Shearer rate cuts discussed as industry considers producer sustainability

Among them is Hilton Barrett, Dubbo, who said his team would drop its rates from $4.50 a head to $4/hd, from October 1.

The Pastoral Award flock sheep rate is $3.68/hd.

"It's because of the conditions we're in at the moment," Mr Barrett said. "Now it's turned, we've got to meet the market and do our bit."

He said many producers were weighing up what to do with their crops - hold for grain, cut for hay, graze, or spray them out.

He said people still had a few weeks' grace, but beyond that, if it hadn't rained, hard decisions would have to be made.

Mr Barrett put the offer to producers that he could take sheep at no charge and would cover the freight cost up to 150 kilometres.

The response so far had been minimal, but he did mention one person that asked if he could purchase 3000-4000 Merino lambs.

He said the focus on Merinos was in line with general sentiment that people were banking on wool.

If and when he did take on sheep, he said the first step would be to put their owners in touch with farmers with failed crops that could be grazed, but who didn't want to buy sheep themselves for risk of being stuck with them.

Beyond this, he also had his own containment set-up and other interested sheep and lamb feeding operators.

He saw this offer, as well as his team's plan to lower their rates, as not just important as an outlet for homeless sheep, but also to help ensure there would be sheep to shear for young people with few other career options.

Shearing Contractors Association of Australia secretary, Jason Letchford, said while his organisation had certainly discussed rates, it was more in the context of the easing demand for shearers this season and what this meant for shearers' margins.

This past winter had been the quietest the profession had experienced in recent years.

"What we are nervous about are those feedlot jobs that might not fill because of the poorer sheep and lamb prices," he said.

"We're certainly looking at less sheep in the next 12-month cycle."

He therefore didn't expect many shearers to drop their rates.

While the sheep and lamb prices had experienced extreme volatility, he said the wool price had been far more stable.

He said if a contractor were to drop their rate from $12 a head to $10/hd, that $2 wouldn't be what saved the farmer.

"Compared to $100/hd or so in sheep and lamb, a $2/hd shift in the cost of shearing is not really a game changer," Mr Lecthford said.

He said most contractors were already on slim margins and the last thing the industry wanted was to deter people from shearing as a career.

WoolProducers general manager Adam Dawes had also not heard much in the way of rate reductions, but said it might be wise to consider in the broader context of industry sustainability.

He said in early 2021, WoolProducers was among industry groups which agreed to non-binding rates of 15pc above the award, which was during the COVID pandemic when New Zealand shearers were unavailable.

"The award provides a base level and I don't think there's too many people that have been paying award rates in the past two or three years," he said.

He said, however, this was something individual shearers and contractors would have to work out.

On Tuesday, the Eastern Market Indicator had lifted lifted 23 cents a kilogram since Monday the week prior, settling at 1150c/kg, still 268c behind the July 5, 2022, peak of 1418c/kg.

The standout was 19-micron wool which jumped 47c, helping drag the EMI further from its recent low point of 1118c, where it sat on September 11, 2023.

NSW Farmers wool committee chair David Young said the association was hearing of farmers being increasingly concerned about their margins.

"It is really important that farmers know they are not alone - there is support available through LLS (Local Land Services) and DPI (NSW Department of Primary Industries) and, if finances are tight, confidential advice through the Rural Financial Counciling Service," he said.