forecast report 2015 april

FURTHER INFORMATION

Mr Russell Pattinson, National Committee Chairman Tel: +61 0419 872 684

Australian Wool Innovation Limited April 2015.

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Australian Wool Production Forecast Report

Australian Wool Production Forecast Committee

Summary

The Australian Wool Production Forecasting Committee (AWPFC) has set its forecast

production for the 2014/15 season at 341 million kilograms greasy for the 2014/15 season,

the same as the estimate for the 2013/14 season. The Committees first projection for

2015/16 has been set at 332 mkg, down by 2.7%.

There is expected to be a 2.8% reduction in the number of sheep shorn in the 2014/15

season. This decline is less than the 5.2% fall in the opening sheep numbers according to

the Australian Bureau of Statistics preliminary estimates released in January 2015.

The fall in sheep shorn numbers in 2014/15 will be offset by an increase in average fleece

weights across Australia due to good production conditions in several regions, including

southern New South Wales, northern South Australia and regions in Victoria. Nationally,

average fleece weights are expected to increase by 2.9% due to better than expected

fleece weights in these regions. Table 1 summarises the estimates and forecasts.

Table 1: Summary of wool production estimates and forecasts for Australia

Shorn Wool Production

(mkg greasy) 341 341 0.0% 332 -2.7%

Average Cut Per Head

(kg) 4.37 4.49 2.9% 4.50 0.2%

Parameter

2013/14

Final

Estimate

2014/15

Fourth

forecast

Change

y-o-y

(%)

2015/16

Initial

Projection

Change

y-o-y

(%)

Sheep Numbers Shorn

(million) 78.0 75.8 -2.8% 73.7 -2.9%

Opening Sheep Number

(million) 75.5 71.6 -5.2% 69.1 -3.5%

April 2015

Australian Wool Production Forecast Report April 2015

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Regionally, the Committee forecasts that wool production in 2014/15, compared with

2013/14, will fall the most in Queensland (-24.9%) and Western Australia (-7.4%), while

production in Tasmania will remain steady. Wool production in New South Wales, Victoria

and South Australia is expected to increase by 2.2%, 1.9% and 7.9% respectively. Table

2 shows the current forecasts by state for 2014/15 in comparison to the 2013/14 estimate.

Table 2: Summary of wool production estimates and forecasts for individual

states

The Committee noted that the AWTA wool test data for 2014/15 shows a reduction in

volumes of wool of 17.5 microns and finer, and an increase in 18-19 micron, 22-23 micron

and broad wool (27 microns and broader), in the first nine months of the season. This has

resulted in a 0.2 micron increase in the mean fibre diameter for Australia so far this season.

More detailed information on shorn wool production by state and by micron can be found in

the Appendix to this report.

Forecast for 2015/16

The Committee made its initial projection for the 2015/16 season, with a forecast 2.7% decline

in shorn wool production to 332 mkg as shown in Table 1. This decrease is due to an expected

reduction in opening sheep numbers by 3.5% to 69.1 million head, which is the result of the

continued high sheep and lamb turn-off rates in the current season even though lamb

markings rates appear to have increased in 2014/15.

Major data inputs

These forecasts are based on detailed consideration by the state and national committees of

current seasonal conditions, AWTA test data, AWEX auction statistics and matched brand

analysis information gathered on sheep producer and wool grower intentions, including the

MLA/AWI Lamb Survey results, ABS sheep and lamb turn-off and National Livestock

Recording Service yardings data.

ABS data

Table 3 summarises the Australian Bureau of Statistics flock data for the period 2010 to 2014.

The ABS preliminary estimate for the number of sheep as at 30th June 2014 (i.e. the opening

number of sheep for the 2014/15 season) was released on 21st January 2015. This preliminary

estimate shows sheep numbers at 71.6 million head for Australia. The ABS will release its

final estimate of sheep numbers as at 30th June 2014 on 29th May 2015. This release will

include data on the number of ewes mated and the lamb marking % in 2013/14.

66.4 341

Change y-o-y (%) -24.8% 2.2% 1.9% 0.0% 7.9% -7.4% 0.0%

2014/15 April Forecast 8.1 128.1 71.9 10.2 56.1

WA National

2013/14 Final Estimate 10.8 125.3 70.5 10.2 52.0 71.8 341

Shorn wool production

(mkg greasy)QLD NSW VIC TAS SA


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Table 3: ABS National flock numbers

Australian sheep turn-off statistics for the July 2014 to January 2015 period, sourced from the

ABS, are shown in Table 4. This turnoff data covers sheep slaughter, lamb slaughter and live

exports and is compared the equivalent period in 2013/14 and the five year average 2010/11

to 2014/15.

Table 4: ABS Sheep turn off data for 2014/15 (July to November)

The ABS data shows a small year on year decline in the number of sheep slaughtered (-3%)

but an equally modest increase in the number of lambs slaughtered (+2%) in the first seven

months of the 2014/15 season. However, when compared with the longer term (5 year)

average, both the number of adult sheep slaughtered (+33%) and the number of lambs

slaughtered (+13%) were up substantially for this season to date. There was an increase in

live exports year on year (+11%) in the July to January period of 2014/15, but the number

exported is only slightly down (-2%) on the longer term average.

AWTA wool test data (Financial year to end March 2014)

AWTA generates monthly greasy wool test data volumes within the various diameter

categories. Comparative financial year to-date results are shown in Table 5, and Figures 1

and 2 (overleaf), based on this report. A historical comparison of the Australian micron profile

percentage share and average micron can be found in Table 4 in the Appendix to this report.

ABS data 2009/10 2010/11 2011/12 2012/13 2013/14(p) %

Closing Flock (million head at 30th

June)*: 68.1 73.1 74.7 75.5 71.6 -5%

Breeding ewes (million head at 30th

June)*: 42.3 41.8 44.9 40.3 40.1 -1%

Lambs marked: 31.9 33.3 35.4 31.0 30.7 -1%

Ewes mated: na 37.4 39.6 34.9 na na

Marking % na 89% 89% 89% na na

*Used by AWPFC as sheep number at 1st July, opening day of following season. (p) preliminary estimate.

Jul 13-Jan 14 Jul 14-Jan 15 % Avg %

Sheep slaughter

('000 hd)5,939 5,740 -3% 4,319 33%

Sheep weights

(kg/hd cwt)23.2 24.3 5% 23.4 4%

Mutton production

(tonnes cwt)137,978 139,615 1% 100,943 38%

Lamb slaughter

('000 hd)13,013 13,272 2% 11,693 13%

Lamb weights

(kg/hd cwt)21.4 21.9 2% 21.5 2%

Lamb production

(tonnes cwt)278,745 290,025 4% 251,231 15%

Live exports

('000 hd)1,113,654 1,240,701 11% 1,270,176 -2%

Parameter

Financial year 5-yr FY


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Table 5: AWTA key test data volumes (WSA) for the financial year to March

AWTA data for wool test volumes presented in Tables 5 and 6 and Figures 1 and 2 indicate

that:

- Volumes of wool tested for 2014/15 to end March were 1.1% higher than for the same

period in 2013/14;

- There was a reduction in wool tested of 17.5 microns and finer and in the 20-21 micron

categories in the first nine months of the season;

- There were significant increases in the broad end of the clip (greater than 28.6 micron),

which was a recovery from the sharp decline in 2013/14;

- There were gains in the 18 19 micron and 22 23 micron categories;

- The volumes of wool tested (on a wool statistical area basis) in the first nine months of

the 2014/15 season were higher than year earlier levels in South Australia, Victoria,

Tasmania and New South Wales. It was lower in Queensland and Western Australia.

Figure 1: Comparison of monthly AWTA key test data volumes

30.5 TOTAL

2012/13 6,994 18,961 37,011 49,630 48,759 35,536 21,767 11,982 6,833 13,642 18,668 12,228 7,232 289,243

2013/14 10,825 22,719 39,445 49,866 45,601 30,728 17,115 9,346 6,059 15,058 18,553 8,942 5,509 279,767

2014/15 8,599 21,799 41,089 51,660 44,616 30,219 18,135 9,679 5,460 13,000 19,569 11,522 7,463 282,810

YTD - YOY% 2014/15 -21% -4% 4% 4% -2% -2% 6% 4% -10% -14% 5% 29% 35% 1.1%

AWTA Key Test Data

FY Total

greasy tonnes

Parameter YearDIAMETER (MICRON)


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Figure 2: Across-years comparison of Australian diameter profile to March

(AWTA based on key test data)

Table 6: AWTA Wool Statistics Area test data volumes (WSA) for the financial year to

March

AWEX auction statistics and matched brand analysis

According to the AWEXs auction statistics, first hand bales offered were higher (4.3%) in

2014/15 compared with 2013/14 to week 40 (the week ending 2nd April 2015), with increases

in the northern (+1.7%) and southern regions (+6.5%), and a small decline in the western

region (-0.4%). The AWEXs matched brands analysis for the same period shows a 2.2% fall

in wool volumes, with large declines in Queensland ( down by 14.2%) and in Western Australia

(-11.1%), and a smaller decline in Tasmania (-4.8%) offset by increases in South Australia

(+2.8%) Victoria (+1.3%) and New South Wales (+0.7%).

Bureau of Meteorology (BoM) seasonal rainfall seasonal outlook

The BoM recorded dry to very dry conditions over late spring to early autumn (October to

March) for western Victoria, the southern half of South Australia, northern New South Wales,

parts of Tasmania, much of the key wool growing regions in Queensland and the south-west

corner of Western Australia. The eastern part of Victoria, northern South Australia and south-

east New South Wales and considerable parts of Western Australia recorded above average

rainfall (figure 3).

Year NSW Vic WA SA Tas Qld Australia

2012/13 99,937 70,063 58,896 40,101 8,624 11,482 289,243

2013/14 97,734 65,004 61,341 38,393 8,387 8,813 279,767

2014/15 101,996 66,877 56,301 41,838 8,545 7,182 282,810

% change y-o-y 4.4% 2.9% -8.2% 9.0% 1.9% -18.5% 1.1%


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Figure 3: Australian six month rainfall deciles (October 2014 to March 2015)

These patterns are replicated for the full 12 months to March. Dry conditions were recorded

throughout Tasmania, in western Victoria/south-eastern South Australia, Queensland and

northern and western New South Wales and the south-west corner of Western Australia (figure

4). Northern parts of South Australia, the south-east of New South Wales and eastern Victoria

have seen above average rainfall.

Figure 4: Australian yearly rainfall deciles (April 2014 to March 2015)


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The Bureau predicts that much of mainland Australia will record wetter and warmer than

normal seasonal conditions between April and June 2015 (figures 5 and 6). Tasmania is

expected to see normal conditions.

Figure 5: Chance of exceeding median Figure 6: Chance of exceeding median rainfall (April to June 2015) maximum temperature (April to June 2015)

As at 31st March, the Bureau stated that the chance El Nio being declared in the coming

months is at 50%. This is double the average likelihood of an event occurring at this time of

the year. It also noted that international climate models monitored by the Bureau indicate the

central Pacific Ocean will continue to warm, with all models indicating El Nio thresholds will

be reached or exceeded by mid-year.

State Committee inputs

The following provides a summary of seasonal conditions and wool production in each state

for the 2014/15 season as reported by State Committees in April 2015. Seasonal conditions

have been good to excellent for some regions but dry to very dry in other regions.

Nevertheless, average fleece weights are expected to be above the levels seen in 2013/14.

Sheep shorn numbers will decline as a result of declines in opening numbers in most states.

As well, there has been a continued turnoff of sheep and lambs this season. Reports suggest

that these sheep and lambs have been shorn prior to slaughter. This increased turn-off of

sheep is expected to result in lower sheep numbers at the start of the 2015/16 season.

New South Wales

Seasonal conditions in the southern half of the state are generally very good, with some parts

experiencing some of the best conditions ever seen for stock. In contrast, the northern half of

NSW is dry, with some parts very dry, although well-established drought feeding strategies

are helping to maintain fleece weights. Recent drier conditions has meant few delays in

shearing, which is advanced and resulted in an increase in wool receivals and tests in the past

three months. It will mean that receivals and tests are likely to be significantly lower in the last

three months of the season. Overall for the 2014/15 season, sheep shorn numbers are

expected to be lower than in 2013/14, but not by as much as the decline in opening numbers,

and wool production is expected to increase by 2%.


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Victoria

Seasonal conditions have been good in significant parts of the state until drying off in past few

months. As a result, sheep have been in very good condition, until recently so average fleece

weights are expected to be higher in 2014/15. With the dry summer and early autumn, there

has been a sell-off of sheep. These sheep that have been sold-off are typically being shorn

first, which will mean that the fall in sheep shorn numbers will not be as great as the decline

in opening sheep numbers at the start of the 2014/15 season. The higher average fleece

weights will more than offset the decline in the number of sheep shorn. Wool production will

therefore be 2% higher for the full 2014/15 season.

Western Australia

Opening sheep numbers are reported by the ABS to be down sharply, but sheep shorn

numbers are not expected to be down by as much. Average fleece weights are expected to

move back to the 50th percentile level. There is currently intense competition for sheep for live

trade and slaughter. Seasonal conditions are dry in some areas but are excellent in the

northern sheep producing regions of the state. Over the full season, both the number of sheep

shorn and the average wool cut per head is likely to decline, resulting in a 7% fall in shorn

wool production.

South Australia

Seasonal conditions have been good to very good in the pastoral areas (northern South

Australia) and dry in the south-east. As a result fleece weights are up in the north and

reasonable in the south due to hand-feeding. This, combined with signs that pursuit of higher

fleece weights is starting to bear fruit, means that average fleece weights will be higher this

season. The number of sheep shorn will also lift, in part due to increased early shearing. For

the full 2014/15 season, there is expected to be an 8% increase in shorn wool production.

Tasmania

Seasonal conditions were difficult over summer in the main wool-growing regions in central

Tasmania and, unless there is rain in the next few weeks (before it gets too cold), winter will

be difficult. This is likely to result in a decline in average fleece weights. There appears to have

been a turn-off of sheep over the past 6 weeks, but these have been shorn before sale. The

number of sheep shorn for the full 2014/15 season is estimated to have increased, even

though opening sheep numbers were lower. This will offset the decline in average fleece

weights and result in the same level of shorn wool production in 2014/15 as in 2013/14.

Queensland

There was very low rainfall during summer (the main rainfall period for Queensland) in

significant parts of the sheep producing regions of Queensland. This has resulted in a further

significant turn-off of sheep as well as advanced shearing. Average fleece weights are lower

than a year earlier. Both the number of sheep shorn and the average cut per head will fall and

production is predicted to decline by 25% in 2014/15 to the lowest on record.


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Appendix

Table 1: Comparison of the 4th forecast for 2014/15 against the final estimate for

2013/14

Note: Totals may not add due to rounding

2013/14

Final EstimateQLD NSW VIC TAS SA WA National

2014/15

4th Forecast (Apr-15)QLD NSW VIC TAS SA WA National

Change % QLD NSW VIC TAS SA WA National

Opening Sheep Number -20.1% -3.9% -6.0% -1.9% -0.2% -7.9% -5.2%

Sheep Numbers Shorn -21.9% -1.9% -3.9% 1.9% 2.8% -4.1% -2.8%

Average Cut Per Head -3.8% 4.3% 6.0% -1.9% 4.9% -3.5% -1.3%

Shorn Wool Production -24.8% 2.2% 1.9% 0.0% 7.9% -7.4% 0.0%

4.44 4.49


(mkg greasy) 8.1 128.1 71.9 10.2 56.1 66.4 341


(kg) 3.58 4.60 4.20 3.85 5.10

14.2 71.6

Sheep Numbers Shorn

(million) 2.3 27.8 17.1 2.7 11.0 15.0 75.8


(million) 2.3 26.8 15.1 2.4 10.8

4.60 4.37


(mkg greasy) 10.8 125.3 70.5 10.2 52.0 71.8 341


(kg) 3.72 4.41 3.96 3.92 4.86

15.5 75.5

Sheep Numbers Shorn

(million) 2.9 28.4 17.8 2.6 10.7 15.6 78.0


(million) 2.9 27.9 16.1 2.4 10.8


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Historical Australian Production Figures

Table below provides historical sheep numbers, wool production and fleece weight statistics since 1991/92 for background information.

Table 2: Australian wool production statistics since 1991/92

Table 3: Australian micron profile of AWTA wool test volume statistics since 1991/92 (% share and average micron)

Opening Sheep

Number

Sheep Numbers

Shorn

Average Cut Per

Head

Shorn Wool

Production

(million) (million) (kg) (mkg greasy)

1991-92 163.1 180.9 4.65 801

1992-93 148.1 178.8 4.43 815

1993-94 138.0 172.8 4.56 775

1994-95 132.5 156.2 4.49 682

1995-96 120.8 145.6 4.37 655

1996-97 121.0 152.0 4.50 661

1997-98 120.1 150.0 4.35 633

1998-99 117.4 153.6 4.22 665

1999-00 115.4 144.2 4.33 619

2000-01 118.5 139.5 4.30 602

2001-02 110.8 118.6 4.31 555

2002-03 106.1 116.6 4.68 499

2003-04 99.2 104.7 4.28 475

2004-05 101.2 106.0 4.53 475

2005-06 101.1 106.5 4.49 461

2006-07 91.0 101.4 4.33 430

2007-08 85.7 90.2 4.24 400

2008-09 76.9 79.3 4.43 362

2009-10 72.7 76.2 4.52 343

2010-11 70.8 76.2 4.50 345

2011-12 73.1 76.4 4.53 342

2012-13 74.7 78.8 4.48 352

2013-14 75.5 78.0 4.47 341

2014-15f 71.6 75.8 4.49 341

2015-16f 69.1 73.7 4.50 332

Year

Year 30.5

Average Fibre

Diameter (um)

1991/92 0.1% 0.7% 3.2% 7.9% 15.2% 21.5% 20.0% 13.4% 7.1% 5.5% 2.9% 1.6% 1.0% 22.0

1992/93 0.0% 0.3% 1.9% 5.4% 12.0% 19.9% 20.6% 15.6% 10.0% 7.9% 3.0% 1.9% 1.6% 22.4

1993/94 0.1% 0.5% 2.4% 5.9% 12.1% 18.8% 20.8% 15.7% 10.0% 7.4% 2.8% 1.9% 1.7% 22.4

1994/95 0.1% 0.6% 3.5% 8.6% 15.2% 20.9% 19.9% 13.0% 7.0% 4.7% 2.8% 2.0% 1.7% 22.0

1995/96 0.0% 0.6% 3.3% 8.2% 15.3% 20.8% 18.5% 13.2% 8.1% 6.0% 2.7% 1.8% 1.6% 22.1

1996/97 0.2% 0.8% 3.9% 9.7% 15.3% 20.1% 18.3% 13.1% 7.4% 5.3% 2.3% 1.9% 1.8% 22.0

1997/98 0.2% 1.2% 4.5% 9.8% 14.8% 19.4% 18.3% 12.8% 7.7% 5.4% 2.6% 1.8% 1.5% 21.9

1998/99 0.2% 1.1% 4.2% 8.8% 14.6% 19.6% 18.6% 14.0% 7.6% 5.1% 2.7% 2.0% 1.5% 22.0

1999/00 0.1% 1.0% 4.2% 9.3% 14.4% 19.1% 18.2% 13.6% 7.7% 5.2% 2.9% 2.4% 1.9% 22.1

2000/01 0.2% 1.3% 5.2% 11.1% 15.7% 18.5% 16.4% 11.4% 6.8% 5.1% 3.6% 2.8% 1.9% 22.0

2001/02 0.3% 2.0% 7.2% 14.4% 19.9% 18.9% 12.9% 7.7% 4.1% 3.7% 3.8% 3.1% 1.9% 21.6

2002/03 1.0% 3.9% 9.8% 15.7% 18.9% 17.6% 12.0% 6.6% 2.9% 3.4% 3.7% 2.9% 1.7% 21.2

2003/04 0.7% 3.6% 9.9% 15.8% 18.3% 16.6% 11.9% 7.5% 3.6% 3.5% 3.8% 2.9% 1.8% 21.3

2004/05 1.2% 4.2% 10.5% 16.5% 18.7% 15.9% 10.7% 6.2% 3.2% 3.6% 4.1% 3.1% 2.0% 21.2

2005/06 1.4% 4.7% 9.7% 15.1% 18.7% 17.1% 11.5% 5.9% 2.9% 3.9% 4.5% 2.9% 1.6% 21.2

2006/07 2.0% 5.9% 11.8% 15.9% 16.9% 14.0% 9.9% 6.2% 3.4% 4.3% 4.4% 3.2% 2.1% 21.2

2007/08 1.9% 5.3% 10.9% 16.8% 18.4% 14.3% 9.2% 5.5% 3.0% 4.1% 4.8% 3.6% 2.2% 21.2

2008/09 2.0% 5.7% 11.4% 16.6% 18.5% 15.0% 9.1% 4.4% 2.3% 3.8% 5.1% 3.8% 2.2% 21.2

2009/10 2.3% 6.2% 12.6% 17.1% 17.5% 13.2% 8.4% 4.6% 2.5% 4.1% 5.4% 3.9% 2.3% 21.2

2010/11 1.5% 4.8% 11.0% 16.8% 18.0% 13.5% 8.4% 5.4% 3.0% 3.9% 5.5% 5.0% 3.1% 21.5

2011/12 1.8% 5.6% 12.0% 17.1% 16.6% 12.3% 8.3% 5.3% 2.9% 4.2% 5.8% 4.7% 3.3% 21.5

2012/13 2.5% 7.0% 13.3% 17.5% 16.8% 12.0% 7.3% 4.1% 2.3% 4.6% 6.2% 4.0% 2.5% 21.2

2013/14 3.8% 8.4% 14.6% 17.8% 16.0% 10.9% 6.2% 3.4% 2.2% 5.2% 6.4% 3.1% 2.1% 20.9

2014/15* 3.0% 7.7% 14.5% 18.3% 15.8% 10.7% 6.4% 3.4% 1.9% 4.6% 6.9% 4.1% 2.6% 21.1

Note: Totals may not add due to rounding. 2014/15* is data season to date (July - March)

AWTA KTD Micron Percentage Split of Wool Production (um)


11 | P a g e

Explanation of revised AWPFC data series

At the December 2005 meeting, the national Committee made the decision to collate and

review the key variables (shorn wool production, cut per head, number of sheep shorn) used

in the committee from the available industry sources and to create a consistent historical data

series at both a state and national level. This was required as some differences existed

between industry accepted figures and the AWPFC data series and to ensure a consistent

methodology over time. This process resulted in changes to the parameters average cut

per head and the number of sheep shorn for some seasons at both a state and national

level.

Modus operandi for the AWI Production Forecasting Committee

The AWI Wool Production Forecasting Committee draws together a range of objective data

and qualitative information to produce consensus-based, authoritative forecasts four times a

year for Australian wool production.

The Committee has a two-level structure, with a National Committee considering information

and advice from state sub-committees. It is funded by Australian Wool Innovation Limited,

which also provides an independent representative in the role of the Chairman of the National

Committee.

The National and state sub-committees comprise wool producers, wool brokers, exporters,

processors, private treaty merchants, AWEX, AWTA, ABARES, ABS, MLA, state departments

of Agriculture and AWI.

The Committee releases its forecasts in the forms of a press release and a report providing

the detailed forecasts, historical data and commentary on the key drivers of the forecasts.

forecast report 2015 april

Documents

forecast production

committee forecasts

wool productionmkg greasy

good production conditions

awta wool test data

northern south australia

opening sheep numbers

expected fleece weights