Wool growers sell at Melbourne this week amid ‘extraordinary’ price shift

Wool prices have surged 20 per cent in two weeks to reach a three-year high, prompting growers to sell bales they've held onto for years.

Wool prices remain on the rise this week after “extraordinary” market growth, as growers plan to sell long-held bales.

Australia’s wool market has exceeded expectations this week, with the eastern market indicator reaching 1565c/kg, up seven per cent or 112c/kg this week. Only 1.9 per cent of offered bales were passed in.

Kerrsville Poll Merino stud principal Robert Plush sold 100 bales at Melbourne’s wool selling facility on Wednesday, out of 32,720 offered nationally this week. It comes amid sharp increases across all wool types during the past two weeks, reaching a three-year high.

Ultrafine wool had the largest increase, with 17 micron wool lifting 205c/kg to 2283c/kg.

Mr Plush produces ultrafine Merino wool and manages 1000 stud ewes and 6000 commercial breeding ewes at Coleraine.

“We’re purely grazing. We’re really appreciating the markets going up,” Mr Plush said.

“I’ve been bullish about the wool market for a long time, a lot of people are saying I’m stupid but this is what we like so we try to do it as well as we can.”

Elders Hamilton district wool manager David Whyte and woolgrower Robert Plush. Picture: Rachel Simmonds

He said he focused on ultra superfine wool, but started analysing carcass traits as well.

“Merino itself has changed what it used to be,” Mr Plush said.

“There’s a meat component now that never used to be spoken about and fertility wasn’t something people sought for.”

He said their lambing percentage sat at about 90 per cent and his sheep were generally heavier with a better food conversion rate, and a focus on eye muscle area and fat percentage.

This year had been “way better” for rain, but there was minimal soil moisture for his sandy loam paddocks and no groundwater.

Mr Plush said fodder had been one of the major costs, as well as labour, insurance, council rates, electricity and fuel.

Flynn mixed farmers Geoff and Meg Derham with Elders Bairnsdale woolbroker Maddie Gallagher. Picture: Rachel Simmonds

Meanwhile, Flynn mixed farmer Geoff Derham manages 80 Hereford breeders and about 300 breeding ewes for a commercial lamb operation.

He held onto his 37 wool bales for four years before he decided to sell, and would put his lambs to market within the next two weeks.

He said his wool sold for 30c/kg more than expected with a 27.5 micron and 73 per cent yield.

“We’ve had sheep now for maybe 15 years and the sheep have made more money for us than the cattle,” he said.

“(Wool) prices have just gone up and up.”

Elders state wool manager Lachie Brown said the industry was in a supply-driven market with volatility, but there had been “green shoots” out of China and Europe.

He said there had been reduced supply for the past two years, but retailers and processors had been more unwilling to take on inventory due to consumer demand. He cited a momentum shift across all wool types.

“It’s extraordinary,” he said. “We’re up nearly 20 per cent over two weeks across most types. It’s the sharpest lift we’ve seen in a long, long time.

“The pipeline is very much empty at the moment, there’s not a lot of stock to draw on.”