- GVP $1.05 billion est. Up 24% year-on-year.
- Consumer demand for wool increased post COVID related movement restrictions.
- Exports up 52% on 10-year average to $706 million.
Production
Price
AWEX Australian monthly average micron-price guide 215
- All Wool
- 17um
- 19um
- 21um
- 26um
- 30um
- FY 2021-22
Trade and Macroeconomic Conditions
A combination of strong economic recovery in the US, followed by inflationary pressures and rising interest rates saw the US dollar gain ground steadily over the Australian Dollar (AUD) during the course of the year. The AUD opened the year at approximately 0.748 AUD/USD, to ultimately close the year at approximately 0.701 AUD/USD, which lent support to the wool market. 234 Offsetting this was the higher shipping costs incurred by exporters, with reports ranging from 150 cents/kg to 200 cents/kg higher, with these costs either absorbed by exporters or passed on at auction. 218 China once again was the predominant export destination for NSW wool exports, making up 83% of exports by value. 35 Australia continued to gain Chinese wool import market share which increased to 63% in volume terms and 79% in value terms for the 2021 calendar year in volume terms. This increase in market share came at the expense of key competitors New Zealand which declined 2 percentage points year on year, and South Africa which declined 3 percentage points year on year respectively. 46 However it was our second largest and premium market being Italy, which saw the strongest recovery with exports increasing 321% year on year to $50.2 million. 35 While this is still well below peak export levels to Italy, these exports serve as a good indicator of the relative improvement in the global economy and increased consumer demand for high end wool products.
NSW Wool Exports By Micron Range 35
- 19 Um and Finer
- 20 Um To 23 Um
- 24 Um To 27 Um
- 24 Um and Up
- 28 Um and up
- Other
Outlook
Global economic uncertainty is likely to continue to continue to drive uncertainty within the wool industry, with consumer confidence slipping from the initial highs of the post COVID stimulus influenced levels. 221 Strong inflation both domestically and abroad is influencing central bank decisions around monetary policy and resulting in interest rate rises to keep inflation within target bands. Additionally, the US is beginning to undergo a second phase of Quantitative Tightening (QT), which will effectively reduce the liquidity of cash into the US economy and reduce the US Federal Reserve’s balance sheet. 222 At the time of writing there is a strong possibility of the US slipping into recession, which could easily be mirrored by other large consumer markets such as the EU and Asia. Inflation, rising interest rates and fears of a recession are ultimately impacting consumer confidence, which ultimately points towards the possibility of a drop in retail demand, with the wool market likely to feel these pressures directly.
Stronger Primary Industries Strategy
On-Farm Energy Pilots
NSW DPI is currently implementing 7 pilot projects across 8 sites to demonstrate innovative technologies and practices to improve on-farm energy efficiency, energy security and productivity and to reduce on-farm energy use, costs and emissions. The pilots are being implemented at farms located across NSW in intensive sub-sectors including dairy, horticulture and feedlots. A total of $3.96 million dollars has been invested by DPI and the pilot proponents.
Strategic Outcome
Technological solutions demonstrated in the pilot projects include: solar thermal chilled water storage and control systems for milk cooling; electrification of irrigation pumps powered by a solar photo voltaic tracking system raised above the ground to enable livestock grazing in the same location; solar photovoltaic and battery storage systems; electrification of LPG and diesel fuelled equipment; and, peer to peer energy trading. Once completed, the pilots will enable the dissemination of case study information to the sector more broadly and reduce risks associated with the early adoption of innovative energy technologies in agriculture. Monitoring and evaluation of the pilots is on-going with case studies and supporting documentation of the effectiveness of the pilots currently being produced
Project summaries:
Pilot: Avondale farm
Pilot project: Electrification of grain mill; automation of grain mill; off-grid 100kW single axis tracking solar photovoltaics (PV) + 264 kWh lithium ion battery + 150kVA backup genset
Site location: Rowena
Pilot: Dairy NSW (2 member farms)
Pilot project: Solar powered chilled water storage and control system for milk cooling
Site Locations: Jones Island, Wingham
Pilot: Farrer Memorial Agricultural High School
Pilot project: Electrification of irrigation pumps and 60kW raised single axis solar PV tracking system to power irrigation pumps and demonstrate Agrivoltaics
Site Location: Calala
Pilot: Haddon Rig Stud
Pilot project: Grid connected solar PV with a battery backup system to supply electrical equipment to three independent electrical systems and improve reliability of electricity supply on site
Site location: Warren
Pilot: Pecora Dairy
Pilot project: On farm energy generation with solar panels, flow batteries and peer to peer energy trading; electrification of LPG fuelled equipment
Site location: Robertson
Pilot: Rosnay Organic Wines
Pilot project: On farm energy generation with solar panels, flow batteries and peer to peer energy trading; electrification of diesel fuelled equipment
Site location: Canowindra
Pilot: The Pines
Pilot project: On farm energy generation with solar panels, flow batteries and peer to peer energy trading
Site location: Kiama
Website and further details: https://www.dpi.nsw.gov.au/dpi/climate/energy/clean-energy/on-farm-energy-pilot-projects