Wool Production On A Slow Road To Recovery

AUSTRALIA — April 4, 2011 — Australian wool production is slowly rising, arresting a 20-year trend
of decline. Good seasonal conditions across eastern Australia, higher wool prices and a lift in the
retention of ewes and lambs has led the Australian Wool Production Forecasting Committee to
slightly lift its forecast for shorn wool production in 2010/11 to 340 million kilograms, up from
its forecast 335 mkg made in December 2010. “The small increase is due to a slight increase in
sheep shorn and average fleece weights,” Committee Chairman Russell Pattinson said.

In releasing its forecast today, the Committee noted that the increase in sheep shorn was, in
part, due to some early shearing due to seasonal conditions and in response to the strength of the
wool market.

The Committee has also noted a change in the diameter profile of the national clip with
reduced volumes of fine Merino wool being produced and an increased production of strong Merino and
cross-bred wool types, as was forecast in December.

The Committee has also released its first forecast for the 2011/12 season. The committee
expects shorn wool production to rise by 1% in 2011/12 to 345 mkg, due to a slight increase in
sheep numbers (68.3 million, an increase of 0.9% from the 2009/10 level of 67.7 million) and sheep
shorn. The increase in sheep numbers is in line with ABARES and Meat and Livestock Australia

Strong grower sentiment has been reported toward the retention of stock, especially Merinos.
This has been directly reflected in the significant decrease in the sheep turnoff, reported by the
Australian Bureau of Statistics together with data from MLA’s National Livestock Reporting Service
data. While the increase in sheep numbers and wool production may only be small, it certainly
suggests that the long run-down experienced since the early ’90s may be ending.

However, Western Australia is the exception.

“While the outlook for south-eastern Australia wool production in the coming year will
benefit from the excellent foundation laid by above average 2010/11 rainfall, the committee is
concerned with the poor seasonal conditions in Western Australia and will closely monitor this in
coming months,” Mr Pattinson added.

Posted on April 5, 2011

Source: Australian Wool Innovation Ltd.