Weak dollar boosts exports; replacements in short supply
By CAROL RYAN DUMAS
Like lamb markets, wool markets are garnering high prices.
"Inventories worldwide are very tight," said Julie Stepanek Shiflett, an independent consultant for the American Sheep Industry Association.
International buyers, including India and China, have been active in the U.S., she said.
"Contrary to lamb, the weak U.S. dollar makes our exports more competitive," she said. A weak dollar tends to make U.S. products less expensive for foreign buyers.
The average price of clean wool last spring was $3.28 a pound, the highest since about 1989, said Rita Samuelson, ASI's director of international wool and pelt marketing. Currently, it's about $2.50 and rising. That compares favorably with $2.09 in 2009, $1.56 in 2005 and $1.10 in the 1980s.
Exports are important to that price, and have been since the U.S. lost many of its textile mills in the late 1990s to overseas mills using low-cost foreign labor, she said.
"Our domestic customers are very important, but they can't use all we produce," she said.
While U.S. exports of wool slumped during the economic recession in 2009 to 7.48 million pounds from the high of 15.6 million pounds in 2007, the overall trend has been upward, she said. From January to June this year, exports were up 25 to 35 percent.
Retail markets for apparel and carpet have also picked up, Shiflett said.
The high price of cotton has helped wool prices. Prices are over $1 a pound, up from about 77 cents in January. That discourages manufacturers from blending cotton with wool to make a cheaper product, she said.
Crude oil prices are contributing to the boost in the wool market as well. Synthetic wool, which is made from petroleum, competes with natural wool.
Oil prices have been rising since early August, and the U.S. Department of Energy raised its price outlook by $1 a barrel from last month. The agency forecasts the average 2011 oil prices at about $83 a barrel, up from nearly $78 in 2010 and about $62 in 2009.
Shiflett said she expects the strong wool markets to hold.