For some time, we have been writing about our concerns for the Merino Wool industry, noting the “fight for acres” to date has been well and truly won by the croppers. To top it off, the number of ewes now mated to terminal sires has also been growing. It hurts an old shearer/wool classer/wool broker/wool market watcher to see properties that for over a hundred years proudly produced Merino wool, jump ship and either rip out the fences and plant crops, or purchase terminal rams and get into prime lamb production.
Topics: Wool industry
The announcement by Prime Minister Modi of a ban on the “sale of any bovine animals for slaughter” has caught analysts of guard, with some early reports filtering through that this is not a major event on the world beef stage; we are not so sure.
It is pretty clear from reading the government decree that failing any backflip by the government, this will impact the slaughter of cows, buffalo and even camels.
For some time, there have been messages from wool processors that much of the Australian wool clip is too long. If this is true then shorter lots should attract a premium – this would be a normal economic lever to attract more of the type, and if that is the case can wool producers justify the additional cost of two shearings in one year?
To get to the bottom of this issue, a full understanding of the situation is needed. It is normal for suppliers (wool growers) to want to meet customer requirements (processors). At the same time, meeting the “new” requirement cannot increase the net costs to the business unless there is an off-setting increase in income.
Merino sheep have been the cornerstone of farming success for a large area of rural Australia for almost two centuries. In recent times, though, Merino sheep numbers have fallen, with challenges from some of the “other” broad acre farming alternatives such as cropping and prime lamb production. There are plenty of articles and published information for those wanting to look for the financial comparisons of one enterprise to another, or for the performance of wool/merino sheep enterprises over time. The AASMB website has an excellent series of reports that detail the very good returns Merino producers are achieving.
However, despite the profitable times wool and merino sheep have enjoyed in the recent past, the move to prime lambs and the resilience of cropping acres is not abating. We also know of many wool producers who are delighted with their Merino operations, in this article we look at Kurra Wirra and it's work on ABSV's.
In a recent Mecardo lamb analysis article we highlighted the discrepancy between the sheep & lamb price quotes coming out of the saleyards compared to the prices quoted for “Over-the-hooks” (OTH) lambs.
At the moment, everyone continues to quote saleyard prices as being miles ahead of OTH prices. We need to remember that not a single lamb in those saleyards has been weighed. No-one follows
up with the buyer to work out what they dressed out at. The market reporting is based on the sale price ($ per head), converted using an estimated weight and an estimated yield to arrive at the cents per kilogram carcass weight.
The wool industry relies on the shearer as the first stage in the harvesting and movement of wool to its ultimate market. And while this process has been successfully carried out since sheep first arrived in Australia, it is curious that this harvesting system has progressed little over time. The timeline for the evolution of shearing is slow, interrupted with disputes and false starts.
In this blog we look at one innovation with the potential to take wool harvesting to the next evolutionary level.
There are times when you just have to stand up; “it’s now or never”. Coaches espouse the need to win the crucial 3rd quarter, the “break” point in a tennis game, or bowl the “dot” ball at a crucial time of a cricket match. “Sometimes there is no next time, no time-outs, no second chances. Sometimes it’s now or never." The playwright Alan Bennet probably wasn’t talking about the wool industry, but he could have been.
Prices are great but the industry is in decline, how do we learn from other industries to save Merino in Australia. How do we make merino great again?
In an attempt to secure supply a recent response from grain traders and merchants to the low world prices is to offer and promote to grain growers No Price Established (NPE) contracts. As with any contract there has to be something in it for the seller, and also something for the buyer. Lets have a quick overview looking from both sides.
It is important to note that NPE contracts come under many different guises including Fast Cash from Agfarm, and Market Advantage from AWB.
The EYCI has hit an all-time high of 660.50 cents per kg cwt; this brings to the fore the question of where is the top of the cattle market? Has the market peaked? The old adage of “it takes high prices to fix high prices” starts to resonate.
We have also been around long enough to see frenzied bidding when conditions are good and grass is abundant – grass fever!
In rural and mainstream news services there is a regular stream of stories recounting the disastrous situation dairy farmers find themselves in as a result of the “claw-backs” advised by the milk processors last month.
Unfortunate as it is, these claw-backs are part and parcel of the milk supply agreements most of the dairy farmers in Australia commit to. In this article we aim to give an insight into dairy contracts for those outwith the dairy industry, and why most of the risk is held by the farmer.