Mecardo Analysis - Staple length effect on fleece price
- By: "Farm Tender" News
- Ag Tech News
- Jan 24, 2019
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By Andrew Woods | Source: AWEX.
Staple length is a major driver of wool price as it determines many of the possible processing pathways a lot can proceed along. In recent years with a very strong cardings market, the effect of staple length on price has been muted. With a 30% fall in carding prices during the first half of the season, staple strength has increased in importance for some categories. This article looks takes a look at the current (January) price effect of staple length.
In Figure 1 the January prices (to last week) for a range of 17 micron merino fleece (plus 17 micron locks and crutchings) are shown as an index to the 90 mm length price. There are some irregularities in the graph (such as the 67 mm price being higher than 72 mm) which will happen with a couple of weeks of data. Overall the price effect of length follows the expected pattern, with prices falling once the length falls below 65-70 mm and falling once the length exceeds 90 mm (86-95mm). Locks achieve about half of the full fleece length price, carding length fleece (30-40 mm) about 65% of the full price with the price rising through to around 70 mm.
The next category looked at in Figure 2 is 19 micron. The effect of staple length is slightly different to Figure 1. Full price is maintained until the 60-65 mm range and then starts to fall as the length becomes shorter. On the other side, longer length prices are higher (have smaller discounts). The proportion of merino wool offered at sale tends to be at its lowest the season early in the calendar year so low supply might be helping support shorter and longer prices.
Figure 3 repeats the exercise for 21 micron. It shows a lot of gaps in the data, which reflects the limited volumes of broader merino wool being supplied to the market at this time of the year and because of drought.
Finally the effect of length on 23 micron crossbred wool is shown in Figure 4. Once the staple length falls below 90 mm, prices for crossbred fleece fall away. This can vary if the 80 mm length lot is well prepared, has no colour issues and has a low vegetable fault, in which case it has a good chance of achieving full price in the current market. The 60-70 mm length Crossbred fleece are priced around crossbred pieces values. Sub-60 mm 23 micron crossbred fleece achieve around 60-65% of the full fleece value.
Key points
* Staple length has returned as a strong influence on the price of fine merino fleece.
* Staple length remains a relatively weak influence on the price of medium and broad merino fleece.
* For crossbred fleece wool value starts to fall away at 80-90 mm length, depending on preparation standard, colour and vegetable matter levels.
What does this mean?
This article provides a snapshot of the effect of staple length on fleece prices during the first half of January. Low supply looks to be helping crunch up prices of different lengths for medium and broad merino wool. Discounts for shorter length broader merino fleece will be tested in the June quarter when the relative supply of shorter wool increases markedly. Crossbred fleece prices, as usual, start to be discounted as the length falls below 90-100 mm, although these discounts will vary depending on other wool specifications of the low.
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