Sheep Industry News May 2025

WOOL Prices across the range of microns have generally been increasing over the last few weeks. For example, 20-micron wools began the year at U.S. $4.14 per pound clean weight, climbed as high $4.51 by mid-March, and averaged $4.47 per pound by the first week of April. The $4.47 per pound price in early April was 38 cents per pound higher than the year before for that week. Only the 17-micron cat egory had prices in early April below those of the prior year, 14 cents per pound lower. While some sources have indicated increased demand helping move prices higher, there are fewer bales of wool offered for sale in Australia versus last year. Over the last four weeks, an average of 38,967 bales were offered compared to 41,454 per week last year for a decline of 6 percent. The market is likely headed into a lot more uncertainty during the next weeks and months given tariffs – heavily tariffed China is the top export market for American Wool – volatile currency values and interest rates. MARKET UNCERTAINTY We are headed into a lot of market uncertainty and volatility in coming weeks and months. Tariffs should have the effect of reducing imports and increasing prices, if nothing else changes. That would mean – broadly speaking – higher prices for producers and consum ers.

There are likely to be a lot of other changes. One to watch is a weakening dollar versus other currencies. A weaker dollar will also make imports more expensive and work to reduce imports, but also boost exports. Tariffs and currencies will change relative prices between countries further impacting trade. Another to watch – and one that could be a lot more important – is the effect of this volatility on bond prices and interest rates. The market is seeing higher interest rates due to expectations of higher inflation and pricing in more risk. The uncertainty is causing more fears of a recession, which would not be good for demand. On balance, there are plenty of worries in the market. I think it helps to remember some fundamental market conditions of supply and demand to help sort out the noise.

EE

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May 2025 • Sheep Industry News • 7