|2010 Marks Strong Competition for U.S. Wool
(November 1, 2010) The U.S. wool market benefited from very strong prices last summer, buffeted by the weak U.S. dollar and solid international demand. Looking back, U.S. clean wool prices (January through September) averaged $2.38/lb. in 2008, lost over one-third of its value in 2009 to $1.58/lb., but then rebounded 64 percent to $2.59/lb. in 2010. The wool prices in 2010 landed 9-percent higher than 2008 averages.
Producers took advantage of the hot market, as most spring wools sold by mid-summer. The wool market was quiet through late summer and early fall and won’t likely see activity until the fall shorn clip sells in December.
Between 2008 and 2010 (nine months through September), wool prices gained in the Fleece States but weakened in the Territory States and in Texas and New Mexico. In the Fleece States, clean-wool prices were 28-percent higher, at $2.56/lb., than 2008 averages. For example, 20 micron gained 10 percent to $3.48/lb., 21 micron gained 3 percent to $3.10/lb., 22 micron strengthened by 3 percent to $2.95/lb., 23 micron gained 4 percent to $2.84/lb., 24 micron jumped 8 percent to average $2.59/lb. and 25 micron gained 1 percent at $2.18/lb.
Clean-wool prices softened an average 5 percent between 2008 and 2010 in the Territory States – from $2.35/lb. to $2.23/lb. From January to September 2010, 19 micron averaged $3.08/lb., 20 micron was $3.24/lb., 21 micron was $3.10/lb., 22 micron averaged $2.93/lb., 23 micron landed at $2.67/lb., 24 micron averaged $2.30/lb., 25 micron was $2.07/lb., 26 micron was $1.84/lb. and 27 micron averaged $1.59/lb.
Between 2008 and 2010, wool prices in Texas and New Mexico lost an average 15 percent. For example, 19 micron fell 9 percent to $3.26/lb., 20 micron dropped 11 percent to $2.96/lb., 21 micron fell 4 percent to $3.31/lb., 22 micron softened 19 percent to $2.62/lb. and 23 micron fell by one-third to $2.17/lb.
Fostered by a weak U.S. dollar and growing consumer spending, U.S. wool exports gained year-on-year though June 2010. Total raw-wool exports were up 26 percent, from a slow export year in 2009 to 4.2 million lbs. Wool-top exports jumped 70 percent to 931,200 lbs. Total wool textiles were up 15 percent year-on-year. The highest value subcategory, wool yarn and thread was up 4 percent to 18 million lbs. Second in value, wool floor coverings were up 63 percent to 13.2 million lbs. Wool home furnishings were up 4 percent at 472,000 lbs. and wool apparel was down 6 percent to 8.9 million lbs.
Looking ahead, the U.S. wool market will likely stay strong in 2011. The U.S. dollar shows no sign of strengthening and international markets have been strong in recent months. Although Australia’s wool sales likely establish price trends worldwide, New Zealand’s wool market might be a better comparison to the U.S. wool market given its internationally famed coarse carpet wools. By October, “New Zealand wool prices surged to a 14-year high amid renewed demand for the fiber in the Middle East and Europe,” (nzherald.co.nz, 10/4/10).
Price gains overseas defied stronger Australian and New Zealand dollars, suggesting Chinese and European wool demand is gaining traction. After hitting a two-year high in January, the Australia market cooled 6 percent through September, but then gained into early October. “The Australian wool market continues to buck the trend of export commodities dipping as the dollar rises,” (ABC Rural Australia, 10/4/10).
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