AUSTRALIAN WEEKLY MARKET REPORT

Comment

Further instability on global economic issues has eroded confidence from the wool market that has until now recorded one of the more positive periods in the last few years in our history. Since the peak of the EMI exactly one year ago (16/08/18), the benchmark indicator has fallen 28.5%. In USD terms the peak was in June 2018 and it’s now 33.6% lower. The fall in the EMI this week alone was just under 10%. In comparison our pool of non mulesed types indicates that these wools were again much less affected and closed around 2.9% cheaper on average. 15.0/16.0 micron and the better 17.0/18.5 types were again well supported by a different bench of buyers.

AWEX Eastern Indicator compared with 09/08/2019

Eastern Indicator

Close: 1513

Change in % -9.7%

If you want to learn more about AWEX indicators, visit the official website http://www.awex.com.au

Schneider Indicators

The Schneider Indicators are currently being reviewed to provide index values that will better reflect our evolving business. Details and launch in coming weeks. Our apologies to those who rely on these values for market information.

15 Micron

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16 Micron

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17 Micron

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19 Micron

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Forecast

A fall of this magnitude is significant and must raise further confusion amongst our customers. We can’t underestimate the level of pessimism coming from the Chinese market. This will however, create opportunities for others and considering the correction in price is as great since the peak as we mentioned earlier in this report, this new level of price will encourage some serious considerations. Little has changed fundamentally. We remain very confident for wool as a textile fibre and supply will continue to fall in Australia with the impact of the drought continuing to drive production downwards. Superfine wool clips are coming in earlier than usual and this will impact on supply later this calendar year.

Auction offering – current week

Selling Centres for week 07

Market          Sale          Offered             Sold       Passed In

North                    S 07                      13052                       8548                34.5%

South                   M 07                      15442                       10797              30.1%

West                     F 07                        6929                         3698              46.6%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 08                        T-W                           11194

South                      M 08                       T-W                           22502

West                        F 08                        no sale

 

If you want to see the complete Wool Sales Roster click here.

EASTERN AUSTRALIAN MARKET REPORT

Fine wool firm. Broader merino types easier.

COMMENT

A clear market distinction for non mulesed wool with medium merino types (18.5/20.5) NM up to 5/10% above the general market level depending on quality.

FLEECE

Best 18.5 micron and finer tending slightly dearer with good competition on best specification at the new basis.

Good specification 16.0 / 18.5 firm with keenest interest in the finer end.

All 19.0 /19.5 micron 2% easier and 20.0 / 21.5 micron 3% easier

Tenders and high mid break wool just 1% easier.

SKIRTINGS

1% easier

OPEN TOP

1% easier

NEW ZEALAND MARKET REPORT

Summary

Market softens.

Comment

The market in Christchurch today reflected the downward pressure seen in Australia yesterday.  While there were only a few lots of merino on offer they eased significantly although were not affected as much as the mid micron wools which have seen a large drop in value.

FUHRMANN NZ MARKET REPORT

Summary

Crossbreds generally firm, but average fleece tending easier.  Halfbreds cheaper.

Comment

South Island only selling today with 10,000 bales on offer.  The selection consisted of 30% good colour fleece, 35.0 to 40.0 micron, 20% average colour fleece 35.0 to 40.0 micron, 20% very good style second shear 33.0 to 38.0 micron, bulk 75mm, 10% associated oddments, 10% halfbred fleece, 25.0 to 30.0 micron and 10% miscellaneous types.  Limited competition with China, Europe main and support from the United Kingdom, India and Australasian carpet mills.

Fleece Wools

Good Style firm.

Average style tending buyers favour.

Halfbred Fleece generally 10% cheaper

Second Shears

Good style firm.

Oddments

All descriptions firm.

Passings

33% Passed In.

Next Auction

North Island only selling with 7,200 bales on offer 22nd August.

Fleece Wools Summary

Good Style
Variation %: Firm

Average Style
Variation %: Buyers Favour

Halfbred Fleece
Variation %: 10

Second Shears Summary

Good Style
Variation %: Firm

Oddments

All descriptions
Variation %: Firm

 

EASTERN AUSTRALIAN MARKET REPORT

Another major market correction. A general lack of buyer confidence with little interest coming from overseas clients during these uncertain times.

COMMENT

One third of the offering passed in. All prices down, some better types least affected, especially non mulesed. No doubt at some point in time there will be an over reaction and prices will recover, but confidence must first return.

FLEECE

18.5 micron and finer 3% easier

19.0 / 21.0 micron 5% easier

SKIRTINGS

Best lots 3% easier, others 5% easier.

OPEN TOP

Generally 3 to 5% easier

The use of liquid nitrogen as an alternative to mulesing

On 19 July 2019, the Schneider Group team based in Biella welcomed veterinary John Steinfort to learn first hand about his new method using liquid nitrogen as an alternative to mulesing. Mr. Steinfort is the inventor and promoter of the new sheep welfare process called ‘Sheep Freeze Brand’. We used the opportunity to speak with Mr. Steinfort directly to better understand the benefits of sheep freeze branding and answer the questions the wool supply chain has concerning the new method.

Why is Sheep Freeze Brand relevant to the wool industry?

With increasing consumer interest in animal welfare, many fashion brands and retailers have adjusted their sourcing requirements accordingly. This has led to a higher demand for mulesing-free wool exceeding the availability, especially for Australian non-mulesed wool. The Australian wool industry is working intensively on fading out the need to mules sheep through extensive breeding programmes. As these genetic programmes take time, it is important to develop other animal welfare solutions to ensure good welfare for sheep. Liquid nitrogen is one of these important developments.

What is the liquid nitrogen sheep breech method?

The method using liquid nitrogen called Sheep Freeze Brand, is a welfare improved alternative to mulesing. The goal of sheep freeze brand is similar to mulesing where excess skin at the rear of the sheep needs to be removed in order to prevent flystrike. Sheep freeze brand is performed through stapling the excess skin on the back of the sheep using an applicator and performing a cryogenic treatment in the affected area using liquid nitrogen. The freezing of that tissue lasts a few seconds and deactivates all nerve cells within the skin area. This ensures that the animal does not suffer in any way. The wrinkles present in the treated area are naturally absorbed without any discomfort to the animal.

Who developed the liquid nitrogen method?

Sheep freeze brand was developed by veterinary John Steinfort. Mr. Steinfort developed the concept of Sheep Freeze Brand (SFB) in 2008, imitating the freeze branding on racehorses and cattle. The process has been constantly tested and evolved and is now ready for commercial use.

Is the use of liquid nitrogen less painful than mulesing?

The sheep freeze brand procedure takes about 8 seconds – 4 applications of 2 seconds each. The procedure is very fast, so the animal will feel discomfort for about 4 seconds (one second for each application). The pain can be compared to a short stinging similar to when a wart on a finger or toe is removed with liquid nitrogen after which the skin then feels numb. In 2018, the method has been already tested on 25.000 lambs, followed by further applications in 2019. Compared to mulesing, growers observed a faster recovery of the lambs after the procedure by showing normal behaviour.

Are there more benefits of sheep freeze brand?

Trials to date have shown the faster growth rate of the lambs. The lambs under the sheep freeze brand trial have shown the post-procedure weight of the lambs improved at the same rate compared to lambs which were not mulesed. This indicates that the lamb was not under any stress or pain during the procedure. Under a standard mules (without pain relief) lambs have always initially had a weight set back due to the pain.

There is also an environmental benefit over a standard non-mulesed (NM) sheep. NM sheep remain at risk of flystrike and growers can face the necessity to use more chemical on the sheep to fight the fly. This is costly to the grower but also has a negative impact on the environment.

Finally, with the wool removed from around the breach, it can be expected that the wool quality will improve by reducing the risk of stain or coloured fibre entering into the wool clip. Less wool around the breach means less stain in the wool.

When is the liquid nitrogen method carried out?

The best time to carry out the practice is when the animal is still a lamb, in conjunction with the procedure of tail docking and castration. In addition, the procedure can make tail docking no longer necessary.

What are the costs of the liquid nitrogen method?

The process of sheep freeze brand costs $AUS 5 per lamb which is a much higher cost for growers compared to $AUS 1.20 for mulesing. However, trials have shown in the past, that lambs who have been sheep freeze branded grow on average 9% more wool compared to mulesed lambs. In addition, sheep freeze branded wool can be declared as non-mulesed or ceased mulesed and therefore may obtain a premium at auction.

How is sheep freeze branded wool being declared in the catalogue?

The Australian Wool Exchange (AWEX) has defined that wool originating from sheep who have been sheep freeze branded can be declared as non-mulesed (NM) or ceased mulesed (CM). This is based on the fact that no surgical cut is being made during the sheep freeze brand procedure.

Has the liquid nitrogen method been included in animal welfare standards?

As the procedure has only been released to the market recently, animal welfare standards such as RWS and ZQ have not yet recognised the process within their standard. Dr. Steinford and his team will seek further discussions with the standard holders to ensure well-informed decision can be made on whether or not to accept the method as a good welfare practice.
At the same time, there might also be concerns expressed by other wool growing countries who have benefitted from being mulesing-free.

Is pain relief needed for the procedure?

The pain caused by the liquid nitrogen method is not excessive. Experts and wool growers involved in the trials came to the conclusion that pain relief was not needed. However, further research is being undertaken to also test the method in conjunction with pain relief.

How is the market accepting the new method?

Large wool industry organisations such as the Australian Wool Innovation (AWI), Australian Wool Exchange (AWEX) and the International Wool Textile Organisation (IWTO) have accepted the method as a good alternative to mulesing and mulesing with pain relief to ensure good sheep welfare. In addition, the animal welfare association Four Paws has approved the sheep freeze brand method as well.
Brands and retailers who have their own animal welfare requirements are encouraged to study the new method and to read up on the available research. This will help to make an informed purchasing decision on whether or not to allow the sourcing of wool originating from sheep freeze branded lambs.

We hope you found this overview of the liquid nitrogen method useful. If you have any further questions, please feel free to contact us. We will be happy to help.

 

Image source: Chantel McAllister

AUSTRALIAN WEEKLY MARKET REPORT

Comment

The global financial and trade situation is causing enormous uncertainty across all markets and wool has not been immune from this global economic story. Our reliance on China is well known. Chinese trade activity has certainly been affected and the major wool buyers were notably absent this week. There did seem to be a little more interest late in the sale Thursday but this didn’t ease the negative sentiment that had dominated the opening sale. 16.0 micron was least affected and even closed fully firm yesterday. It was the standard Chinese types 19.0 to 21.5 micron that lacked the usual competition. 29% of the total national offering was passed in.

AWEX Eastern Indicator compared with 12/07/2019

Eastern Indicator

Close: 1676

Change in % -4.45%

If you want to learn more about AWEX indicators, visit the official website http://www.awex.com.au

Schneider Indicators

The Schneider Indicators are currently being reviewed to provide index values that will better reflect our evolving business. Details and launch in coming weeks. Our apologies to those who rely on these values for market information.

15 Micron

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16 Micron

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17 Micron

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Forecast

Very few are able to comment on the non mulesed market like we can. G Schneider Australia tends to dominate the offering of NM certified wool from 18.5 to 20.5 micron. This week our prices for NM wool around 19.0 /20.0 micron were only 2% down on the previous sale in July. This compares with an AWEX MPG value for 19.0 micron which was closer to 6% down. Clearly NM wool is selling in a different market and attracting a wider range of buyer interest who are influenced by longer term delivery and supply chain relationships.

Auction offering – current week

Selling Centres for week 07

Market          Sale          Offered             Sold       Passed In

North                    S 07                      13059                       10490              19.7%

South                   M 07                      21125                        15726               25.6%

West                     F 07                        7359                          3425                53.5%

Auction offering – next week

Market          Sale          Sale days          Volume

North                      S 08                        W-T                          13984

South                      M 08                       W-T                          21231

West                        F 08                        W-T                           8388

 

If you want to see the complete Wool Sales Roster click here.

EASTERN AUSTRALIAN MARKET REPORT

Lack of general competition results in a high passed in rate.

COMMENT

More than 1/3rd of the fleece wool was passed in between the two centres but as much as 46% of the fleece in Melbourne failed to meet grower expectations. These were generally the lower yielding, drought affected types.

FLEECE

16.0 micron was a bright spot in the market, generally unchanged.

Better specification 16.5/18.5 micron up to 1% easier only.

All other descriptions 2% easier.

SKIRTINGS

16.5 micron and finer 1% easier.

17.0 / 18.5 micron 2% easier.

OPEN TOP

Generally 1 to 2% easier

EASTERN AUSTRALIAN MARKET REPORT

The wool market opened cautiously amidst general global economical concerns. The AUD is at a 10 year low against the USD.

COMMENT

Major Chinese buyers were quiet.

FLEECE

Best types 17.0 / 18.0 micron par to 1% easier (Italian specification)

All others 18.5 micron and finer 2% easier.

19.0 / 21.5 micron 3% easier.

SKIRTINGS

2% easier

OPEN TOP

2% easier