Wool surpasses record quality and price in 2018, marking historic event

Casper – “I think the wool guys have the best story in agriculture,” says Larry Prager of Center of the Nation Wool. “We were fortunate, in 2018, we had winter. It was cold. On Feb. 21, it was 22 below zero. We had snow. I’m not sure what the purpose of that was, but it made for a good wool clip.” 

On Jan. 1, Center of the Nation Wool started with an empty warehouse. Starting mid-spring, sheep shearers began the shearing season in snowbanks, in the high desert and across the West. 

“Early on in 2018, it was apparent to me it was going to be a special year for wool quality across the region,” Prager emphasizes. “We had, for whatever reason, better color, record yields, and great length. Environmentally, it was just one of those years.” 

As the shearing season progressed, he continues, “In 2018, we had one of the best wool clips in the history of the United States, maybe the best one ever, and we had the market to go with it, just as wool came in.” 

Beginning in November 2017, every month following was better than the month before. Record prices in January were only exceeded by the following months. 

“Every month, I thought, ‘This can’t last,’ so we tried to stay as current as we could, and I think the industry did that,” Prager says.

Center of the Nation Wool paid up to $4.87 per pound grease price for wool, with the largest wool check surpassing $229,000. With 100 percent clearance, the company saw record prices nearly across the board. 

“The average price at Belle Fourche, S.D., was $3.01, which includes tags, bellies, black faces, short, long, good ones and not so good ones,” Prager comments. “In 2017, that same number was $2.06. It’s pretty remarkable.”  

Wool products

Approximately half of the wool in the United States will be exported annually, according to Prager, because of the limited ability of the U.S. to comb and make tops. 

“This puts us in an interesting part of the business around the world,” Prager adds.

One source of negativity in the market is in Chinese trade, which impacts the wool industry.

“We have a tariff issue for wool in China,” Prager adds. “A lot of U.S. wool goes into China. A duty of 10 percent is a trade barrier. No one has these margins.”

He continues, “I think these tariff and trade issues are going to stick with us.” 

Great Plains Wool Company’s Bruce Barker sees possibility for shipment of wool to other places, like India and Vietnam, who also have processing capacity. 

Innovation

Prager sees growth for the wool industry in the Super Wash process, which allows wools to be machine-washable and consumer friendly. 

“When they first started using Super Wash, we heard it was a million-dollar process. We are so fortunate that it is set up in Jamestown, South Carolina,” he emphasizes. “To get things made in the United States, get those yarns processed and get Super Washed yarn for the knitting industry is going to be a bigger deal than ever.”
Prager adds, “This is a key component today.” 

Markets

In the last three years, the Eastern Market Indicator, an index value coming out of Australia, peaked at 216 in August. 

Prager says, “The last month, it’s been in the tank. Wool is still a good story, but we’re coming off the last of the highs.”

While wool prices are still generally high, he notes the end of the record prices has passed. 

“A dollar of Australian wool was worth about 73 cents in U.S. money on Nov. 8,” he explains. “This is not good when we’re exporting wool.”

However, Prager sees good news on the horizon, with strong global economies, sound market fundamentals and positive consumer opinion about wool.

“Every place we look, there is something wool in a catalog. Wool is everywhere,” he emphasizes. “The consumer demand for wool fiber is strong. Super Wash is the key component.” 

He also cites fine-gauge knitwear, socks, sweaters and base layers as the driving force for the wool industry. These products are readily available and abundant, adds Prager. 

“Demand is at least steady and supplies of wool still remain limited around the world,” he comments. 

Moving forward

However, momentum in the wool market has collapsed. 

By mid-November, the market was off approximately 15 percent, and the Australian market was up about six percent on drought conditions. 

“We’re seeing inferior types of wool coming into the market that we’re not used to. The industry is resisting those,” Prager comments. “Wool is also very expensive compared to synthetics. We are seeing substitution in wool, putting different blends up, including polyester as a substitute fiber.”

With sheep numbers increasing slightly and continued strength in demand for wool products, Prager sees some strength in the industry. 

Barker adds, “We’re still a dollar a pound over where we were in 2017. I think next year we’ll be about in the same price range as we are today for the 21- to 22-micron wools.”

But overall, the picture is mixed. 

“Confusion and uncertainty,” Prager comments, “that’s the bottom line.”

Prager addressed the West Central States Wool Growers Convention, a gathering of sheep producers from California, Colorado, Idaho, Nevada and Wyoming, on Nov. 9.

Saige Albert is managing editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.