NZ wool auction volumes likely to drop 4.4% this season

New Zealand will have less wool changing hands at auction this year as the sheep flock declines and some areas are hit by drought.

The country is expected to have 459,000 wool bales pass through auction in the 2015/16 season, down from an earlier estimate of 461,000 bales as South Island farmers reduce stock numbers to cope with dry weather, according to the wool auction roster committee which met last week to estimate supply for the second half of the season. The latest estimate is 4.4%  down from the 480,000 bales in the 2014/15 season. About half of the country's clip is estimated to pass through the auction system.

New Zealand's national wool clip is declining as sheep numbers fall to the lowest levels in more than 70 years as farmers chase higher returns by converting to dairy, or focus more on meat producing sheep breeds. This season's decline in the wool clip could have been more severe, had it not been for recent rain which aided pasture growth.

"We rostered less this season than we did last season anticipating less wool and, basically, they have just about got it on the nail," said New Zealand Wool Services International executive Malcolm Ching, who is on the roster committee. "The only thing that always happens is you have the seasonality effect of drought or incredibly bad weather that knocks over a helluva lot of animals."

Farmers who had de-stocked in the Canterbury area earlier in the season in anticipation of dry El Nino weather were now trying to add more lambs "because they have got grass coming out of their ears" following recent rain, he said. Meanwhile, farmers in the North Island had experienced one of their better growing seasons, he said.

"The de-stocking and the less animals has been balanced out by probably very good growing overall that wasn't necessarily anticipated so, even though we are going to be down a few bales in the south, as a weight of wool on a season it's marginal from what was anticipated would be the natural attrition that is still going on in our industry," Mr Ching said. "What was anticipated is nearly on the money."

(BusinessDesk)