Industry News

Industry News

Merino wool prices have been rising steadily since the start of 2016. As a result, the Eastern Market Indicator has risen from 1265 c/kg at Christmas 2015 to 1331 c/kg as at 21st October. The current level is at the highest point for much of the past five years, with the exception of mid-June last year when prices spiked temporarily. The current increase appears to be more sustainable. At the same time the saleyard price for lambs and sheep for slaughter have eased a little after recent highs. The price for Merino lambs hit an all-time high of 601 c/kg at the end of June but have since fallen back to 493 c/kg last week. This follows the usual seasonal pattern as increased supplies come on to the market in September. Sheep prices also hit a recent peak of 411 c/kg (the highest since August 2011) and have slid to 359 c/kg last week.

The widespread rain since May seems to have encouraged producers to retain sheep and even lambs, judging by the latest available data from the Australia Bureau of Statistics. There have been 635,000 head less sheep have been slaughtered in the first eight months of 2016 than for the same period in 2015. As well, almost 150,000 less live sheep and lambs have been exported. Lamb slaughter, which had been well above year earlier levels consistently since the start of 2012, was only a slight 25,500 head higher in the January to August period this year. In total, there were 758,600 less sheep and lambs turned off in 2016 to August. Given that the Australian Wool Production Forecasting Committee estimates that there were 68.5 million head of sheep and lambs as at 1 July 2016, this is a significant drop in turn-off. Hopefully it heralds the start of a recovery in the Australian sheep flock.

Full details including a chart showing the trends in wool, lamb and sheep prices, and a second chart showing the trends in sheep and lamb slaughterings is included in the NCWSBA Weekly Newsletter for the week ending 21st October 2016, available to NCWSBA members.

National Council of Wool Selling Brokers of Australia

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