Sheep Industry News October 2022

MARKET REPORT Continued from Page 7

for meal prep after returning to the office, boredom with ad venture and a return to standbys for food. I am not sure of the primary factor at work in the decline of consumption. While I do not know the answer in terms of the decline in consumption, I think it will be important for the sheep industry to gain a clear understanding of each of the factors. If it is just lamb price and inflation then that is fixable. It might take a while to work through the inflation issues, but as prices moderate consumers should come back to lamb. If the primary reason for the decline is one of the other rea sons discussed, the response from the sheep industry needs to be different and might take even longer to fix than just prices and inflation. As is most often the case, I would suggest that the issue is a combination of the factors I have listed and might include other factors. I would suggest that it is important for the sheep industry to understand these dynamics as soon as possible, as losing momentum from a unique surge in con sumption could be difficult to overcome. WOOL The wool market is also facing demand challenges. As reported by Australia Wool Innovation, "subdued competi tion and lackluster offshore demand" has been a driver behind lower prices in August and early September. Since the start of the new season, the Australian Eastern Market Indicator aver aged 1,353 cents per kg clean versus 1,371 cents per kg clean in 2021. In early September, the market shifted with stronger support for medium/coarse wool types. In Week 10, fine wools – 18.5 micron and finer – had declined to levels not seen since early 2021, while medium wools – 19 to 22 microns – re mained steady to higher. The recent uptick in medium/coarse wools might be due to trends in the global sock market and impact wool prices in the long run. According to Verified Market Research, the global sock market was valued at $44.76 billion in 2020. More impor tantly, the global sock market is expected to reach a value of $69.82 billion by 2028. This means the market is projected to grow at a compound annual growth rate of 5.72 percent from 2021 to 2028. Nylon, cotton and nylon/cotton blend socks still dominate the market. Much of the projected growth in the market is driven by urbanization of developing economies. This growth is represented by a cost-conscious consumer. However, there is also increased spending on health and fitness all around the globe, which includes sports and ankle socks. Wool socks are an important segment in this health and fit ness market classification. Verified Market Research goes on to predict that wool socks are expecting significant growth during the forecast period as wool socks provide better comfort and performance for sports fanatics.

indicating a weakening demand. The COVID-19 effect on the lamb market has been men tioned before, but it can be seen in the three charts. Consumer sentiment dropped sharply at the onset of COVID-19, then rebounded as people began to fill more secure, and has steadily dropped with increased inflation to its lowest levels. Due to the cost of the pandemic and the economic policies that followed, the consumer price index has continued to rise. While lamb consumption saw a sharp increase during the middle of the pandemic, it has subsequently begun to fall off. Now that we have discussed some of the concrete data as sociated with lamb consumption during the last few years, I would like to offer some of my own conjecture – which has been informed through observation and conversations with others. For several potential reasons, consumers turned to lamb during the height of the pandemic. Possible reasons in clude scarcity of other meats at the meat counter, an adventur ous attitude to try new and different dishes, more time at home to prepare meals, or likely a combination of all the above. There are also a variety of potential reasons for the sharp decline in consumption and the trend back to pre-COVID levels. These include increasing prices and inflation, less time COMPLETELY UPDATED Sheep Production Handbook Fully Searchable USB

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