Mecardo Analysis - Rainfall and fibre diameter
- By: "Farm Tender" News
- Ag Tech News
- Sep 06, 2018
- 466 views
- Share
By Andrew Woods | Source: AWEX, AWTA, BOM, ICS.
Swings in fibre diameter for the Australian wool clip cause greater supply volatility than is indicated by changes in total volume. The prime cause of year to year changes in fibre diameter is the seasonal condition, for which rainfall is used as a proxy in this article. Given the dry conditions prevalent in eastern Australia, it is time to check how rainfall and fibre diameter are tracking.
In June Mecardo looked at the relationship between change in the eastern Australian rainfall rank and the eastern Merino micron. At the time, the eastern Merino micron had not started to fall greatly against year-earlier levels. Since then the eastern Merino micron has fallen by 0.37 against year-earlier levels (August average) as is shown in Figure 1. The change in rainfall rank is extended forward using historic median rainfall, thereby showing the 50/50 path for the fibre diameter in the coming year.
The recent Mecardo article which breaks up eastern Merino combing sales into wool from pastoral and non-pastoral regions shows Merino wool production in eastern Australia to be complex at times. Figure 1 indicates the eastern Merino micron should steady at levels well below year-earlier levels through to next autumn. That points to downward pressure on broad Merino and upward pressure on fine Merino production for the balance of the current wool selling season.
What about Western Australia? The correlation between rainfall and fibre diameter are not as strong for the western data. The Mediterranean nature of much of Western Australia’s wool production system is harder to model, using simple models, than eastern Australia regions.
Figure 2 compares changes in the AWTA test volume micron and rainfall from mid-2000 onwards. While the correlation is not great in determining the level of change that can be expected in the fibre diameter, it does give a feel for which direction the change in micron is likely to be heading. In this sense, the rainfall data indicates the Western fibre diameter should start to pick up in relation to year-earlier levels, with the prospect of starting to increase year on year in 2019. Such an increase in early 2019 would help to offset the fall in eastern production for broad Merino wool.
Key points
* The eastern Australian Merino fibre diameter is falling, as expected from rainfall data.
* Rainfall data indicates we should expect the Merino fibre diameter to remain well below year-earlier levels through to next autumn.
* In Western Australia, the fibre diameter should start to pick up and even begin to increase, year on year, in 2019.
What does this mean?
Droughts develop with time and the effect on wool fibre diameter tends to be lagged to the change in rainfall. Merino fibre diameter has fallen markedly in recent months and rainfall data indicates the eastern micron should remain well below year-earlier levels through to autumn 2019. This means more fine wool production and continued downward pressure on broad Merino wool. In Western Australia, fibre diameter looks likely to start increasing in early 2019, which will help alleviate the shortage of broad Merino wool.
Share Ag News Via