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Tuesday, November 05, 2013

Rainfall – excellent to awful

By Andrew Woods  |  Source: BOM, AWEX , ICS

Key points

  • Pressure on the Australian sheep flock due to dry conditions was maintained in October.
  • Half of the prime lamb production is in regions that are having a dry and prematurely short spring.
  • The trends for reduced cut per head and finer wool production will be extended as a result of dry conditions in NSW.

2013-11-04 Rainfall – Excellent To Awful FIG 1

2013-11-04 Rainfall – Excellent To Awful FIG 2

It’s no surprise that rainfall during October varied from comfortably above average to disappointing. But how did the rainfall rank across Australia’s key wool and lamb producing regions?

Queensland, most of NSW and northern South Australia experienced low rainfall during October. In contrast, south-west Western Australia, southern South Australia, south west Victoria and Tasmania had above average rainfall.

Rainfall rank compares rainfall for each region over a specified time period with the same period for the past century, where data is available. A value of 0% means the lowest on record, 50% means 50 out of 100 years have had more rain and 50 have had less rain, while 34% means that rainfall has been less for only 34 out of the past 100 years by Australian wool production region.

The average rainfall rank across wool production regions in October was a low 36% (38% for the three months to October). For the same regions weighted for crossbred lambs’ wool production (which is taken as a measure of prime lamb production) October was worse, with a ranking of 30% (34% for the three months to October).

Figure 1 shows regional rainfall rankings for the past three months, with the circle size proportionate to the amount of wool produced by each region during the 2012-2013 season. The good news for the wool industry is that the extremely dry conditions in Queensland and northern NSW are being offset by some excellent conditions in southern regions.

Figure 2 shows the same rainfall ranking for these regions with the circle size proportionate to crossbred lambs wool in 2012-2013. Queensland production is irrelevant and Western Australian lamb production minor. Central and southern NSW, along with western Victoria, accounted for nearly two thirds of production in 2012-2013.  For this reason, the dry conditions in the NSW regions and north west Victoria are important to prime lamb production.

An alternate way of looking at the issue is that half of prime lamb production in 2012-2013 comes from regions where the current three month rainfall rank is below 25%. 

What does this mean?

Pressure on prices from increased supply will continue. This applies to fine merino wool and mutton prices through adult sheep sales. All is not lost, with seasonal conditions tracking along well in southern production regions. However, the deteriorating conditions in NSW will continue to put pressure on the fine wool and mutton markets.

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