China’s demand for sheepskins brings silver lining to farmers’ pockets

Lambskins were virtually worthless at this time last year, but a shortage of supply and resurgent demand from China pushed prices up to $ 11 per head.

Wagga Wagga-based cattle agent James Tierney described the skin market as a “kick start” for sheep farmers, who already sell lamb in a lucrative market.

“There has been a huge change. Around this time last year, Miller [new season lambs] the skins were worth nothing or $ 1 maybe $ 2 a head, ”Mr. Tierney said.

“Fast forward to now and the last two months and they’re all making $ 8 to $ 11 per head.”

As an animal by-product, the supply of sheepskin is directly related to the number of sheep processed.

But the market can still be difficult to predict with demand largely dictated by the Chinese fashion industry, especially the footwear industry.

“It probably goes with what’s going on in China… everyone has to eat but not everyone needs to use skins.”

Dubbo-based Fletcher International Exports director of sheepskins, Gerald Webster, said there were typically two or three Chinese buyers and tanneries bustling the market.

“Their demand is national and I think COVID-19 is opening, markets opening. It increases domestic sales,” Mr. Webster said.

Processing and shipping delays impact supply levels

Getting the sheepskins to China has been a challenge, with processors and shipments stranded by COVID-19 disruptions.

“Most of the processors had reduced production, labor is probably the main cause of this, but there have been epidemics in some areas and it has slowed the factories down,” Mr. Webster said.

“Shipping is bad and it probably hasn’t hit its crisis level yet.”

Although sheepskin prices hit the highest levels since May 2018, commodities analyst Matt Dalgleish said it was still a long way from the record high of nearly $ 20 per head a decade ago. .

“I don’t think we’re going to see it that high, but there certainly won’t be a big stampede of animals coming out of the woods,” Mr Dalgleish said.

“The supply for all of these co-products is going to be still quite tight and that will support these prices somewhat.

“But seasonally, we see an influx of lambs hitting the Victorian market over the next few months, which could reduce some of the immediate movement in this price.

“I don’t think we’ll see him collapse, but he might level off a bit as these lambs pass.”