UK: Wool prices are rising, but farmers still feel it is not enough.

Despite the rise in wool prices in the UK, many sheep farmers complain that shearing costs are still higher. The trade dispute between the US and China has exacerbated the situation.

Wool prices in the UK have reached their highest level since 2018. However, sheep farmers warn that they are still making losses on wool despite the moderate recovery as shearing costs exceed returns.

British Wool announced this week that shearing prices for 2024 have increased by 70% compared to the previous year. This is due to strong demand for crossbred wool and improved sales at auctions.

At the end, nothing sticks

Sheep farmer Frank Langrish from East Sussex told Farmers Weekly that while the recovery is welcome, it does not go far enough. "The prices are far from enough to cover shearing costs." He said it's simply unfortunate that wool prices had dropped so significantly. "There is still a lot of uncertainty, and prices need to be better than they are now." According to the National Sheep Association, average revenues still remain below shearing costs.

Fleeces from breeds like Texel, Cheviot, and Romney fetch between €1.30 to €1.54, while shearing costs typically range from €1.80 to €2.10 per sheep. For hill sheep breeds like Welsh Mountain or Swaledale, revenues can reach up to 36 Euro-Ct per fleece. "My eldest son is a shearer and can charge up to €1.90 per sheep," says Rob Lewis, chairman of the NFU Cymru Livestock Board.

"The increase in wool prices is a step in the right direction but still does not cover the costs of shearing, including all labor and packaging."

Wool exports

As for wool exports, British Wool sells to internationally active traders, including those in China and India. However, access to these markets is only possible through British Wool's collective marketing program due to export restrictions and the need for testing and export health certificates.

Although demand for finer wool for clothing remains strong, there is still broader market pressure. "Finer wool is definitely in demand for clothing - the upper market segment is good," says Langrish. "But with China as the main producer and the US as the main buyer, the ongoing trade dispute has created significant uncertainty."

The outlook for the carpet wool sector is bleaker, according to Langrish. "The carpet market is poor. Another manufacturer, Adams Carpets in Kidderminster, recently went bankrupt."

Jim Robertson, chairman of British Wool, is more optimistic and notes that auction prices averaged €1.19/kg, 21 cents more than the previous year, and that by mid-April, 83% of the shearing had been sold. "This price increase has translated into higher returns for our members," he says.

To improve farmers' access, British Wool plans to open 50 new collection points this year and expand its brand partnerships. More than 170 retailers now source goods from its members.