May 11, 2007
May 11, 2007 - The full impact of the 2006 drought in Australia will be evidenced by sharply lower fresh wool production over the next six months, according to the latest release by the Australian Wool Innovation Production Forecasting Committee. Fifteen years ago, Australia produced over 4 million bales of wool, and now they produce just 2 million bales.
The industry-based committee predicts that for the last four months of the 2006-2007 season, shorn wool production and broker receivals will decline by an average of 20 percent to 25 percent year-on-year.
This will result in Australian shorn wool production falling to 425 million kilograms (greasy) for the full season.
Committee chairman, Dr. David James, says it is important that those in the industry understand the distinction between production and supply to market.
Wool supply, as measured by auction offerings, has been particularly robust for the 2006-2007 season, with the increase in auction offerings largely being met by shearings brought forward and the release of wool from grower stocks held in-store and on-farm.
"However, this increase in supply should not be confused with shorn wool production," James said. "It is expected that Australian fresh wool production will decline significantly over the next six to eight months as the full impact of the drought hits."
While total Australian auction offerings in the last quarter declined moderately year-on-year, offerings in the 20-micron, 21-micron and 22-micron categories all fell sharply. This appears to be a progressively worsening trend throughout the season as supplies of medium merino wool shrink.
The committee also made its first forecast for the 2007-2008 season, with a significant part of the first half of this season also expected to be adversely affected by the latest drought.
Assuming normal season conditions for the winter dominant rainfall regions across Australia, the Committee forecasts that Australian wool production will decline modestly to 420 million kilograms greasy.
Offsetting a projected overall improvement in fleece weights in 2007-2008 will be a 4.5 percent or 4.5 million head decrease in the number of sheep shorn for the season, resulting from a sell-off of sheep by woolgrowers through much of the 2006-2007 season in response to the drought. Reprinted in part from Bombala Times, Australia