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Wool Prices May Finally Start Seeing The Light

“I think we’ve hit the bottom and will see a growth mode going forward.”

– ERIC BJERGSO, CCWG

Wool prices may finally be starting to recover after collapsing two years ago because of the global recession.

The world wool market recorded “positive gains” in the first quarter of 2010 after gradually stabilizing in the second half of 2009, says Eric Bjergso, general manager of the Canadian Co-operative Wool Growers Limited.

Economic recovery in China and India, the world’s major wool markets, is driving an improved demand for wool, Bjergso reported to the CCWG’s recent annual meeting in Carlton Place, Ontario.

Strong lamb prices are also helping to pull up wool prices in their wake, he added.

With lamb prices soaring and wool prices slowly getting better, Canada’s sheep industry can expect better times ahead, Bjergso said following the co-op’s annual meeting.

“To me, actually, the future looks very optimistic for the sheep industry,” he said.

“I think we’ve hit the bottom and will see a growth mode going forward.”

Wool prices in Canada currently range from 30 to 40 cents a pound for coarser wool from meat breeds. Finer wools from wool breeds run between 80 cents to $1.40 per pound. Approximately 90 per cent of the sheep in Canada are meat breeds, said Bjergso.

World wool prices plunged by 70 per cent in 2008 due to the global financial crisis. Bjergso said wool is very sensitive to world financial markets because textiles perform better when economies expand.

Although demand is improving in China and India, current economic problems in Europe are depressing sales in what is also a major market.

On the positive side, world wool stocks, which 20 years ago stood at five million bales, have been used up, said Bjergso.

“Today there’s no wool surplus anywhere in the world,” he said. “There really isn’t any stockpile anywhere. Whatever comes into the marketplace is sold.”

Canada exports between 80 and 90 per cent of its wool clip, with CCWG one of the largest buyers. The co-op, in existence since 1918, has a network of strategically

located collection points. Producers deliver wool to depots, which goes to Lethbridge, Alberta for compressing and baling, then to the co-op’s head office at Carlton Place for processing.

Manitoba has seven depots in Stonewall, McCreary, Ste. Claude, Miniota, Brandon, Pansy and Arborg.

Some Manitoba producers don’t even bother to deliver wool because they don’t feel it worthwhile, considering the low prices. Instead, they burn it, said Lucien Lesage, a sheep farmer from Notre Dame.

One sheep produces seven to 12 pounds of wool per clip. A shearer charges between $3 and $4.50 an animal. At that rate, the return from wool doesn’t even cover the cost of shearing, said Lesage, who chairs the Manitoba Sheep Federation.

Some producers raise sheep strictly for wool. Randy Eros and Solange Dusablon do so at Seine River Shepherds near Ste. Anne. They take washed, carded wool, felt it into sheets and cut it to make garments, which they sell.

But they’re “an absolute anomaly” among sheep producers who mostly sell lambs for meat, Eros said.

Raising sheep for wool is “a whole different skill set, quite frankly,” he said.

But Eros said burning wool because it’s low value and more work to deliver is not a good practice.

“It’s an income generator. Maybe not a lot but you wouldn’t go out and burn bales if you could sell them. We have a ready market for it.” [email protected]

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