eastern healGolden Fleece

DAVID LENEHAN: Its not just were running sheep anymore. Were producing an article, and getting that consistency and that and most wool producers are aiming towards that now – is their almost specialising in the type of wool theyre producing.

And we live in country thats been a bit dry – in the western district. And so this is a ntastic day today for us.

DAVID LENEHAN: Particularly since the heavy rain in January that we had here, theres been quite a few coming around in the district. Its really been the main topic of conversation lately, has been chasing fly blown sheep.

DAVID LENEHAN: The sheep like short sweet grass and weve got large amount of grass out there thats getting a bit long, which is causing a few problems as well. So, its gone from one extreme to the other – of not enough to almost too much.

PETER MORGAN: I dont think theres anyone who follows the industry who doesnt worry too much about the market going up like that, because weve got plenty of history of it coming back at the same rate.

But weve really got to go back to the 1980s – the late 1980s – when we had a very sustained, very good period, where the EMI got up around 1260 odd, I think, yeah.

One of the other great problems this hot and humid summer has been fly strike, and as you can see its done some enormous damage throughout the sheep districts of Australia.

DAVID LENEHAN: Considering the season weve had with all the wet weather its coming up quite well, probably actually more wool than we had last year on the sheep.

TIM LEE: Years of slim margins have winnowed out the less committed and less stidious wool growers.

TIM LEE: And theres always something to bring wool growers back to Earth. After years of dusty conditions, this seasons wool clip will show the effects of the exceptional wet year: Lots of grass seeds in the wool and some discoloured fleeces.

BRUCE PETITT: People have stuck with wool recently over the last couple of years – or stuck with sheep, and of course now its an advantage because here we are with wool improving.

Now, at last, those who have stuck with wool through some very hard times are being rewarded. Handsomely.

And to me its very, very interesting because we are seeing more and more people now having a go at wanting to improve their wool. When wool was still down and mutton was up, they were all wanting to go to mutton sheep.

(classing wool) Good (inaudible) of length, which means now the tops going to come out nice at that 80, 90ml length.

BRUCE PETTITT, WOOLCLASSER: Its just been so down for so long, that its hard to sort of see an improvement in the situation.

LACHIE BROWN: Whats really been driving that is pretty much a lack of supply of fine wools. Also, your medium wools have been caught up in this as well and risen upwards of 150-200 cents also since the Christmas break.

TIM LEE: And all this despite the strength of Australias surging dollar. Without doubt, the key reason is simply a shortage of wool sheep. The national Merino flock is a shade over 72 million – the lowest in more than a century.

DAVID LENEHAN: Definitely, yes, and its always every time something goes well, therell be something else there. It sort of equals out.

TIM LEE: Cross bred wools have risen between 20 and 30 per cent. Thats about 200 cents a kilogram. Wool is back in vour among the worlds leading shion labels.

HEATHER MCINTYRE, WOOLGROWER, DUNKELD, VICTORIA: We were terribly pleased today. Its made above valuations and the best prices for some 23 to 25 years. And thats a great thing for the wool grower – particularly the superfine wool grower, because we havent really been getting the value for the work we put into the breeding and the nurturing of our sheep.

HEATHER MCINTYRE: Our neigeastern health australiahbours are going into cattle and t lambs and cropping. Croppings becoming a big thing in the district now and the sheep numbers have reduced considerably.

And those that still have sheep are joining many of their ewes to a prime lamb sire and breeding prime lamb mothers. So but weve stuck to this one, this one issue and this one product, and were very pleased and quite proud today of our product.

PETER MORGAN: Theyve set a pace that the Chinese industry has had to match if they wanted to buy the wool, and its been very, very good for the Australian wool growers.

JOHN MCINTYRE, WOOLGROWER, DUNKELD, VICTORIA: Certainly there has been some dramatic drops in superfine wool after the peaks there in 1988-89. But when you look at the overall commodity picture in the world it would be expected, I think, that these sort of prices will remain – particularly in the light of the ct that there isnt a lot of this wool being grown anymore even in – not only in Australia but in other part of the world as well.

ANNE KRUGER, PRESENTER: Hello, Im Anne Kruger, welcome to the program. First, its heady times in the wool shed – a bumper season with grass up to your knees, strong mutton prices and a surging wool price.

ANTHONY WEEDING: I think the meat industry will keep them pretty well in check – the numbers – so thats obviously going to keep wool, you know, wool levels down because theres less sheep and hopefully that will increase competition for what wool there is.

LACHIE BROWN, ELDERS: Basically, seen gains in excess of 200 to 300 cents on the – mainly at the fine end of the market, Tim.

MARK QUARTERMAIN: Weve also seen the enormous cold snaps, weve seen in the northern hemisphere this year – which has also started to deplete wool stocks up there thatve been on shelves for quite some time. And also recovery in Italy and also in America where people are back buying clothing, white goods and motor cars.

TIM LEE: An exceptionally cold European winter has helped shrug off the effects of the global financial crisis.

TIM LEE: Indeed, up till a year ago, most of Australias eastern sea board had experienced a decade of well below average rainll. The change in recent months has been dramatic.

BRUCE PETITT: In my experience I have seen so many wool producers go through the tough times, and it is just so thankful to see them getting a decent return from wool.

MARK QUARTERMAIN: When you look at the cost of raw materials that go into other fibres or textiles that compete against wool, theyre all running at all time highs at the moment.

DAVID LENEHAN, BANONGILL STATION, SKIPTON, VIC: Been really good, um, yeah. Everyones sort of talking up sheep instead of downgrading them, really, with sheep and in conjunction with the mutton prices and lamb prices as weleastern healGolden Fleecel, people are smiling.

TIM LEE: China annually buys about three quarters of the national wool clip. Increasingly, its seeking the finer wools, once almost the sole domain of the European textile makers like Italy.

MARK QUARTERMAIN, AUSTRALIAN WOOL NETWORK: What weve found at the moment, Tim, is that the Eastern Market Indicator commenced the selling season at 898 cents and completed – so r at the moment, just on 1189 cents. So, weve seen an increase of well over 50 per cent since the market opened up in July.

PETER MORGAN: Its believed that theyre taking something like 50-60 per cent of the wool that comes into China is being consumed in China, whereas once, most of it was of course, was being processed and re-exported.

eastern healGolden Fleece,Its been more than two decades since all those ctors came together – briefly, as it turned out, just before wool prices crashed.

ANTHONY WEEDING, WOOLGROWER, OATLANDS, TASMANIA: We probably, you know, $3 for the stronger stuff and $4 to $5 better off than last year, which is quite significant when you put that over a whole flock. So, it certainly helps the bottom line.

PETER MORGAN: Thats entirely due to the season. The wonderful seasonal conditions that weve had, has made the fibres tter, for lack of a better expression. And so, we got an overall pressure on supply and we got an even greater pressure on supply at the fine wool end.

TIM LEE: But dont expect Merino numbers to increase rapidly so that rmers can cash in on the rise in wool prices.

John and Heather McIntyres wool topped the prices at this Melbourne sale – 1960 cents a kilogram for wool shorn from two-year-old mixed sheep. It was just reward for the couple, who never lost their ith in wool.

TIM LEE: At Banongil Station near Skipton in western Victoria, shearing of the 25,000 strong Merino flock is in full swing. In the 1800s at the peak of the wool boom, there were once 32 shearers working in the historic wool shed.

LACHIE BROWN: The problem we have often with spikes in the wool market is that a lot of your textile manucturers start to substitute and move over to alternative fibres such as cotton and manmade fibres – polyesters, acrylics.

At this stage, what were seeing is – all textiles are basically at or near in record levels – in particular, cotton, which is going to allow the wool market to sustain these gains in the near term.

TIM LEE: The Weeding brothers from Oatlands – in the renowned fine wool country of central Tasmania – are a case in point. They run a flock of around 19 microns, and like many in recent times they moved away from wool into more prime lamb production.

TIM LEE: Bruce Pettitt has been in the industry for 50 years as a wool classer and dipping contractor. He wisely points out that had it not been for the good mutton prices of recent years, Australias Merino flock would be even smaller.

BRUCE PETITT: A shortage of the good quality wool, the lack of the number of sheep in Australia at the moment, and the – particularly in this area, tough times weather – wise, largely, the last X years that weve been through. People have – because there hasnt been the returns in wool, people have gone out of wool and gone into cropping more and more.

TIM LEE: And, no, its not an aberration or a short-lived illusion. Good prices, say the experts, look like sticking around.

So, were starting to see generally around the world – and the likes of India still playing a major stake in buying most of those wool types. And yeah, certainly increased demand right around.

NICK WEEDING, WOOLGROWER, OATLANDS, TASMANIA: It means well, a huge amount, you know – a lot to the end dollar. And gives us a ir bit of ith to be back in the wool industry. So, yeah, at least for a while. A lot of people were scratching their heads at things, but no, its good time. Its good times.

JOHN MCINTYRE: We do sell – grow some wool thats shorn in the autumn and Im shuddering to think what thats going to be like as r as vegetable matter and colour, and some of those other attributes are concerned.

PETER MORGAN, AUSTRALIAN WOOL INDUSTRIES: The last serious rise that weve had was after the disposal of the stockpile – in 2002, 2003, when the graph went up like that and the EMI peaked I think at 1195.

MARK QUARTERMAIN: Those producers who have stuck at wool have seen some substantially sound returns for surplus livestock sales or sheep sales in the last 12 months. And of course, now with this increase in wool price a lot of those medium type and strong wool clips out of the pastoral zones are now increasing by $300 to $400 a bale. So thats now seeing some good returns for those producers also.

TIM LEE: Most wool growers have a wish – profitable and sustainable prices. But no-one in the industry is getting too smug.

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