Sheep farmers selling their clip through British Wool will see returns 25% down on 2022 values due to cost inflation experienced by the wider industry, creating ‘significant difficulties’ in the marketplace.

Following last year’s 135% increase in wool prices paid by the marketing board, Andrew Hogley, CEO of British Wool, told The SF that a total of £6.6m will be paid to members this year, compared to £8.4m in 2022.

Exact prices will depend on grade and type of wool, with members receiving a personalised letter in the coming weeks confirming the total value of their 2022 clip. Core grades (Texel cross and Mules) are valued at 30p per kg, with Blackface at 20p/kg, Welsh Mountain wool at 10p/kg and 8p/kg paid for Swaledale.

Fleeces from organic flocks will however, attract a 70p/kg premium for core types and 20p/kg for Welsh Mountain type.

“We understand that prices will be disappointing, particularly on the back of falling lamb prices and other difficulties in the wider industry. We are frustrated too,” said Mr Hogley, who pointed out that the 2022 clip totalled 23.3m kg – up 1% on the 23.1m kg handled the previous year.

“Global prices have been under pressure in recent months and this, alongside the cost inflation experienced by the wider industry, has created ‘significant difficulties’ in the marketplace.

“As a farmers co-operative, the returns we offer our members are determined by the value we can achieve for the wool we sell on their behalf and the costs of bringing that wool to market,” he said.

Mr Hogley said there had been positive signs of a recovery in the market after the devastating impact of Covid. Nevertheless, the war in Ukraine and subsequent spike in energy prices reversed much of those improvements. High energy costs and reduced consumer confidence had led to a very challenging environment for all raw material suppliers including wool.

“The impact of high energy prices on the cost of processing wool has been enormous. Commercial scouring tariffs have increased by 30% over the past 12 months which combined with increased haulage rates and diesel prices have been a significant challenge to the business,” he said.

British Wool has however, still been able to sell at prices comparable to those in New Zealand.

Mr Hogley concluded: “We are optimistic about the future and believe there is much to be positive about. Our focus on the environmental and sustainability credentials of British wool is gaining traction.

"Over the past year, the number of brands with verified British wool product ranges has increased to more than 100.” These include Woolroom bedding and duvets, Harrison Spinks mattresses, John Cotton Snuggledown and Slumberdown brands of bedding; Kingsmead carpets and Agnella rugs.

“Increasingly we are seeing manufacturers willing to pay a premium for traceable British wool and we have invested in our systems that give full traceability back to the farm.”

Exploring new uses and markets is ongoing too, however he warned that British Wool is only 2% of the global wool supplied and a stronger market and for more brands to specify British Wool in their products, is what ultimately is required.

As of the middle of May, 86% of the 2022 clip has been sold, with the bulk of the remaining stock being kept through until June to ensure a year round supply, before new season clip becomes available in July.

The majority of British Wool is sold to UK companies that process the wool in the UK. It is estimated that 15% is exported to China prior to processing with 25-30% exported as processed wool.