Realistic sellers emerge as woolgrowers give in to offered prices

Wool stockpiles are bulging in stores across the country as woolgrowers try to ride out low prices on offer, but despite the fluctuating market there are plenty of sellers swallowing their pride and taking the money offered.

The Australian Wool Exchange senior market analyst Lionel Plunkett reported that out of the 39,157 bales offered during the Week 16 sales auctions, the passed-in rate was “just 4.7 per cent”.

“Most sellers across the country were prepared to accept the prices on offer,” Mr Plunkett said.

The rate was the lowest passed-in rate since October last year, he said, as the season to date passed-in rate for bales dropped to 8.9 per cent in total — down from 13 per cent this time last year.

Dyson Jones State manager Peter Howie said while there was a lot more wool in agents’ stores across the country this year compared with last year, there was ”an element of sellers” that were taking the prices offered to ensure cashflow on-farm.

He said sheep producers were finding it hard to sell sheep and the prices offered were so low it was below the cost of production, which meant selling wool was a good option.

“Shifting sheep off farms has been difficult,” Mr Howie said.

“While the stores are holding more wool than usual, farmers are having a poorer season and we expect to see some of that stockpile sell, especially from those in the northern Wheatbelt.”

Selling depended on the need for cashflow to cover other business expenses that would normally be covered by the sale of livestock.

Endeavour Wool buyer Steve Noa said the passed-in rate had dropped due to the amount of “genuine sellers”, combined with an “improvement in buying” activity.

Mr Noa said after the market had been flat and drifting lower for months there was a sense of resignation among woolgrowers who had been holding out for better prices.

“We’ve seen some more realistic sellers,” Mr Noa said.

He said newly shorn wool might not reach the market until 2024.