The wool supply chain operates on averages for expected production in terms of quality. Quality varies through the season normally, with staple strength and vegetable matter being stand-out examples. Due to wool being grown in a biological system, quality occasionally varies from the average, and therefore the expected price usually reacts. This seems to be happening to staple strength in eastern Australia.
The south-eastern sheep regions in Australia (Riverina in NSW, Victoria, southern South Australia, and Tasmania) have experienced dry conditions in recent years, with rainfall coming in mid-2025. The expectation of such a swing from dry conditions to pastures with green feed in mid-2025 was lower staple strength in the middle of the staple towards the end of 2025.
Figure 1 shows the monthly average staple strength (all staple measured wool sold) for eastern Australia from mid-2000 onwards (25 years), as well as a rolling five-year median level for each month. The rolling five-year median is used as the proxy “normal” level and doubles as a guide to the seasonal pattern. Staple strength has varied widely since 2000, dipping to low levels in the 2006–2008 period of drought, as it did in 2019. In recent seasons, it has spent a lot of time at high levels. (Note that this is a wide average. It is possible to have groups of micron categories with varying staple strength levels due to the regions they come from.) The October average staple strength had fallen as expected for this time of the season and also due to the mid-2025 conditions mentioned above, but remained at quite good levels. The early November staple strength (we have only one week of sales recorded as yet) shows levels to be plummeting, well below the norm of recent years.
Figure 2 looks at staple strength discounts for 18-micron sub-24 N/ktx fleece compared to indicator style fleece prices from mid-2000 onwards. Staple strength discounts have narrowed from the wide levels of 25 years ago. However, they still vary between 5% and 15%, and for the past couple of years have spent most of the time around the 5% level. The good news is a weak correlation between the average staple strength level and discounts. The bad news is that wool processing values wool producing a shorter top with more waste and a wider range of fibre length in the top (the typical outcome from lower staple strength, which is usually accompanied by higher levels of mid-point break) less, hence the discount. (see more here)
If the early November staple strength is a guide, then staple strength is going to be a problem in the coming months, and discounts are likely to move from the narrow side to the wider side of where they have ranged in the past 10–15 years.
To give an idea of what this might mean, Table 1 provides a percentile breakdown of low staple strength discounts by half micron (15.5 to 20 micron) for the past 15 years. It shows the current week (the first sale week of November) to have discounts slightly above median. If the supply of low staple strength increases, then it is likely the discounts will work their way towards the lower percentile levels.
What does it mean?
As mentioned in the article the staple strength shown is an average of all wool tested, so some micron groups may escape the worst of this because of where they are grown (such as broader merino wool from pastoral regions in eastern Australia). Basically it appears from most merino wool where discounts for low staple strength may have oscillated around 5% in recent years, in the coming 3-6 months they are more likely to oscillate around 15%. On the flip side, wool with high staple strength will receive increased premiums.
Key Points
- Staple strength had been expected to fall in late 2025 along seasonal pattern levels.
- Early November sales data shows staple strength in eastern Australia falling to levels last seen in 2010.
- Increased discounts seem likely as the supply change works to cope with much lower staple strength levels than is normal.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: AWEX, ICS Mecardo
