Wool Price Differential Narrowed

July 2, 2004 -- The average price differential between U.S. wool and Australian wool narrowed to 82.2 percent in May. This is the narrowest margin wool producers in the United States have seen in many years.

One of the measures the American Sheep Industry Association (ASI) chose to utilize in analyzing the progress of the Wool Trust Programs was the price differential between U.S. wools and their equivalent Australian wools. For example, in January of 2002, when the Wool Trust programs were first launched, on the average, U.S. wool prices as a percentage of Australian wool prices were 49 percent.

Slightly more than two years later, in May of 2004, U.S. 64?s grade wool (20.6 to 22.04 micron) brought 95 percent of that of Australia?s equivalent wool prices, compared to 61 percent for 64?s wool prices in January of 2002. This is the narrowest price margin the U.S. wool industry has seen since the early 1980s.

In another comparison, U.S. 56?s grade wool (26.4 to 27.84 micron) brought 39.8 percent of their Australian equivalents in January of 2002 while in May of this year that was narrowed to 69.4 percent. Over the last 25 years, 56?s have averaged 85.6 percent of Australian equivalents. This indicates that there may be further value difference in the medium to course wool categories in the United States.

?Basically, we have seen a substantial improvement in U.S. wool prices as a result of the work being done by the ASI American Wool Council programs utilizing Wool Trust and U.S. Department of Agriculture?s Foreign Agricultural Service (FAS) funds,? said ASI Director of Wool Marketing Rita Kourlis Samuelson. ?More buyers are bidding on domestic wool.?

Staff contact: Rita Kourlis Samuelson, ext. 29

<< Back