Future wool and lamb markets highlighted
Could traditional wool markets be the answer to the future of the industry? An analyst gives his view.
Putting the focus on traditional European wool markets could be the answer to the future of the wool industry.
While there’s been plenty of talk from within the wool industry about emerging markets such as Vietnam and Bangladesh being the future, Mecardo managing director Robert Herrmann said there could be value in “revisiting” traditional wool consuming countries.
“Countries like Italy, France, Germany and Poland love wool and there is no doubt we will need to keep positioning wool as an elite fibre, so we need to look for higher value add markets,” Mr Herrmann said.
Mr Herrmann was speaking to The Weekly Times on future markets in the sheep meat and wool industries.
“There are genuine markets in those European countries that appreciate and value wool.”
In terms of the domestic wool situation, Mr Herrmann said the market has diverged into three distinct markets, with crossbred wool floundering with no demand, medium wool “pretty good” and the fine and superfine wool receiving extraordinary prices as there is limited supply.
He said a risk going forward, which has been ongoing, is the reliance on China.
“The wool industry has benefited on the back of China, there are geopolitical concerns in that area. If you compare lamb being sent to China with wool (being sent to China), you can ship lamb anywhere quickly, but for wool we don’t have the processing capacity outside of China.”
Meanwhile, in the lamb and sheep meat markets, Mr Herrmann said good marketing of Australian sheepmeat and lamb has resulted in a broad base for demand.
“Since 2011 when China started ramping up buying sheepmeat, it is now a player in a big market, competing with the US, Middle East, domestic and South East Asia. Having a broad base of markets is key.”
And he said the main thing that is supporting high prices is tight supply.
“The sheep flock is at a 100-year low, New Zealand’s flock has dipped to below 25 million and Australia and New Zealand are the main two sheep meat exporters in the world, so the big challenge ahead is how to feed the demand.”
“Red meat consumption in countries that have a growing GDP is rising and that will continue to fuel demand.”
“There has been a lot of focus in Australia and other developed countries about consumers going away from red meat, but the numbers emerging in developing countries far outweighs the numbers moving away from consuming red meat.”
He said there was no doubt supply would be a challenge, but it was a “real” opportunity for Australian farmers.
“Often with sheep production people talk about them being more work and requiring unique skills, but I’d like to see the industry look at ways to develop skills and appreciation for sheep.”
“I think the sheep industry, to take advantage of this opportunity, needs to look over the fence at the grains and oilseeds industry and really embrace innovation.”
“There needs to be a focus not just on innovations that are obvious but there needs to be creativity in the genetic space, plus the management of sheep.”
Mr Herrmann said it was hard not to be positive about the sheep and wool markets at the moment.
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