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April 2018
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EXCHANGE RATE:
AUD/USD 0.775
Market Outlook
Demand keeps Australian wool prices up
Prices for Australian wool have been at a record high and this is where it will stay according to many industry players. New and innovative uses in Merino wool, in areas of automation, leisure, and sportswear, underpin demand.
China’s unstoppable appetite for Merino wool is adding to these higher prices. And although some weeks prices may dip, as one exporter mentioned, this is more to do with domestic Australian wool industry anomalies such as one-off poor quality wool offered on a given day, an inability by buyers to secure credit, but not a drop in demand.
Australian wool prices increased by almost 30% compared with last year. At the end of 2017 the EMI reached 1760ac/kg for the first time. The highest increases were for wools of 16.5 – 22 mic. 1,919,447 bales were offered for sale with a clearance rate of 92.7%. Main buyers were Techwool (231,591), Fox & Lillie (149,470), Tianyu (75,012), PJ Morris (71,666), Australian Merino Exports (64,716).
China imported 238.4 mil kg of wool, an increase of 4.5% from the previous year. China wool top exports were 27.5 million, 2.4% down. This indicates that an increased demand is in the domestic market.
‘It is all about China’, says Robert Wang China manger at AWTA. ‘Domestic consumption of woollen products in China has grown dramatically in the last five years. If previously most processing was for export, today at least 50% is for domestic use, and this is growing year by year.
‘Consumers in China were previously driven by price, but today quality and colour comes first. This is mainly due to the average Chinese consumer having a greater disposable income. Unemployment is low, salaries have been rising, and the government has introduced guaranteed super schemes (pension), so people will have a greater security of income and more money to spend.
‘I have just come back from Mongolia, a remote part of the world, but even there most ladies are wearing woollen coats’, says Robert Wang. ‘And this is not Beijing or Shanghai, consumers everywhere appreciate quality, and wool fits their needs perfectly.’
The introduction of new products in China such as fake fur and double sided fabric are still doing reasonably well but at the very high end, using mostly 17 µm wool. Corporate uniform production is still increasing every year and although wool only represents 15% of fibre consumed, the volumes are so large that even 15% represents huge quantities of wool.
Steady demand from buyers in China, Europe, and India will see wool prices firm for some time to come.
Source: woolnews.net
Landmark Wool Weekly - April 13
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The Australian wool market showed remarkable resisilience in the return from the one week recess as buyers responded to the largest offering for the season. After faltering on the first day of sales in each selling centre, prices rebounded to finish the week strongly. Some Merino prices were lower for the week but others were higher, notably in Fremantle. Crossbred wool mostly had a good week, with buyers seeking 26-30 micron wools and pushing prices higher. The EMI rose by 4 cents to 1777 c/kg. The AUD was slightly higher against the USD and the EMI lifted by 12 USc to 1376 USc/kg. A total of 54,409 bales were offered across the three selling centres, of which 6.1% was passed-in.
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ASI Accepting Nominations for Sheep Center, ALB
The American Sheep Industry Association is accepting nominations for directors to serve both the National Sheep Industry Improvement Center and the American Lamb Board.
Recognized as a nominating organization by the U.S. Department of Agriculture, ASI will accept applications through May 11 for positions with both entities before forwarding qualified applicants by USDA's May 25 deadline.
There are two vacancies on the NSIIC board - one for a sheep producer and one for an individual with expertise in finance and management. Nomination forms for the sheep center are available at http://sheepusa.org/Resources_AlliedOrganizations_NsiicNominations.
On the American Lamb Board, there are four openings: a producer with 101 to 500 lambs, a producer with more than 500 lambs, a feeder with 5,000 or more lambs and one first handler. Nomination forms are available at http://sheepusa.org/Resources_AlliedOrganizations_AlbNominations.
Anyone interested in applying for either NSIIC or ALB should first consult with representatives from their state sheep association. Applications should be submitted to ASI Executive Director Peter Orwick at porwick@sheepusa.org and nominations will be considered by the association's executive board.
Source: Sheep Industry News
Advanced Shearing Schools Added to Schedule
Watertown, S.D., will play host to two advanced shearing schools this summer with AWI Shearing Instructor Mike Pora once again making the trip to the United States to serve as the lead instructor.
The schools are scheduled for June 28-29 and July 1-2. For more information, contact Loren Opstedahl at lorkatopstedahl@goldenwest.net or 605-484-3600.
New factsheets show wool’s environmental credentials
Many key facts illustrating wool’s renewability, biodegradability, and ultimate environmental footprint have been compiled in a series of factsheets, free to anyone wanting to know the facts and promote the natural fibre.
These factsheets are a science-based resource that point to peer-reviewed, published studies. Developed to help underpin the credentials of wool as an environmentally responsible natural fibre, the factsheets cover wool’s natural production, decomposition and the measurement of the wool’s environmental footprint.
With the increasing prioritisation of sustainable resources as consumer textile choice, Merino wool shines out as a leading natural, renewable and biodegradable fibre. Scientific studies are revealing that synthetic fibres such as polyester and nylon have detrimental impacts on the environment. One recent revelation is the pollution and toxicity problems caused by micro-plastic fibres in natural ecosystems. Whilst synthetic fibres do degrade with physical exposure to the elements, they never fully decompose and this causes pollution in waterways, landfill and debris. Natural fibres, such as wool, biologically degrade and return to the environment as nutrients, elements and proteins. Because of this quality, wool is considered an environmentally responsible choice in textiles.
As one of the world’s oldest known fibres to be used in textiles, dating back to 1500 BC, wool’s natural and renewable production has been the obvious choice in the past and remains the choice for the future as the demand for sustainable textiles continues to increase. Wool is grown all year round by Australian Merino sheep with a simple mix of water, air, sunshine and grass. Once wool is in service in the textile industry, it has longevity of use, is reusable, recyclable and is eventually biodegradable. This versatility – spanning between the cradle to grave life of wool – lowers its overall environmental impact.
As the 2014 study Biodegradability of Wool: Soil Burial Biodegradation has shown, wool naturally decomposes in as little as three to four months, returning vital nutrients such as nitrogen, sulphur and magnesium to the soil.1 The McNeil study has also shown that when wool is broken down by microorganisms the return of these nutrients to the soil can improve the dry matter yield by up to 82%.2 Instead of stripping our soils of nutrients and fertility, the production and decomposition of wool has the capacity to enrich soil and self-sustain the production cycle.
Wool’s biodegradability, together with the long service life of wool garments – on average 50% longer than cotton garments as evidenced in the Neilson Company report – reflect a lighter environmental footprint.3 With greater scope in emerging scientific studies that considers the sustainability of different fibres, not just in the production phase but with consideration of the broader impact fibres have on marine life, natural habitation and environmental pollution, the story of wool can be better understood as the sustainable textile fibre that it is.
Source: AWI
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In The News
Wool is Cool Again, and the Prices are Shear Madness
Brands from Adidas to Lululemon and Under Armour are touting wool’s soft feel and odor-resisting properties
Wool isn’t just for winter wear anymore, and its use in everything from shoes to underwear briefs is pushing prices of merino, the most popular type of wool fiber for clothes, to near-record highs.
Wool sneakers popular in Silicon Valley from startup Allbirds Inc.helped kick off a global trend. Brands from Adidas to Lululemon and Under Armour are selling wool apparel, touting the fiber’s soft feel and odor-resisting properties. Merino wool, named for a breed of sheep, is even being woven into shorts, tank tops and short-sleeve T-shirts.
Demand has helped drive up merino wool prices at a time when the sheep population in Australia and New Zealand, the world’s largest wool exporters, is near a 100-year low. Many sheep farmers here invested in converting their operations to dairy farming or higher-yielding crops after prices of wool collapsed in the 1990s.
In Australia, which produces the bulk of merino wool used by major clothing brands, benchmark wool prices were recently around $14 a kilogram in U.S. dollar terms, up 56% from 2016. Prices last peaked in 2011, when an Australian dollar was more valuable than a U.S. dollar. Now, it is the reverse, indicating that supply-and-demand is the primary force boosting merino prices.
Some manufacturers say the limited supply of high-quality wool is creating sourcing challenges.
“It’s a natural material so you can’t just crank up machines and produce more,” said Nicola Simpson, chief operating officer at Icebreaker, a clothing brand that recently agreed to be acquired by VFCorp. the Greensboro, N.C., apparel company, for undisclosed terms.
Icebreaker uses a merino fiber of a particular diameter, and Ms. Simpson said even on farms already producing fine merino wool it could take seven years of breeding to get sheep producing the desired wool.
Since its founding in 1995, Icebreaker has sourced its merino wool from farms across its home country of New Zealand. Last year, as prices climbed, the company offered 10-year contracts to some farmers to lock in supply. It is also buying wool in Australia and considering sourcing some from as far away as South Africa, Ms. Simpson said.
Merino wool shirts from the New Zealand clothier Icebreaker, displayed in New York City.PHOTO: AP
Smartwool, another VF-owned brand that makes merino socks, hats and other apparel, also is trying to lock in multiyear supply contracts.
Driving demand for wool is a shift in consumer attitudes toward the fiber and efforts to market and promote it as breathable, moisture-wicking and environmentally sustainable compared with synthetic materials like polyester and nylon, which are derived from petrochemicals. Recent developments in technology have produced wool garments that don’t shrink after washing.
And then there are those wool sneakers. “Everyone in my office wears them. It’s kind of part of the uniform,” said Christine O’Brien, who works at a San Francisco tech company and owns several pairs of Allbirds wool shoes.
Kristoffer Ulriksen, category managing director at Norwegian sports brand Helly Hansen, said when the company outfitted the Spanish sailing team Mapfre for the current round-the-world Volvo Ocean Race, the sailors demanded merino. “It’s the only thing that doesn’t smell after two weeks at sea,” Mr. Ulriksen said.
Many brands that charge a significant premium for wool products say they are absorbing higher wool costs for now.
German sports-apparel giant Adidas has increased the number of wool items it sells fivefold in five years, even as it has cut the total number of products it sells, according to Craig Vanderoef, the company’s senior director of running apparel and customization.
“What is surprising is how willing people are to accept wool as ‘new,’” he said.
 Allbirds wool sneakers were in vogue at a brand hiking event in Los Angeles in December 2016. PHOTO: TOMMASO BODDI/GETTY IMAGES
A long-sleeve Adidas wool T-shirt retails for 20% more than a comparable one made from polyester, mainly because merino is costlier, Mr. Vanderoef said. He said Adidas has no plans to raise prices.
There isn’t enough wool in New Zealand to meet all the new demand, and some buyers are being turned away, said John Brackenridge, chief executive at New Zealand Merino Co., a farmer-owned entity responsible for the sale of around 70% of the country’s fine wool. More than 50% of New Zealand’s fine wool is now sold by longer-term contracts, compared with around 35% five years ago, he said.
U.S. clothing brand Brooks Brothers Group, which sells some collared shirts and suits made from wool, has seen its cost of the material rise by between 25% and 30% in the past two years. Gianluca Tanzi, chief operating officer, said the company had increased efficiencies elsewhere, which allowed them to absorb the costs.
Ercole Botto, chief executive of Italian textile manufacturer Reda, said higher wool prices are hurting.
“We are in the difficult place in the pipeline,” he said, “because the growers have increased the price because the market has increased demand, but our buyers do not want us to increase the price.”
“We are fighting,” Mr. Botto said. The family-owned company, which has been producing textiles for 150 years, has increased the average cost of its fabrics by around 20% in the past year. “I’m absorbing some costs. It’s making me poorer,” he said.
Some companies are strengthening connections with wool producers. Tim Brown, a New Zealander and co-founder of San Francisco shoe manufacturer Allbirds, recently traveled back home to meet with sheep farmers. He took some farmers out for beers at a local pub and showed them sneakers that used their merino.
Wool “has been de-commoditized,” said Joey Zwillinger, Allbirds’s other co-founder. He declined to disclose revenue or profit numbers, but said Allbirds’ sales have risen 450% from a year ago.
Source: Wall Street Journal
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From our customers...
"Roswell Wool is a well managed business that is run by a fellow producer who understands the industry. The sales system used by Roswell Wool suits our outfit well as it creates a competitive environment that delivers a good price for our wool."
Burt Kunzler - Park Valley, UT
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Mike's Corner
March has come and gone and I was hoping that the winds from March would have left with March, but they are still here middle of April and we are still having gusty winds and extreme weather around the country. There are those of you that are standing in snow today. There are those of you that are in mud from heavy rains and/or melting snow. And there are those of us that are still standing in some very dry conditions! Weather related shearing delays have been an issue from California to Montana and back down here to New Mexico, which will be affecting our volume in next week's sale as many wools are yet to be shorn and brought into the warehouse.
Our March 27 sale was a huge success with record high prices being paid. We actually had a record high price for U.S. wool of over $5.50 greasy per pound for John Jewell from Colorado on his yearling wool that cored 17+ micron with a 65+ percent yield. It is a fun time to be selling fine wools but it is not much fun selling wools that are coarser than 25 micron, as these wools are still having a hard time moving/selling.
I ask everyone to go the extra step to make sure that you know each and every person involved with your shearing this spring, and/or your docking of your lambs, or anytime that you are working your livestock, as the animal rights groups around the country are still out there and looking for animal abuse situations and we must be aware of who is around our operations at all times. I am proud of our Industry and I am proud of how we as an Industry take care of our animals and our livestock, but there are people out there who will do anything they can to twist our situations and make it look as if we are not taking care of our animals properly.
Wool is enjoying being considered the “in” fiber for many sport garments and it is exciting to see the technology coming through to help process wool that is allowing certain fibers to be used in garments that 10 years ago were not possible.
If I can be of any further assistance to you and or your operation please give me a call and I will do my best to help you.
Sincerely,
Mike Corn
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Contact Us
Roswell, NM Warehouse
Mike Corn
mikecorn@roswellwool.com
(575) 622-3360
California, Nevada, Oregon, Washington, Idaho
Ian MacKenzie
ian@roswellwool.com
(661) 363-3260 cell
Colorado, Utah, Wyoming
John Jewell
john@roswellwool.com
(970) 379-0397 cell
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