Higher wool prices are a must: WAFarmers

The Western Australian Farmers Federation (Inc) (WAFarmers) Wool Section has welcomed the recent increase in wool prices, however is calling for higher wool prices to reflect market demand and the increasing cost of production.

WAFarmers Wool Section Senior Vice President, Ed Rogister, noted that the last time the price of wool hit the 1,000c/kg mark was in February 2008 at a price of 1,003c/kg. Over 20 years ago in 1988, wool was being sold at over 1,500c/kg.

Since this time, the cost of finance, with farm debt at record levels, has increased significantly, as has the cost of shearing, wool classing, infrastructure purchases and repairs, animal health products, fertiliser and breeding, which are definitely not reflected in current market prices.

“If the consumer price index of an average of three per cent per annum is added to the 2008 wool price, this figure should today be at about 1,090c/kg - just to keep the market on a level playing field,” said Mr Rogister.

“In relative terms, the wool producer is going backwards as far as profitability is concerned.”

“Wool producers cannot rely on gains in production efficiencies and the volume of wool produced to remain profitable.”

“While wool breaking through the 1,000c/kg mark is welcome, it is long overdue, and must increase further to recognise the cost of production. Wool buyers must acknowledge this and continue to show strong market signals, and offer higher prices for wool.”

“For woolgrowers to continue growing wool and investing into their properties, they need to see real money for their premium quality product,” concluded Mr Rogister.