All eyes on wool as market resumes today

Wool market returns from winter recess

Livestock
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The wool market returns from its three-week winter recess today.

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Nutrien Wool South East Australia region manager Stephen Keys ahead of the first wool sale after the winter recess.

Nutrien Wool South East Australia region manager Stephen Keys ahead of the first wool sale after the winter recess.

Industry experts will be watching the first wool sales after the winter recess with interest, fully expecting it will remain volatile due to the COVID-19 pandemic.

Nutrien Wool South East Australia region manager Stephen Keys said there was solid demand for the final two sales before the recess, but COVID-19 was continuing to cause disruptions to global supply chains and undermining consumer confidence.

"We're hopeful the market continues to find some stability as it reopens but the pandemic has impacted economies worldwide, decreasing the demand for apparel and other wool products," Mr Keys said.

"The recovery will depend on when consumer confidence begins to return."

He said everyone at Melbourne's wool selling centre, in the western suburb of Brooklyn, was complying with government advice to control COVID-19.

Only essential staff are permitted to enter the centre, auctions are being conducted under social distancing protocols, and everyone is wearing masks.

Those working out of the Sydney selling centre are also watching what's happening in Melbourne closely, and is also taking steps to minimise risks.

"In my 40 years in the wool industry, I haven't seen anything like this," Mr Keys said.

"But the industry is resilient, so we will adapt, work with our clients, both growers and exporters, and get through this.

"Our business has been committed to Australian wool growers for more than 160 years and we know that this too will pass.

"We've seen market downturns and recoveries, and it will happen again.

"Our only job in the wool supply chain - and our number one priority - is to represent the grower.

"We don't hold equity positions in downstream manufacturing or brands."

He said the Nutrien team was drawing on years of experience to support clients - providing market insights that helped them answer the hard questions, with advice on products to improve their pasture, livestock genetics, labour efficiency and finance.

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David Hart manages Nutrien Wool in the north-east of the country, including most of NSW and Queensland.

Mr Hart said the low wool prices had hit growers in this region particularly hard as many are still recovering from drought.

"Drought decimated sheep numbers and it decimated bank balances," he said.

He said a much improved season would hopefully lead to good lambing in the spring.

He was also encouraged by wild dog exclusion fencing being built in parts of Queensland.

"There are sheep going back into areas where we haven't had sheep for 20 or 30 years," he said.

Mr Keys said the focus of the wool team in the past few months had been working with clients to help them decide how best to market their wool in these difficult times.

With high levels of wool being passed in, wool in stores was increasing.

He said it was important for wool growers to receive sound advice, and be kept up to date with the latest worldwide developments.

Mr Hart urged clients to keep talking with their wool agents to "lighten the load" during this challenging time.

"It's about being there with practical advice and emotional support; there's a myriad of ways we can assist including financial products to help you restock," he said.

Wool boxes lined up at the Melbourne woolstores ahead of the first sale after the winter recess.

Wool boxes lined up at the Melbourne woolstores ahead of the first sale after the winter recess.

Jon White manages the broader Nutrien Ag Solutions team across south-west Australia, and he said for growers producing prime lambs, as well as wool, they were seeing sheepmeat prices remain firm so far.

A recent report from leading agribusiness analysts Mecardo prepared exclusively for Nutrien Wool customers, urged growers to keep these wool stocks in perspective.

The report said there seemed a reasonable chance that after the pandemic, demand would return to levels of the past decade, particularly as production was lower.

To shore up demand, Nutrien Wool is talking regularly with overseas wool buyers to understand what's ahead and guarantee growers are ready to make the most of the opportunities as they return.

Tuesday's Nutrien Wool catalogue in Melbourne will be the first to contain all the legacy Landmark and Ruralco lots together.

WISS Woolbrokers' lots will also be included in that catalogue.

Mr Keys said there had been excellent cooperation from all industry participants to ensure wool auctions continued during the pandemic.

He said it was a credit to wool brokers, wool exporters, Australian Wool Handlers and Australian Wool Exchange, that have been pro-active in their approach and decision making.

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The story All eyes on wool as market resumes today first appeared on Farm Online.

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