Wool Reporting Changes from a Grease Basis to a Clean Basis

• report prices that fully reflect the value of a wool clip;
• create new and more accurate price series of wool prices by micron and areas within the United States;
• establish similar terminology of comparing micron prices and differences in wool marketing; and
• provide more accurate information for users of U.S. wool - export buyers.

"Having a universal language is imperative when comparing prices and determining the market," said Rita Kourlis Samuelson, American Sheep Industry Association (ASI) deputy director of operations and the wool marketing director. "Reporting wool on a clean-wool basis helps in comparing and reporting U.S. wool prices. More importantly, it is crucial in determining the actual value of the wool and lessens the wool-value mystery."

In addition to the move to clean-wool prices, AMS has also developed a new reporting system call the National Wool Review. This system reports wool of similar quality and types in three areas of the United States: the Fleece States east of the Missouri River, the Territory States west of the Missouri River and Texas/New Mexico.

All reported sales by buyers, sellers, warehouses and brokers are input each week into spreadsheets, creating the weekly weighted-price average for each area by individual micron. The number of cooperators in this report has expanded so that no individual's trades are singled out via the weighted-average reporting format.

In his presentation to the ASI Board of Directors, Ron Cole, who reports the U.S. wool prices for AMS, said that it is a priority to get clean-wool prices from all the wool reporting contacts, all the while maintaining a high-level of confidentiality of information for buyers and sellers.

This reporting system is similar to the Australian price-reporting system. Both the high and low prices are combined using the volume reported, which creates a true weighted-average price each week. This data is then input into a national database to create statistical reports, which can be used by the entire wool industry, universities and the economic and statistical communities.

"The USDA/AMS has played such an important role in reporting wool prices and developing ways, such as this, to create a more transparent market," said Kourlis Samuelson.

To view the current National Wool Review, visit: http://www.ams.usda.gov/mnreports/GL_LS850.txt

Sidebar:
Prices are quoted each week by area and by micron on a clean-wool basis. The price can be multiplied by the estimated yield to get a gross value of the wool. Handling charges, freight and coring costs are deducted to get the net-wool value for each price represented. For example: