20
September 2013
Taranaki/ManawaTu FarMing LiFesTyLes
Livestock
Wool Perspective From Rob Cochrane GM, Procurement, PGG Wrightson Wool
Wool market remains healthy The first few weeks of the new wool selling season showed that the market is currently in good health, reflecting limited wool supply and a relatively empty pipeline from farm to end market. With reasonably favourable weather conditions experienced during July, shearers were up with the play by early August after being in ‘catch-up’ mode in late June, wool flows into stores were steady and wool quality was very good. Traditional pre-lamb shorn clips, especially from Otago and Southland but also a number from the Canterbury region did not appear to have been too adversely affected by the June snow falls, many looked to have clipped good ‘per-head’ weights and, generally, yield tests were higher than normal.
The majority of wool on offer was very well grown and displayed good washing colour, allowing the exporting fraternity complete confidence when making their purchasing decisions. All South Island auctions held during July and into mid-August drew wide spread support from manufacturers across the globe with prices remaining firm, when compared to those ruling at the close of the 2012/13 season at the end of June, despite an also firm Kiwi dollar, and high percentage clearances of the vast range of types on offer was achieved.
PGG Wrightson auctioneers were extremely pleased with the results of the early season auctions considering the range of types offered within their catalogues which included a few Merino lots at each sale, a good range of Halfbred and Corriedale types, plus a very good line up of top quality pre-lamb shorn Crossbred and Perendale types, both full-length fleece and second-shear. All wool types met with enthusiasm from the full bench of buyers present at each auction with a new buyer, introduced through PGG Wrightson, showing interest in some of the early season Merino wools. Oddment types, across the board, continued to sell at levels almost right up to fleece price in many cases and were often quoted as ‘extreme’ by market observers. As we look towards the main part of the wool season, it is difficult to imagine that prices will slump to any major degree due in the main to wool quantities being limited as the national sheep flock continues to diminish. Demand is currently definitely outweighing supply, which augers well for wool growers, with the main influencing factors likely to be currency fluctuation and wool quality, however, and as earlier mentioned, the strong
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Kiwi dollar has not had any major effect on pricing this season to date, and it’s interesting to note, that when comparing the Kiwi dollar and the New Zealand wool price over a period of years, there has been little to suggest any significant correlation. Most wool price market movements appear simply dependent on the demand vs supply equation and, whilst some pundits may not enjoy such comment, that is an unfortunate but true reflection of the nature of the commodity called wool. I have often remarked about wool quality and preparation standards and while both are extremely important to ensure full value is obtained, the current situation with many wool types testing significantly higher for yield (yield = clean wool once impurities are removed) than perhaps is normal, is worthy of note, particularly for those growers who may consider selling their wool at the farm gate with no test data. Based on the strength of current market pricing, PGG Wrightson has a range of fixed price forward contracts available, backed up by mainly European manufacturers, at attractive clean prices providing income assurance (subject to meeting contract specification) for a portion of your future wool clip. That’s my view.
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