Wool

GVP $944 million est. Down 15% year-on-year.
Consumer demand for textiles remains subdued due to economic uncertainty.
NSW shorn wool production was flat year-on-year.

A combination of stable wool receivals and a lower weighted average wool price drove GVP 15% lower to an estimated $944 million. Variable seasonal conditions limited any increases in wool production and the impact of the economic downturn on global textile demand continued to have a significant effect on wool prices and export demand stagnated. The Eastern Market Indicator (EMI) broadly traded sideways and within a relatively tight range throughout the year.

Production

Dry conditions and above average temperatures impacted key wool-growing areas during spring, with many producers managing feed deficits. Conditions had eased by early summer with widespread rain across the central and southern parts of the state offsetting the dryer winter and spring and providing a much-needed boost for shorn wool production. NSW shorn wool production remained steady year-on-year, estimated to reach 119.5 million kilograms greasy²⁹ up 0.4% on 2022-23 levels. There was a minor increase in the number of sheep shorn, up 2.7% year-on-year to 26.6 million head,²⁹ reflecting a higher number of held over lambs and older breeding ewes due to lower sheepmeat prices. However, average wool cut per head was down by 2.2% to 4.5 kilograms,²⁹ attributable to a higher proportion of lambs shorn, the dryer seasonal conditions, and a

very a slight decrease in average staple length.³³ Despite stable raw wool output, NSW wool test volumes showed a 4% decline to just over 96 thousand tonnes.³³

The composition of the NSW breeding ewe flock remained largely Merino, at an estimated 66%, up slightly from 64% in May 2023.⁹⁴ From these Merino breeding ewes, 72% were for pure bred Merino lamb production.⁹⁴ The May 2024 Sheep Producer Intentions Survey indicated that year-on-year producer sentiment regarding both the wool and sheepmeat sectors had fallen, with seasonal conditions, feed availability, input costs and wool prices the key factors impacting on-farm decision making.²⁹

Price

The benchmark Eastern Market Indicator (EMI) was range-bound for much of the 2023-24 season, opening at 1126 and closing at 1142 cents and trading in a relatively narrow band between a high of 1,213ac/kg in January 2024 to a low of 1,126ac/kg in September 2023.³² This represented an intra-seasonal difference of just 87ac. Year to year movement in the seasonal average EMI saw a fall of 147 cents from 1,302ac/kg clean in 2022-23 to 1,159ac, an overall 11% reduction in value.³² This was 12% lower than the five-year average and was also below the COVID-impacted 2020-21 season and the lowest seasonal average since 2014-15.

Despite the tight range, the price losses were greater at the finer end of the market. The Micron Price Guide (MPG) for 16.5-micron wool fell 225ac (11%) and the 17-micron wool fell 163ac (9%) over the course of the year. In contrast, 20-micron wool only lost 25ac (1.8%) and 28-micron crossbred wool gained an average 66ac (20%) over the course of the year.³² This resulted in a small decrease in the seasonal fine to coarse wool price spreads.

AWEX NSW auction statistics indicated a 1.9% decrease in the volume of first-hand Merino wool offered across NSW, and a 4.5% increase in first-hand Crossbred wool offered.²⁹ The total number of bales offered at auction nationally for the season totalled 51,698, up 3.2% year-on-year, supplemented with more wool tested in previous seasons.²⁸ The total national value of wool sold was $2.24 billion, a 7% or $180 million fall in gross raw wool value over the past year.

Premiums and discounts for welfare standards such as Non-Mulesed (NM) and Ceased Mulesing (CM) wool reduced in 2023-24, in-line with the overall reductions in fleece value. Mulesing status tends to be conditional in its impact on price in that it only has an influence when paired up with certain combinations of attributes. However in general, premiums for wool with a CM-NM status tend to be focussed (on average) on Merino fleece that is finer than 19 micron and with good staple strength.³¹

AWEX Australian monthly micron price guides and 17micron to 26micron premium

Premium
All Wool
17um
19um
21um
26um
30um

Download data (.XLSX)

Non-Mulesed (NM) Price Premiums

17um
18um
19um
20um
21um
22um
28um
30um

Download data (.XLSX)

Trade and Macroeconomic Conditions

The availability of shearers continued to challenge the industry although the situation has improved in-line a general increase in labour availability post COVID.¹²⁶ However, whilst the availability of labour has largely corrected, the cost of shearers increased which is likely to be an ongoing issue for some growers.¹¹³; ¹¹⁶

Whilst the volume of NSW wool exports remained steady year-on-year at just under 74 thousand tonnes, the total export value fell 12% during 2023-34 to $663 million, reflective of a decline in the average export price of finer wools.⁷⁹ This trend was mirrored when including exports out of Melbourne. Buyers were cautious and a lack of buyer competition - particularly from European buyers - was the main culprit, with inflation and large retail inventories leading to sluggish demand.⁹⁵;³⁰ This situation resulted in many wools, notably the superfine Merino segment which is usually destined for the European manufacturing sector, being sold to alternative buyers. Exports of greasy shorn wool 19µm and finer to Italy fell 24% year-on-year by volume and 43% by value.⁷⁹

China remained the largest single buyer and most important market for NSW wool. Exports to China increased 8% year-on-year by volume but fell 4% in value.⁷⁹ Despite their ongoing economic issues, Chinese demand remained steady and was boosted by a further 5% increase in the quota for zero-tariff wool products, in-line with the terms of the China Australia Free Trade Agreement. China's share of NSW exports of wool increased to 88% by volume and 86% by value.⁷⁹

Outlook

The outlook for wool remains uncertain. Seasonal conditions are supportive for good pasture growth over the remainder of spring, although forecast high summer temperatures could impact pasture quality. Sheep numbers are forecast to remain relatively stable. The Australian Wool Production Forecasting Committee’s (AWPFC) second forecast of NSW shorn wool production for 2024-25 is 111.4 million kilograms (Mkg) greasy, down 6.8% year-on-year.²⁹ However, the current global economic conditions are likely to continue to continue to drive uncertainty within the wool industry. Further recovery in demand for woollen apparel in key markets as well as more buyer competition is needed to materially improve prices. At the time of writing, the EMI was expected to fall by 2% to 1,131 c/kg in 2024-25.³

DPIRD Initiatives in Focus

Edible Shelter Project

The Edible Shelter project is investigating the impacts of different types of edible shelter on the physiology, behaviour, welfare and survival of sheep, along with the nutritional benefits in mixed farming enterprises, in collaboration with partners across Australia.

The Edible Shelter Project will investigate the impacts of different types of edible shelter on the physiology, behaviour, welfare and survival of sheep, along with the nutritional benefits of the feedbase in mixed farming enterprises at 30 research sites. Outcomes from the study will inform recommendations for shelter types in sheep enterprises. The Edible Shelter project is part of a larger Shade and Shelter Project that investigates and develops interventions to reduce the climatic variation on sheep enterprises. The shade and shelter project is a collaborative research project between Meat and Livestock Australia (MLA), the University of Western Australia, Murdoch University, CSIRO, the Department of Primary Industries and Regional Development (DPIRD) and a number of other industry partners.

A weather station monitoring wind, temperature, rainfall, and humidity within crop.

Edible Shelter Projects

Crop Height Project

This experiment will compare the survival of twin lambs born in paddocks with crop a different height (high≥30cm, medium≈20cm, low≈10cm). It further aims to assess grazing behaviour, activity, and utilisation of shelter by ewes.

Shelter and Lamb Survival Project

This experiment will compare the survival of twin lambs to marking when born in a paddock with shrubs or crop compared to the best pasture lambing paddock on the farm. A total of 28 on-farm research sites will be established over three years in WA and NSW.

Click here for more information.