The national wool offering was boosted marginally by 600 bales, with a total of 50,603 bales listed, not quite reaching the 53,000 bales predicted in the previous week. The AWEX Eastern Market Indicator dropped this week by 22c on Tuesday, 9c on Wednesday and a further 1c on Thursday to close out the selling week at 1,277c/kg greasy, or 1,000c in US dollar terms.
The supply of sheep and lambs offered exclusively on AuctionsPlus for the month of February totalled 411,733 head - a significant increase on January, which had 277,546 head listed. February weekly markets were significantly more consistent than the holiday interrupted January, which provided a clear indication of the true market - where rebuilding intentions remains the primary driver of strong prices and throughput.
National wool listings were boosted this week by the traditional February feature Tasmanian offering which went under the hammer at the Melbourne selling centre, totalling 53,261 bales offered for the week. The AWEX Eastern Market Indicator dropped 11c on Tuesday and a further 1c on Wednesday to close out the selling week at 1273c/kg, or 985c in US dollar terms.
When drought conditions started to ease across the eastern seaboard in early 2020, it spurred extensive cattle movement, as producers in the east looked as far as Western Australia to rebuild their herds after consecutive years of drought.
The Australian Merino has long been bred for the range of income opportunities it presents to farmers, with the divergent paths for wool prices and livestock prices in 2020 bringing this into sharp focus. While not unfamiliar to volatility, the onset of the Covid-19 pandemic and associated economic uncertainty contributed to the wool market slumping to its lowest levels since October 2012. Highlighting their versatility, while wool retreated, the demand for Merinos stayed strong with improved seasonal conditions and fierce restocker demand underpinning historically high sheep prices.
Spring has arrived and with a wetter than average season predicted across the eastern seaboard, there is no doubt farmers will have new season lambs to sell, likely with much more weight than this time last year. Farmers are left with the decision to either sell earlier, aiming for 16 – 20kg dressed weight (DW), or retain on farm and fatten to reach prime trade weights of 20 – 24kg DW. There are several factors to consider when making this decision, however the underlying driver is profit. In making these decisions, producers should look to assess the costs of retaining lambs in comparison to cashing in earlier.
Despite the current COVID-19 pandemic, the Agricultural industry, deemed an essential service, has seen operations continue largely uninterrupted, with interstate livestock movement given the green light to persist. Many producers who experienced the Summer or Autumn breaks were able to capitalise on optimistic markets and secure stock from interstate. One region taking advantage of the sanction is Tasmania with both species regularly crossing the Bass Strait.