Western Australian producers are desperately looking to offload thousands of extra sheep, as spring flush and a record lambing season looms.
With the three-month northern hemisphere moratorium in place until tomorrow, Friday, September 15, low prices and limited kill space, many have been forced to hold onto anywhere from 500 to several thousand red-tagged wether lambs.
The issue has only highlighted the importance of market alternatives, as producers are now considering short and long-term solutions.
Some, who have the feed and carrying capacity, have taken a gamble and shifted their focus to wool in the hope the market will eventually turn.
Others are now grazing sheep in paddocks, where an unfavourable season and dry conditions have not allowed them to get a crop up off the ground.
Darren Spencer operates Spencer Shearing Services at Lake Grace and has seen firsthand how much pressure the carryover is placing on producers.
Mr Spencer said woolshed teams were working around the clock to shear the thousands of sheep that should have already been sent to market.
He said the issue was a cause for major concern among producers, with some even considering avoiding joining all together this season.
"I was shearing at one farm recently and there were 1200-head red taggers, which had already started breaking their teeth," Mr Spencer said.
"As soon as that happens, the price drops quite significantly, for example from $5 per kilogram to $2 per kilogram, so producers really need to find a market for them.
"On top of that, the producer had another 3000 to 4000 new-season lambs on the ground.
"These lambs are also going to need somewhere to go."
Taking a look at the shearing season, Mr Spencer said wool was lower yielding because of the dry summer, particularly on some of the salt bank country.
Despite this, he said overall quality had been sound, with plenty of bulk in the fleeces.
"I think there will be plenty of wool around this year, let's just hope the market keeps up.
"Some blokes are saying I may as well hold onto my wether hoggets and grow some wool while there is feed about.
"Then if they have to get rid of them, they can just be shorn and sold, and hopefully by that time the market has changed."
Mr Spencer said contracts had already been offered for when the live sheep export trade resumed this week.
He said more boats were needed at Fremantle Port to clear the carryover and said the uncertainty around the trade's future was hurting producers most.
"We need some certainty in the market, people don't know what to do," Mr Spencer said.
"Do they hold onto the sheep or reduce numbers? How soon before the trade is going to end?"
The end goal for WA's sheep industry is to keep the live export trade operating and this is something they have been fighting hard for.
From a shearing perspective, Mr Spencer said if the industry lost 15 to 25 per cent of sheep in WA, there would not be a continuity of work to keep people busy.
He said some may think it would be easier to find shearers, however this actually would not be the case.
"Everyone will want to shear around a certain time of the year," Mr Spencer said.
"What do we do with our staff in the months that they (farmers) don't want to shear?
"It is already a struggle to keep workers busy from May to July."
Mr Spencer said two teams worked through this season, but finding experienced shed staff had caused some headaches among contractors.
He said Australian Wool Innovation continued to run shed hand schools and trainings to fill the gap, with a lot of interest.
"Workshops are held every now and then, it is just a matter of contractors putting their hand up to take them and then finding trainers, who are willing to do it," Mr Spencer said.
"We have also worked hard to get in-shed training done and then offer positions, but accommodation has been one of the biggest issues when it comes to securing workers."
Australian Wool Network (AWN) wool and livestock State manager Greg Tilbrook said the season had been extremely tight for cropping areas in north and east WA.
Mr Tilbrook said the unfavourable season would start affecting numbers, as producers looked to place surplus sheep into the live sheep export trade, local abattoirs and interstate.
"The season will start to have a bit of an impact in terms of sheep numbers, but also trying to find a home for sheep," Mr Tilbrook said.
"It is extremely difficult to get mutton processed.
"Processors have an ample supply of lamb and the market for mutton product is currently limited at best.
"We also have new season lambs dropping and good lambing percentages again, off the back of two good lambing years."
Despite the drier conditions in May, the quality of wool produced has been very clean, bright and white.
Tensile strengths, which are one of the biggest discount factors in wool, have also looked better than normal so far.
Mr Tilbrook said ewes had been kept in good condition right through summer and lambing, and were not stressed.
For that reason he said tensile strengths had stacked up relatively well on the earlier shearing.
"We had a lot of faulty wool with high seed faults, breaks and low yields in January-March," Mr Tilbrook said.
"I'm anticipating the quality of wool to be better than the summer and autumn clip and as good as, if not better than, last year."
With shearing in full swing across northern and eastern parts of WA, shearers have been in high demand.
Similarly to Mr Spencer, Mr Tilbrook said this was because of the carryover of sheep from last season.
He said limited marketing opportunities and falling prices made it difficult for producers to offload older ewes.
Again, in some instances people have decided to wait for the wool market to turn and hold onto sheep, rather than sell them cheaply.
It is a gamble, but those with feed and carrying capacity have been willing to take the risk.
Mr Tilbrook said the issue was there are already large volumes of wool in broker stores and onfarm right across Australia.
As such, he said if there was a run on the market, there was already enough wool waiting to be sold.
"There is a floor price that it won't go over, but it isn't that different to the levels we are at now.
"As soon as prices shift, a heap of wool could be dumped onto the market and we could end up with a 50,000 bale sale.
"The trade can handle 35,000 to 40,000 bales a week in most weeks, so if this happened, prices could come back 50 to 100c."
Looking ahead, Mr Tilbrook said the wool market was staring down the barrel of a tough six months.
He said rising interest rates across the world meant consumer spending had been pulled right back.
This meant there was a backlog of product in greasy wool all the way through to garment.
"Given the current market conditions, I'm surprised the 20-21 micron wool is holding up as good as it is.
"It is the finer woolgrowers who are struggling, with Europe dropping out of the market and there being a reduced demand for 17-18 micron wool," he said,
"Fine wool has come back 600-700c clean in the past six months."
Mr Tilbrook added that consumer spending in Australia's biggest wool market China had also fallen right back.
He said this was mainly due to financial situations, off the back of higher interest rates.
