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Superfine survival
22 Jun 2004
Managing the volatility in wool prices holds the key to improving the bottom-line performance of superfine Merino enterprises, producers have been told at a Goulburn seminar. Growers also heard that while the present fragile recovery in wool prices appears set to continue, volatility will continue to plague the market. The aim of smart producers should be to use that volatility to advantage by locking in attractive prices when opportunities arise periodically, rather than enduring it at the same time each year.
The seminar attracted 130 superfine producers from the Southern and Central Tablelands and Victoria. They were interested in wool price levels, which for 17-18 micron types have fallen by about $2 a kilogram in a year. Growers' concerns were borne out by figures produced by Hassall and Associates, Dubbo, which show that while a self-replacing 16 micron ultrafine Merino enterprise at present prices would return a profit of $340 a hectare - or just $10 below a 21 micron flock - a more mainstream 18 micron superfine flock was well down, at $290/ha.
But when average prices over five years are taken into account, the 18 micron enterprise comes in at $370/ha - well ahead of all other sheep enterprises except 16 micron Merinos, and also better than beef cattle or crops.
The Land, 22/6/04.
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