LAST week's freefall in the wool market which saw the eastern market indicator shed 163 cents a kilogram could not have come at a worse time for Tintinara woolgrower Richard Harkness, with his 160-bale Merino clip due to be offered at auction next week.
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But he is far from losing faith, despite the market being about 200c/kg below his sale prices in August 2018.
He has withdrawn the Gumburra Park clip - shorn from his 1500 stud ewes and 1600 commercial ewes last month - hopeful the "blip" in the market will pass in a few weeks.
"I had no reason to think we would be far off last year's price with supply poor and demand good," he said
"It makes no sense to sell 12 months worth of production just because it is ready to sell, when clearly there are outside factors contributing to a lack of confidence in not only the wool market as well as the stock market, which also has the yips."
As a worst case strategy we will drip feed small amounts onto the market through spring to hopefully achieve a better outcome as opposed to a dump and run.
Mr Harkness does not support market intervention but expects growers withdrawing wool from auction will have the same effect, tightening supply.
"At the moment we have wool buyers thinking 'tomorrow it will be cheaper so I won't buy' but the minute the tide turns they will be back in- I'm hoping it is not too far away," he said.
"As a worst case strategy we will drip feed small amounts onto the market through spring to hopefully achieve a better outcome as opposed to a dump and run."
Mr Harkness says the present situation highlights the market risk of China buying 70 per cent of the clip.
"We clearly know China has to keep manufacturing for their own economy's sake, if that is reduced because of the lack of supply of wool that will hurt them," he said.
"On the flipside the US has to keep consuming goods from China to keep their economy going, no one wins out of this, hopefully commonsense prevails soon."
Gumburra Park's hogget wool is between 16 and 17 micron and breeding ewe lines between 18 and 19 micron.
But Mr Harkness who is having his annual SWM ram sale on Friday, August 30 does not think it will impact on buying demand.
"There is no reason to think anything has changed fundamentally. People's breeding programs and expansion program will still be rock solid in place because the gross margin of a self-replacing Merino flock is still top of the tree."
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