Despite the slump in wool values, sheep farmers are being asked for their continued support and supply to British Wool, thereby ensuring volume preservation and further development of product ranges, for exploitation in a strengthening market, post Covid-19.

British Wool claims that without the consolidation of wool in commercial volumes through the co-operative and its continued more efficient marketing, the long-term prospect would be lower prices indefinitely for all producers.

Historically, it says the Republic of Ireland and Europe, where only spot buying exists, prices have been less than half of those paid to British Wool producers.

Instead, the board points out that marketing wool through British Wool, represents the only realistic prospect of improved prices on a national scale in the medium and long term.

However, at present the market for cross-bred wool globally is extremely challenging due to Covid-19 and the loss of markets particularly in China, and is likely to remain so for the foreseeable future.

Hence, British Wool – which is owned by approximately 40,000 sheep farmers in the UK – will not be making an advance against 2020/21 clip wool and instead will make full payment for 2020/21 clips from May, 2021, onwards, once the clip has been sold.

But, should the market happen to improve somewhat in the next 12 months from the trough it is in at present, the price returned to the producer would show the benefits of any such rise.

“As British Wool enters its 70th year of operation it faces the most severe recession in its history due to the Covid-19 epidemic,” said a spokesperson.

“The global market for cross-bred wool has been shut since February and remains closed. February to May is normally the busiest selling period of the year and as a result we have circa 9m kg of unsold stock out of a total 2019/20 clip of 27m kg.

“Given the situation we find ourselves in, we have had to place a value on this unsold stock which is at a significant discount to the last prices sold.”

As a result, the average price paid to producers for the 2019/20 clip will be 32p per kg and is being paid as normal upon receipt of this season’s wool.

However, while the average will be 32p, some mountain and hill breed wools will achieve 15p per kg and some finer white wools more than 70p per kg.

This compares to last year’s prices for the 2019 wool clip which saw Suffolk wool at 60p per kg; Romney 75p per kg; Texel/Lleyn at 66p; Mule 67p; Cheviot 92p; Welsh 30p; Radnor 56p; Swaledale 30p and Blackface at 45p per kg .

With no advance against the 2020 clip, British Wool is only paying a balance for the 2019 clip as normal, and is not issuing breed prices in the format they normally do.

British Wool said this year’s payment is in line with those paid in the late 2000s, at the time of the financial crisis.

“The hard fact is that the global cross-bred wool market will be extremely challenging for the foreseeable future.

“Wool producers can however, be assured that British Wool, as a trusted partner, will be at the forefront of leading the growth and renewal of wool values, but this will take time.

“We will emerge stronger from this period, so long as UK wool producers stay together and continue to back their organisation, British Wool,” said the spokesperson.

National Sheep Association chief executive, Phil Stocker, added that while it is not clear how the reduced value of the remainder of the 2019/20 clip would affect the overall value of a farmers wool delivered last year, it would be easy to assume total fleece values might be down by 50%.

“Cash flows will be affected, and many farmers will be faced with a bill from their shearing contractors but with no income to offset that.

“Although there are plenty of sheep farmers who do get real value from their wool, most will at least expect it to cover shearing and wool handling costs.

“A fall of 50% of total value would, for most, mean total income not clearing costs,” said Mr Stocker.

“NSA understand fully the reasons behind this situation. A lot of work has gone into increasing demand and values for wool and this will set things back.

“We are disappointed that British Wool, being treated as a Government Arm’s Length Body, has reportedly been unable to access the Governments Covid-19 support schemes which will have had a big bearing on British Wool’s decisions,” concluded Mr Stocker.