A NEW report says wool prices are at a longtime high and should remain strong well into this financial year, particularly for fine to medium wool categories.
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According to Rural Bank’s 2017 Australian Wool Annual Review, growing export demand and limited supply from Australia saw the Eastern Market Indicator (EMI) rise by 10 per cent to 1507 cents/kg in the first half of 2017.
Meanwhile, the 17-micron price guide rose 45 per cent in the past 12 months.
The report, launched by specialist insights team Ag Answers, says this comes after almost 20 years of declining shorn wool production.
Good for grower
That’s good news for the region’s woolgrowers, including David Gowing, who has recently started shearing 500 to 600 sheep twice a year.
“Prices are better than they’ve been for some years – they’re not right through the roof yet or anything like that … but they’re profitable at this stage,” Mr Gowing said.
“I reckon the returns from straight merino breeding, if you’re able to sell wether lambs as fat lambs, are probably more profitable than beef right at the minute.”
In fact, he said he’d just delivered some hereford steers to the feedlot and was receiving 40c/kg less than last year, and “that’s taken the edge off cattle”.
Mr Gowing, who runs his fine-wool merinos over three different blocks west of Tamworth, said prices were “fairly close” about six years ago.
“Taking inflation into account, I think they were just as high, but it was a pretty small spike,” he said.
Good for sector
Jemalong Wool regional manager Tim Drury said that, as a flat-rate marketer, the price highs’ short-term effect would be minimal on the business, but “good for the industry”.
“What it does is creates more interest in the industry, then farmers generally will see that sheep and wool are a profitable enterprise,” Mr Drury said.
“They might look at that as an alternative to cropping at the moment, which is probably one of the poorer-performing enterprises.
“They look to buy more sheep and ... that means more to shear so that means more business for us.”
Rural Bank agribusiness general manager Andrew Smith said the expanding national flock was set to rise by 4 per cent to 76.6 million head by June 2018.