, or they will have to chase and pay more on those fewer lots that are higher yielding.”
But wool is still selling well and is forecast to remain strong in the market.
In its latest Agricultural Commodities quarterly released last week, the Australian Government’s agricultural commodity forecaster, ABARES, included its latest forecasts for 2018/19 in the publication.
It predicts that the EMI will average 1990 cents per kilogram clean in 2018/19, a 15 per cent increase on the 2017/18 average of 1723 c/kg.
One feature of ABARES new forecasts is that it now predicts that sheep numbers will fall by 2.3 million head by the end of 2018/19, following a 700,000 drop over the 2017/18 season.
Needless to say, this will make it very difficult for a recovery in wool production in 2019/20, even if the drought breaks and seasonal conditions improve significantly.
