The wool industry has the habit of stewing in a state of angst over its lost position as a major fibre. This has arguably been going on since the Middle Ages, certainly since the 18th century when Indian cotton began to be imported into Europe, so perhaps it is time to accept the present, look forward and get on with it. This article looks at change in the Australian wool clip during the past three decades.
It is not hard to find articles concerning the falling market share of wool from the past century. David Buck presented some fascinating fibre market share graphs to the IWTO in 2001 (Link available here: refer page 10 in the link) showing the wool and linen fibre share (he titled the graphs World Demand but it is better thought as European Demand) falling from 1700 as cotton’s share rose from near zero to over 70% by the early 20th century. In the 20th century synthetic fibres (beginning with cellulosic fibres and then switching oil based fibres) rose from effectively zero to 60%. The graphic shows that the trends in fibre share are long term structural changes, which have been going on for centuries.
To zero into a more recent timeframe, looking at the change in the Australian wool clip over the past thirty years, Figure 1 shows the change in fibre diameter distribution using AWTA data for all breeds. The graphic compares the distribution for the 1995-96 season to the current season. 30 years ago the 21 micron category was the clear mode, main category, with 22 micron the second largest category. Now the main categories are 18 and 19 micron, with 16 micron larger than 21 micron. As to be expected the crossbred categories have picked up share, as the flock rebalanced from a strong merino focus which peaked in the late 1980s/early 1990s.
The change shown in Figure 1 has not stopped. Figure 2 shows the change in share by micron category, again using AWTA volumes, for the past decade. The drive to reduce broad merino volumes continues as does the move to finer merino micron categories. Changes in crossbred micron category shares are varied. A question that is asked for merino is whether there is a “sweet spot” for production – the optimal micron category. The David Buck graphs and Figure 2 both show that change is a constant factor in the wool market, indeed in fibre markets, which implies what was the optimal micron category to produce a decade ago has probably changed, and will change again.
The last graphic, Figure 3, shows the change in the Australian wool clip for the past 30 years in absolute terms (farm bales). This is interesting in that it shows crossbred volumes have been relatively steady, as has 19 micron. 18 micron and finer volumes have increased, with the fine end of the merino distribution growing from an artisan level volume to a genuine industrial level. The outstanding change, though, is the decline in the 20 to 25-26 micron category volumes with 21 to 24 micron category volumes falling by 90-95%. These categories, which are in closer competition with cotton and synthetic fibres, finally lost the battle and left the industry.
What does it mean?
As Daniel Kanheman showed in “Thinking, Fast and Slow” humans have a strong aversion to loss and this seems to play out with the wool industry where market share and prestige have been falling for centuries and in recent decades. It clouds the thinking around the industry. Given the past is our best guide to the future, more change is on the way for wool. For wool producers this means what seems to be the “sweet spot” for production now, is probably going to change and we should plan for that.
Key Points
- Change has been a constant feature in fibre markets for centuries
- Change continues in the Australian wool clip
- There is no permanent “sweet spot” for wool production due to constant change
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: David Buck – IWTO, AWTA, ICS, Mecardo
