Global wool prices concern area sheep producers
Area wool producers are striving to stay optimistic as the market makes irregular jumps, reaching a low in the last few months after remaining higher than average in the last few years. The variables affecting the nation are also having an impact on the global market, causing wool trade to slow substantially even for top producers like Australia and New Zealand.
As shearing and lambing season grow closer, producers are concerned prices won’t rise enough to help them before their wool is to be sold. The most active months are March, April, and May for trading wool, leaving a short time for the market to gain a more positive outlook.
Lisa Surber, PhD, is the Executive Secretary of the South Dakota Sheep Growers Association, who also manages the wool warehouse in Bowman, ND, and operates her own sheep and wool consulting business, LM Livestock Services, which includes anything from classing wool to ultra-sounding. At the Bowman wool warehouse, she’s able to offer a local buying station for producers primarily in North Dakota, but also South Dakota and Montana.
Having studied, researched, and worked at Montana State University, she has a pretty good idea of the variables playing into the market today. She explained that the disagreement between the U.S. and China over tariffs on wool going in and out of the country is just the base factor for the price drops that declined heavily in June, July, and August.
“It grew bigger than just our trade war with China. It created a level of uncertainty in our world market and there just wasn’t any wool moving worldwide. when you don’t have your big players coming to buy prime lots of wool even out of Australia and New Zealand, that’s when things get even more scary. The trade war created a level of uncertainty that we just haven’t seen before.” Surber says there are storehouses of wool all over the world waiting for buyers. Despite this, she said the market isn’t at an all-time bottom.
“Once we get past all the political mumbo-jumbo that’s happening in D.C. right now, we can get back to doing some business and settling problems that are meaningful to ag producers in the middle of the nation. I don’t think there’s cause to be alarmed yet. Fine-wool producers have seen these prices before. We shouldn’t be too concerned yet. If this trend continues into the spring when we get into heavy wool trading in our neck of the woods, that would be a little more cause for concern.”
Jean Tennant is a life-long Harding County, S.D. resident and was raised around sheep, and now raises her own. She and her husband, Gary, had a large herd of both sheep and cattle. Tennant has recently had to cut back her sheep herd because her daughter was injured in a horse accident, slowing her from doing her normal share of the work.
Tennant doesn’t sell wool until late March but is still concerned the market prices will have a negative effect on their operation. “We haven’t sheared or lambed yet, but the prices do affect us because when that’s the projected price, you have to put that into your budget. We have to take what’s offered, so we’re stuck.”
She can’t predict where prices will be when they sell, but she’s looking for positivity. “I’m hoping it will come up and some lines of trade with China will open up again, but whether that will help us this year, I don’t know. Our representatives in Washington must remember that our country is built on farming and ranching, and there won’t be any of us left if they don’t tend to the business of selling our products. Somewhere along the lines someone is making money, and it isn’t us. When you compare what we’re getting to what the product is selling for in the grocery stores, somebody is making the profit, and everyone thinks it’s the rancher. It really isn’t. That must be dealt with nationally.”
Although Surber isn’t sure we’ll see an agreement between the U.S. and China before the 2020 election, she’s a self-proclaimed optimist. “You never know what our current president could get accomplished. We also have to remember that a wool check from even a fine-wool production accounts for very little of their income. As long as we have stable markets on the other side, like a stable lamb market, sheep producers tend to be well-positioned. It’s when both the lamb and wool markets are in the tank, things do get tight. Right now, we have a level of optimism in the sheep industry that a lot of commodities don’t have.”
Surber also explained that the younger generation is recognizing the value of sheep and integrated productions, with both sheep and cattle, because it benefits soil health and grasslands. “If you’re grazing crop residues, sheep work extremely well in those situations.” Research centers have the science to justify these claims.
“Many of our operations in North and South Dakota were bought and paid for with sheep. Montana, as well. We’re seeing more and more value in those mixed operations. When you see one having issues in the market, typically that’s not the case for the other species, so producers don’t necessarily lose on all fronts,” Surber explained.
She was steadfast in believing that local producers shouldn’t be too alarmed yet. “Ag producers tend to be optimists, but also prepare for the worst-case scenario. You almost must be (an optimist) in agriculture and believe that things will get better. In the close of this year’s market in Australia there was a jump that seemed to be a sign of positivity that we haven’t seen in 4-5 months. We’re hoping when the market resumes in 2020 that positivity will continue.”
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