Welcome to our 2020 Newsletter
What a year of contradictions, for much of the east the weather has finally changed, sheep prices are exceptional in particular for restocker types while on the other side because of the Corvid 19 pandemic we have a completely new world which could be here for a while.
The virus has completely stagnated consumer demand all over the world no more so than for finished merino products. It is well known that wool prices are very dependent on a buoyant and growing world economy as it is a luxury item with demand-based around the affluent middle classes in Europe, America, and Asia.
There is lots of talk around the industry with retailers doing it tough and either canceling or reducing orders remembering any stock held at present are expensive in terms of where the raw wool prices sit today. Stories out of China include that demand has fallen off a cliff and consumers are using cash for essentials only.
We remain extremely bullish for the future of our natural fibre and believe that this new world we live in will only accelerate the changing mindset of consumers all over the world wanting a natural product which is of the highest quality, is renewable, biodegradable, traceable, ethical, and sustainable.
As a part of this narrative Australia’s ewe numbers due to the drought are at record low numbers to the point where we could risk falling back into a cottage industry. The wool market relies on quantities moving through the pipeline and if our customers can not source wool when they need it this could cause more volatility in the industry with processors and brands looking elsewhere.
My point – we need ewes that are fertile and can rebuild the national flock sustainability for the long term and traditional Merinos can not do this, wrinkle is a genetic fault that more than anything else makes it inefficient especially when it comes to number of lambs weaned.
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