Producer prices for the 2021 wool clip will be up 36.4p per kilo on 2020 – but still below where they should be, British Wool has admitted.
As shearers prepare to make inroads into this year’s clip, the membership group which is owned by around 35,000 sheep farmers across the UK, said it would be making payments worth £8.4million.
It also confirmed the free haulage offer introduced in 2021 would remain in place this year, which means members who take wool to any British Wool drop points will not be charged onward carriage.
Other improvements introduced last year which will continue for 2022 include a lower threshold for the volume premium payment, so clips of 2,000kg or more will continue to receive an additional 4p/kg with further incremental increases for those producers who deliver larger volumes.
Returns for the 2021 clip will be around 40pk for many core grades, around 30ppk for Blackface wool and around 15ppk for Welsh and Swaledale. Some speciality types such as Herdwick and Bluefaced Leicester will receive significantly higher returns, with Herdwick returning 80ppk and Bluefaced Leicester £5.50 per kilo.
Most types of organic wool will attract an additional £1 per kg premium.
British Wool chief executive, Andrew Hogley, said the better price to producers was due to improved auction prices over the last 12 months, alongside a push to reduce operational costs.
“Although the price is not yet where we would like it to be, it represents a huge recovery since the difficulties of 2020. We continue to work hard to improve returns further for our members,” he said.
“We are optimistic that the strong demand we have seen over recent months will be sustained, that the recovery in the wool market will continue through 2022, and that this will result in further price improvement for the 2022 wool clip.”
Mr Hogley said he recognised that members can choose where to send their wool, but added that returns from British Wool are competitive relative to the prices offered by competitors.
He added: “However, unlike our competitors we don’t make a profit from wool. We sell on our members’ behalf and deduct the cost of marketing and processing. The more wool we have to sell, the lower our costs per kg and the better the returns are for all our members.
“Now more than ever, it is crucial that farmers work together and market their wool through British Wool so that together, we can maximise returns for this year’s clip and beyond.”