Sheepmeat hits records. What about wool?

While the sheepmeat market experiences record prices, the Australian wool market is less robust.

The Eastern Market Indicator (EMI) showed a slight 7% price lift, but it’s nowhere near 2019’s record high of $20/kg. Increased costs from shearing, crutching and labour are likely contributing. 

Data analysis indicates a moderate correlation between sheepmeat prices and wool prices.

This means increasing lamb prices (Merino Lamb Indicator) will not necessarily lead to increasing wool prices (Eastern Market Indicator).  

READ MORE: Producers plan flock reductions. Why?

When analysts examine the meat and wool price relationship, they assess each variable using a correlation coefficient.  

A positive correlation coefficient (r-value) indicates an increase of one variable will see a similar increase in the other variable.

A negative r-value suggests an increase in one variable will see a decrease in the other variable.

Analysis of the EMI and the Merino Lamb Indicator show a moderate positive relationship – likely reflecting that sheepmeat is a by-product of wool production in Merino-based systems. 

The Bottom Line

• National Heavy Lamb Indicator reaches record high.

• Wool saw a modest 7% increase in the Eastern Market Indicator amid rising production costs.

• Data suggests increasing lamb prices will not necessarily lead to increasing wool prices.