By Andrew Woods | Source: AWC, AWEX, BOM
For the southern regions this is a critical time of year for rainfall, especially following a dry spring. Wool production tends to reflect the seasonal conditions during which it is grown. In this article we use the rolling 12 month rainfall rank as a proxy for seasonal conditions during which combing wool (full length) has been grown to review the current clip and look forward to what might happen in the coming year.
Figure 1 shows the rolling 12 month rainfall rank to April, for 16 regions from around Australia, and the change in these ranks from year earlier. A rank of 50% is a rainfall level for the past 12 months which has been exceeded for half of the past century, and which the region has had lower rainfall half of the time. The far north western region of NSW has had the best rainfall for the past year, followed closely by south West Western Australia, with both regions near median levels.
The standout regions are those in western Victoria, southern South Australia and Tasmania with a rank around 10% or less. This puts the past year in the bottom 10% of years for rainfall. What makes it worse for these regions is that the rank for the past year is only down by around 10% which means the preceding year was dry also.
When looking at wool production the two key wool factors allied with rainfall are clean fleece weigh and fibre diameter. Staple strength and point of break in the middle are impacted by the change in seasonal conditions (especially from drought to green pick) and change in vegetable fault is ultimately driven by seasonal conditions. To understand the likely changes in these aspects of wool production we need to have an understanding of the change in seasonal conditions, which we use rainfall as a proxy.
Figure 2 looks at the change in the rolling 12 month rainfall rank we could expect by next April if the regions receive median rainfall in the next 12 months. By definition there is a 50% change of rainfall exceeding this level of rainfall and a 50% chance of it falling short in the coming year.
With median rainfall Victoria and southern South Australia would pick up by a huge 30-50% ranking, blowing fibre diameter out and seeing a big increase in clean fleece weights. Most other regions would have a solid 10-20% rise in rainfall ranking.
Figure 3 takes Figure 2 and adds a weighting for each region according to the wool sold during the past 12 months. The size of the circle represents the volume weighting for each region. This allows us to weight the potential changes in rainfall.
The continued run of dry seasons in recent years has kept downward pressure on sheep numbers, clean fleece weights and fibre diameter. On the positive side it has kept vegetable fault down but this aspect will never offset the loss of volume. Looking into the coming year, there is a high probability of seasonal conditions improving through increased rainfall. This means there is a good chance that sheep numbers will be stable, clean fleece weights will increase as will fibre diameter. Western Australia has started down this path but for the time being in the eastern regions this all remains in the realms of possibilities (until a general break is achieved.)
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