Media Release

Seasonal factors and outlook reduces 2006/07 production

29 September 2006

A lack of late winter and early Spring rain across eastern Australia, combined with the prospect of below average rainfall through to the end of December, has resulted in a significant downward revision to Australian wool production in 2006/07.

In the latest figures released today by the Australian Wool Innovation (AWI) Production Forecasting Committee, the forecast for Australian shorn wool production in the 2006/07 season is 434 million kilograms (mkg), 6% lower on the previous season.  The new forecast is 22 mkg lower than the committee’s previous forecast in July 2006.

Committee Chairman Dr David James said the current forecast for the 2006/07 season reflects that for many of the major wool producing areas across Australia, current seasonal conditions are significantly worse than for the same time last year.

“The season has been disappointing in terms of average rainfall in the last two months across the eastern seaboard,” Dr James said. “According to the Bureau of Meteorology, August 2006 was the driest August for average rainfall across Australia in the historical record from 1900.”

Dr David James said compounding this in several important wool growing areas in NSW, Victoria, South Australia and Tasmania was very little rain in September, a key month for Spring pasture growth.

“Other factors were also taken into account when revising the forecast,” he said.  “A moderate shift in the probability towards drier than normal conditions for the December quarter (October-December) in parts of southeast Australia and low on-farm stocks of grain in certain regions and high grain and hay prices, are all likely to limit the ability for some farms to maintain current sheep numbers through to next winter.”

Stock water is also looming as a critical issue in the 2006/07 season across the eastern states.  Due to a prolonged period of dry conditions, current dam levels are low and so far this Spring there has been minimal run-off into dams. 

Dr David James said unless widespread and heavy rains occur in the next few months, which appears increasingly unlikely, some woolgrowers will be faced with the burden of not only a lack of feed for sheep but also of water.  This will mean additional premature shearings of sheep normally shorn in full wool in the second half of the season and also lower overall numbers of sheep shorn in 2006/07.

A full report of the latest forecasts will be available after 2.00pm Wednesday, 4 October on the AWI website. The next meeting of the AWI Production Forecasting Committee is scheduled for Thursday 7 December 2006.

Ends.

BACKGROUNDER

The committee also made a slight revision to the 2005/06 estimate in consideration of new information relating to changes in on-farm stocks.  The revised 2005/06 estimate is based on 106.5 million head of sheep and lambs shorn at an average of 4.33 kilograms per head (kg/hd).  The Australian Bureau of Statistics (ABS) estimates the number of opening sheep and lambs at the beginning of the 2005/06 season were 101.1 million head.

The latest 2006/07 forecast is based on 103.4 million head of sheep and lambs shorn at an average of 4.19 kilograms per head (kg/hd).  Initial estimates by the state forecasting committees on the number of sheep and lambs in the Australian flock at the 1st July 2006, are for a flock size of around 100 million head.

State by state, NSW 2006/07 production is forecast at 143 mkg, down 8%.  Queensland shorn wool production is forecast to fall by 4% year-on-year, Victorian production is forecast to decline to 88 mkg greasy, down by 5% in 2006/07 year-on-year, and Tasmania and Western Australia are forecast to be lower by 1% and 10% respectively.  South Australia is the only state to forecast an increase, up 4%. 

In developing the forecasts the Committee reviewed the latest available statistics from the Australian Bureau of Statistics (ABS), Meat and Livestock Australia (MLA), ABARE, the Australian Wool Exchange (AWEX) and the Australian Wool Testing Authority (AWTA). The Committee also drew on information from the state sub-committees about conditions and trends in the various regions of each state.

The AWI Production Forecasting Committee comprises woolgrowers, wool brokers, exporters, processors, private treaty merchants and representatives from AWEX, AWTA, ABARE, ABS, MLA, DAWA and The Woolmark Company.

Note: Totals may not add due to rounding.    Figures: mkg greasy       
(e) = estimate      (f) = forecast

Released by:
Sally Davison- AWI Corporate Affairs - (02) 9299 5155 or 0428 295 898. Media contact: Dr David James – tel (02) 9974 5450 or email ecoservices@iprimus.com.au

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