By Matt Reese
During the decades of dismal wool prices, Ohio shepherds have largely focused on meat production, but that dynamic has been changing recently. Higher wool prices mean more potential for extra income and greater penalties for not managing for a clean wool clip.
“Prices have risen over the past couple of years, strictly on the back of short supply. We’ve had low world numbers on sheep and low world numbers in wool. Also, the cotton market exploded a couple of years ago and went to all time highs, which made wool more competitive in the world market,” said Dave Rowe, General Manager for Mid-States Wool Growers Cooperative Association based in Fairfield County. “Last May was the recent high price for wool. The fine wools have come down maybe $1 and the medium type wools we have around here are down maybe 20 or 25 cents from where we were at last year, but the prices are still good. As we look forward in 2012, prices are giving the indication that they should be good. While we may not see the price levels of 2011, the continued shortage of sheep numbers and wool volume should add support under the market.”
A number of negative factors are contributing to the wool prices in the last year.
“We watch the strength of the U.S. dollar compared to the Australian currency,” Rowe said. “When he U.S. dollar is weak, it makes American wool a better buy. Lately, we’ve seen the dollar strengthening, in part due to the turmoil in Europe.”
The economic trouble in Europe is also hurting wool demand.
“We are seeing more issues in the European economies that are a big customer base for wool,” he said. “That has made some exporters very nervous about what the prices are going to do.”
Australia dominates the world wool market and, consequently, the factors setting the prices.
“Australia is ahead of everybody on wool. Their climate is arid and Merinos work well for them, so they have the best wool. The color, strength and fineness of Australian wool can’t really be duplicated. Their sheep numbers are up but their wool clip is not because they are shifting breeds to more meat,” Rowe said.