Wool markets subject to dollar valueWritten by Saige Albert
Park City, Utah – With growing concern for the immediate future of lamb markets, sheep producers gathering at the West Central States Wool Growers Convention at the beginning of November also looked at wool markets, noting that the future looks stable.
“We had a few hiccups with the shearing season – and we always have a storm, breakdowns or something – but truthfully, we have a market that is working,” said Center of the Nation Wool’s Larry Prager. “We got through the spring season, and I think we are current.”
At the beginning of November, Prager noted that, by and large, the walls of wool storage barns were bare, and the industry is current.
Will Griggs of Utah Wool Marketing also noted that there is no significant backlog of wool in the U.S.
Markets were high at the beginning of November compared to last year, and Prager commented that the currency exchange rate impacts the wool market significantly.
“Wool is one of the most international commodities we can find,” Prager said. “A year ago right now, a dollar’s worth of wool would cost 85 cents in American money equivalents. That number was 70.2 cents at the beginning of November.”
The change of nearly 17 percent has resulted in a continued loss of ground as a result of the stronger dollar.
He commented, “The U.S. dollar looks like it is going to remain strong. I hope it doesn’t gain much strength at this point because it takes a few more dollars off the table.”
“The truth is, the market on a clean basis is similar to where we were a year ago,” Prager continued.
Griggs added, “The better wools traded well, and the short wools didn’t trade so well. Lamb wools were trading on par with what they were a year ago.”
Historically, Prager noted that wool is more expensive compared to other fibers, and today, the industry is well past those averages.
“Wool as a textile fiber is on the high side compared to cotton, synthetics and others,” he said. “That isn’t a new issue, but it is something we have to keep in mind.”
Dan Gutzman of Pendleton noted that outdoor retailers and young people continue to provide an expanding market.
“We are working to get wool into the younger consumer’s hands,” Gutzman said. “We need people to be excited about wool and to look for wool.”
As one example, Pendleton has begun collaborating with Nike to produce custom wool shoes.
“We are in a growth phase,” Gutzman said.
As new consumers come on board, he noted that there are more questions about who producers are, how wool is produced and how it is washed.
“These are all tough questions, but we have to keep our consumers educated so our product is commercially viable,” he said.
Gutzman also mentioned that fashion and clothing trends also dictate where the wool industry will go.
“Knitwear is very popular right now,” he said. “That takes all of the short and tender wools. Right now, hosiery sweaters and outdoor socks are a great place for these types of wools, but fashion is a fickle girl that could change in a minute.”
As a result, preparation of wools will become more important. Gutzman encouraged producers and their shearers to avoid second cuts in the wools.
Cliff Hoopes, who operates a shearing company, noted that there are also challenges for shearers.
“Right now, we are facing challenges just like producers are,” he said. “There are no special procedures in H-2A for the shearing side. They dictate what we can do until we have permits.”
For example, housing is restricted to one-to-one, meaning that each shearer needs their own trailer, which is challenging.
“Another thing is that shearers complain about the size of the sheep. In Australia, they shear smaller sheep and get paid better,” Hoopes explained. “They don’t want to shear sheep for $2.25 when they can stay in Australia and make three dollars on sheep that are half the size. They couldn’t handle our sheep.”
Particularly for older shearers, large sheep can be challenging.
Despite large sheep in the industry, Prager praised producers for providing a consistently high-quality wool product.
“I have to thank the wool growers,” he said. “We have better shearers and better preparation now than when I started in the business, and I think we have better wools. We thank the producers for quality wools because they are the ones who lead the charge.”
Looking forward, Griggs said that volume of wool is down in Australia, which he hopes will create a global shortage.
“As far as the future of the wool market, it will depend on China,” he added. “Domestically we have had really good support, but we do have some that goes over sea.”
Lempriere is building a new mill on line in Bulgaria that will be running in January. In addition, SuperWash machines have allowed increased amounts of wools in the U.S.
“I can’t help but feel a little bit optimistic,” Prager commented. “We’ll have to wait and see.”