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Mecardo Blog

To shear or not to shear, is that the question?

Posted by Robert Herrmann on 1 June 2017
Robert Herrmann
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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.

How much are the added costs to shear twice?

This is the first understanding a wool producer considering more regular shearing will address. As with much about this subject, it’s not all straight forward. There is the obvious cost of a second shearing, but also the removal of the need to crutch. In some instances, more regular shearing has assisted in the transmission to a non-mulesed flock with subsequent wool marketing benefits. It will also depend on the individual property situation; how difficult is it to arrange another shearing, some wool producers find this the most demanding time of the year and once a year more than enough! Will it add another level of complication when lambing is considered, but it may also mean managing flystrike and lice is easier? Many considerations and conflicting aspects to consider.520b23295a0602057cdbf5db04d28d2a.jpg

More wool – is this possible?

The claim is made that sheep produce more wool when shorn more regularly. We could only find one study that supported this, with The Kondinin Group publishing a trial in 2012 where a 0.42 kg increase was observed. Kondinin also published testimonials from wool growers that were emphatic that sheep produced more wool compared to a once a year shearing. Anecdotally sheep farmers notice that after shearing sheep improve body weight and also grow wool more quickly. This may be a result of sheep requiring greater protein (more feed) to maintain body weights after shearing and more wool is a resultant spin-off. If this were the case, research into the conversion rate of consumed protein and net value equation should be applied. What if the supposed additional feed is not available?

Most of the published case studies reported increased wool production; this would need to be tested as it appeared many of the reports were over a particularly good season.

Will we produce better wool?

Shorter staples have long been recognised as having greater staple strength so shearing more often will have a benefit. After fibre diameter (micron), staple strength is the next biggest impact on wool price so any improvement is positive.

Is there a premium for shorter wool?

Well, based on the processors messages passed back through brokers to wool growers there should be! The answer however is that any reward for producing shorter wool is unclear. It will depend on the market at the time; recently premiums all but disappeared as too much short wool appeared in the sales roster, at other times buyers are scrambling to fill orders. In fact, “The Sheep’s Back” Autumn Report (AWI sponsored publication), are emphatic that there is no premium in the market place for shorter wool and for the practice to be economical, the enterprise “must have spare time, labour and be able to generate more lambs”.

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What could go wrong?

Well, apart from the lack of a price premium to offset increased costs, the biggest risk is that if the season is tough, perhaps the staple length produced is very short and a discount is applied. This would be a disaster as not only are the increased costs of shearing twice incurred, but the clip income is jeopardised.

Is there more to this?

It is clear from testimonials that sheep are easier to manage, have more lambs and the need for crutching is eliminated or reduced. Also, respondents report the spreading of wool sales is good, however the concern of not meeting a minimum staple length is a concern.

Ideally producing the exact length for the processor makes sense, but which processor? Do all processors require shorter staples, if so what is happening to longer stapled wool now?

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Some attention needs to be applied to the different micron categories to identify if the demand is across the board or not, and if the benefits apply from one region to the other or does the various VM, yield and other district factors change the dynamic.

Clearly the decision to shear more regularly to generate increased profits from the wool enterprise is unclear! If a premium exists, what does it look like? Is it consistent, across micron types or does it vary from sale to sale? We will perform further analysis on this concept in coming weeks, taking account of any longer-term market signal (or not), applying wool producer experiences to identify all benefits to the mob, and modelling the cost/benefit that can reasonably apply. In the meantime, let us know of your experiences – good or bad.

Topics: Wool market / wool price, Wool industry