WOOL has a bright future in Australia, according to WoolProducers Australia president Geoff Power.
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Speaking at the Rural Media SA breakfast at the Royal Adelaide Show last week, he said wool production was Australia's oldest and most iconic industry.
"I'm optimistic about the future," he said.
"Most South Australians are doing quite well as medium wool producers.
"Last week, 21 micron wool sold for 856 cents greasy with an average wool cut of 6.5 kilograms a sheep. This is an income of $55 in comparison to fine wool growers who were getting 976c greasy for 17.5M wools at 3.5kg a head."
Mr Power said AWI's Campaign for Wool had achieved big success in Europe and was enthusiastically backed by Prince Charles.
Dropping levels of cashmere wool production in Mongolia would also provide opportunities to blend wool and add greater value at the farmgate.
Michell Wool managing director Peter Michell agreed, saying the wool industry looked more competitive now than it had in the past.
"Wool is in fashion and the Australian dollar is coming off recent highs which helps our value proposition," he said.
Mr Michell, who formed part of a panel at the breakfast with Mr Power and Merino SA president Peter Meyer, said on-farm costs needed to be at competitive production cost benchmarks: 4.5 times the cost of cotton.
"As long as this happens, and our governments let hardworking Australians get on with creating new markets and being entrepreneurs, and we all get on and have a little bit of luck, I believe we will all survive, succeed and flourish once again as an industry," he said.
"At Michell Wool, I see a future that the company remain proudly SA owned and operated and also recognised as a global leader,"
Mr Michell said in Australia sheep outnumber people 3.5 times to 1.
"Last year fibre production grew by 7 per cent – and this year it is on track to do the same," he said.
"In contrast, and in spite of increases in sheep numbers globally, world wool supply remains flat as the shift toward meat sheep or dual-purpose breeds continues at the expense of wool.
"This means that the global supply of wool remains at its lowest volume in at least 70-years."
Mr Michell said that during the past 15 years China had increased its global share of wool processing from 15pc to 80pc.
"This wasn't done through local markets but was achieved through a low-cost and highly subsidised economy," he said.
"Michell Wool has a significant processing and marketing presence in China, giving us clear visibility to the cost of operating there.
"China's costs are moving higher at a rate that has led many to debate 'where next' for the textile industry at Salisbury.
"Today our factory there competes head-to-head with our Chinese competitors."
Mr Michell said he believed that wool processing could grow in SA in a highly environmental and highly economic manner.
* Full report in Stock Journal, September 19 issue, 2013.
