SASKATOON — Wool prices are slowly and steadily making a comeback.
Producers of domestic grades of wool in Canada can get an initial price of 40 cents per pound for coarse wool and 60-70 cents per lb. for the finer wool.
That’s a far cry from prices in the past three years. Sellers received about 25-30 cents total for their domestic grade wool and 50-70 cents for finer wools.
Eric Bjergsco, general manager of the Canadian Co-operative Wool Growers in Ottawa, said sheep farmers could get as much as 50-60 cents per lb. for coarse wool and upwards of $1 per lb. for their finer wools.
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“Prices have really started to climb out of the pit,” he said. “I’d say the outlook looks pretty good.”
At a total annual production of just 2.5 million pounds (1.14 million kg), Canada is a hobby farmer compared to the dominant wool producers of the world — Australia, South Africa and Argentina.
Meat not wool
But Canadian sheep are bred for meat, not wool. Farmers that raise Rambouillets or other dual purpose breeds would get about 20 percent of their income from wool, Bjergsco estimates. For those raising meat breeds, the year’s wool clip would make up between five and 10 percent of a producer’s income.
Total world production of clean wool is forecast at 1,576 million kilograms (3.5 billion pounds.) Australia alone will produce half of the world’s clip of wool this year.
But production in other key countries, including the former Soviet Union, South Africa and Argentina is off by as much as 30 percent.
Flocks will be sold
And in the United States, elimination of a subsidy for wool production and increased grazing fees on public lands means the federal department of agriculture has forecast American producers will sell 20 percent of their flocks this year.
Sheep numbers worldwide have fallen from a peak of 174 million head in 1989 to 128 million in 1993. The Canadian flock, in contrast, is forecast to grow by 20 percent this year.
World demand for wool this year is forecast to outstrip production by nearly 10 percent. Japan, China and western Europe will be key buyers.
Consequently, Australia’s 3.8-million-bale stockpile of wool (about 1.5 billion pounds) will be sold sooner than anticipated, said Bjergsco.
All of those factors add up to better prices.
Bjergsco said the Canada co-operative has marketed all of the 1993 wool clip and is forward selling the 1994 clip to the United Kingdom, Germany, France and the United States.
A trial sale in India, a new market, was recently completed.
