What does the Chinese stock market have to do with the success of Wyoming sheep ranchers? Quite a bit, as I learned at the recent mid-year meeting of the Wyoming Wool Growers Association.
Speaker Larry Prager of Center of the Nation Wool spelled out the China-Wyoming wool connection. The United States has enough capacity to process 12 to 15 million pounds of wool each year. The U.S. produces about double that amount annually. The half that cannot be processed here is exported. The largest export destination for US wool has been China, followed by India. With the exception of 2014, China usually accounts for over half of US wool exports.
China consumes a lot of wool. It makes the rest into products for re-export abroad.
Australia is a big wool producer with 70% of its production shipped to China. Australia has a weekly wool auction. This sets the price for wool world-wide.
If the Chinese stock market melt-down slows China’s spending at the wool auction, prices fall and the impact is felt immediately here in the Cowboy State.
Additionally, American wool prices are pegged to the Australian dollar. The weakening of the Australian dollar, and the strengthening of the U.S. dollar has negatively impacted domestic wool producers.
We do indeed live in a global world economy.
Other panels addressed lamb carcass pricing and the myriad of business risks facing the industry.
All employers face daunting regulatory challenges from the current administration in Washington – few more so than the sheep industry. Concerns addressed include: grazing allotments, efforts by the federal government to control Wyoming water and land as well as threats from environmental rules. Migrant work visas, too, are a concern.
38% of sheep in America are tended by sheepherders from south of our border. In a rare instance of an immigration policy that works these folks come in on an H2A visa, work for months and then go home for the rest of the year. Seems like Washington ought to be happy with that one – right?
Not so. The Obama administration is renewing this visa program only on condition of tripling – – that’s right, tripling – – the required wage. Not only does that hurt woolgrowers, but it likely will mean the end of employment for these itinerant shepherds.
Hopefully, we’ll soon see a change in Administration that will reverse this atmosphere of hostility toward employers, agriculture and the West.
The Woolgrowers invited me to recognize my efforts in the Legislature on behalf of private property rights, and it was my pleasure to spend the day learning much more about this vital segment of Wyoming’s economy. My many thanks to Amy Hendrickson and the Wyoming Woolgrowers for the opportunity to listen and learn.
Dave Kinskey represents Wyoming Senate District 22, consisting of Johnson County and eastern Sheridan County. A businessperson, Kinskey is the former Mayor of Sheridan. He can be reached at [email protected] or by phone at 307-751-6428.