With the combination of high wool prices, high sheep meat prices and a rebound in skin prices, interest in calculating the best value pathway (shear or sell in the wool) when selling sheep has increased. This article takes a look at the effect of staple length on the value of merino fleece.
While fibre diameter is the main determinant of wool price, within micron categories staple length can be a big determinant of price, especially when dividing between carding and combing types (around 50 mm) (As seen in the research paper available here). The combination of other quality factors (wool category, staple strength, mid-point break, vegetable fault) with staple length ultimately determines price, further complicated now by quality system accreditation. Figure 1 shows average prices by micron for the past year for selected merino fleece staple lengths along with crutchings and locks, from 15 to 22 micron by half micron intervals. The graphic illustrates how fibre diameter influences price across all lengths, and within each micron category, staple length has a big influence on price.
Figure 2 looks at the 18.5 micron category (around the average for Australian merino fleece) and the effect of staple length on price for June to date and for the past 12 months. All else being equal there is effectively no difference in price for 70 to 95 mm length fleece. As staple length falls below 70 mm the discounts begin, although they are quite small until the staple length falls below 60 mm. When the staple length falls below 50 mm there is a step up in discounts, book ended by locks having the shortest length and largest discount. If you have merino sheep to sell, it is worth doing some back of the envelope numbers (easily supplied by your wool broker) to check on the best course of action as discounts for staple length down to 60 mm are small at present.
As mentioned above it is staple length combined with other quality factors which drive wool prices. Figure 3 shows a weekly series for 17.5 micron 61-65 mm length fleece discount to 90 mm from 2001 to last week. 25 years ago the discount was appreciably larger. Since that time discounts for short staple length and low staple strength have generally shrunk in the greasy wool market. Still in the past decade the discount has varied between 2% and 10%.
Figure 4 repeats the format of Figure 3, for a shorter (56-60 mm) length fleece. The discounts are larger as a consequence. The same story of smaller discounts over time is even clearer. After 2002 the discounts halved, and then after 2011 they look to halve again (albeit with some volatility).
What does it mean?
The 1000 cents rise in merino wool prices this season, combined with small discounts for wool with a staple length in the 60-70 mm range means that some sale sheep are carrying high value fleeces, which might surprise if we are still using price levels from recent seasons as a rough guide in our minds.
Key Points
- High wool prices and relatively minimal discounts for some of the shorter combing lengths make checking the value of wool on sale sheep potentially worthwhile at present
- While reduced over time, the lower discounts still vary.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: AWEX, Emerging Textiles, IWTO, RBA, ICS , Mecardo
