Media Release
Fresh wool production to fall sharply over the next six months
23 March 2007
The full impact of the 2006 drought in Australia will be evidenced by sharply lower fresh wool production over the next six months, according to the latest release today by the Australian Wool Innovation (AWI) Production Forecasting Committee.
The Industry based Committee predicts that for the last four months of the 2006/07 season, shorn wool production and broker receivals will decline by an average of 20%-25% year-on-year. This will result in Australian shorn wool production falling to 425 million kilograms greasy for the full season.
Committee Chairman Dr David James said it was important that those in the industry understood the distinction between production and supply to market. Wool supply, as measured by auction offerings, has been particularly robust for the 2006/07 season, with the increase in auction offerings largely being met by shearings brought forward and the release of wool grower stocks held in-store and on-farm.
“However, this increase in supply should not be confused with shorn wool production. It is expected that Australian fresh wool production will decline significantly over the next six to eight months as the full impact of the drought hits,” said Dr James.
Highlighting what happens to the seasonal pattern of fresh wool production in a drought, Dr James pointed to 2002/03. In the 2002/03 season, wool production and broker receivals had their sharpest decline in April and May 2003, when AWTA test volumes (greasy) declined by as much as 30% year-on-year.
“We can certainly expect a decline of a similar magnitude in April and May 2007, given the severity of the 2006 drought. The 2006 drought appears to be every bit as bad and potentially worse, as in 2002. In 2002, the drought was largely across the eastern seaboard, but the 2006 drought is Australia-wide, including key wool growing areas in Western Australia and also the western district of Victoria,” said Dr David James.
The committee also made its first forecast for the 2007/08 season. A significant part of the first half of this season is also expected to be adversely affected by the latest drought. Assuming normal season conditions for the winter dominant rainfall regions across Australia, the Committee forecasts that Australian wool production will decline modestly to 420 mkg greasy. Offsetting a projected overall improvement in fleece weights in 2007/08 will be a 4.5% or 4.5 million head decrease in the number of sheep shorn for the season, resulting from a sell-off of sheep by woolgrowers through much of the 2006/07 season in response to the drought.
A full report of the latest forecasts will be available after 2.00pm Wednesday, 28 March on the AWI website at www.wool.com.au/forecasts. The next meeting of the AWI Production Forecasting Committee is scheduled for Thursday 28 June 2007.
Backgrounder
The latest 2006/07 forecast is based on 103.7 million head of sheep and lambs shorn at an average of 4.10 kilograms per head (kg/hd). Estimates by the state forecasting committees of the number of sheep and lambs in the Australian flock at the 1st July 2006 continued to be based on a flock size with opening numbers of around 100 million head. This opening number figure is subject to revision given ABS has yet to release preliminary opening flock estimates for 2006/07.
State by state, NSW 2006/07 production is forecast at 138 mkg, down 11%. Queensland shorn wool production is forecast to fall by 8% year-on-year, Victorian production is forecast to decline to 89 mkg greasy, down by 3% in 2006/07 year-on-year, and Tasmania and Western Australia are forecast to be lower by 9% and 13% respectively. South Australia is the only state to forecast an increase, up 5%.
The first forecast for the 2007/08 season is based on 99.1 million head of sheep and lambs shorn at an average fleece weight of 4.24 kg/hd. The decline in the number of sheep shorn in 2007/08 relates directly to initial forecasts of opening sheep numbers falling by approximately 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), the Australian Wool Testing Authority (AWTA) and the national AWI/Sheep CRC woolgrower survey with responses from 1800 woolgrowers. 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.
| Season |
Meeting |
QLD |
NSW |
Vic. |
Tas. |
SA |
WA |
National |
| 2004/05 |
Dec 05 (e) |
23 |
165 |
98 |
15 |
63 |
112 |
475 |
| 2005/06 |
Dec 06 (e) |
22 |
156 |
92 |
13 |
58 |
122 |
461 |
| 2006/07 |
Dec 06 (f) |
21 |
140 |
85 |
12 |
59 |
104 |
421 |
| 2006/07 |
Mar 07 (f) |
20 |
138 |
89 |
12 |
61 |
105 |
425 |
| 2007/08 |
Mar 07 (f) |
-- |
-- |
-- |
-- |
-- |
-- |
420 |
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