SHEEP skin values have almost doubled in the past 12 months with the best Merino pelts now making more than $20.
The National Livestock Reporting Service last week quoted the best Merino skins selling up to $20.50, while crossbred skins fetched up to $8.50.
At Bendigo on Monday, Merino skins sold to a top of $25.
Similar skins were making about half this value a year ago.
The surge in prices is adding to sheep producers' returns, with some skins now contributing to about 20 per cent of the value of stock sold.
Meat and Livestock Australia meat market analyst, Tom Morgan, said skin and hide prices had crashed last year, with a big drop in demand due to the global financial crisis.
"Demand has definitely recovered and continues to do so from a year ago, when demand for some of the end products of hides and skins suffered from the unprecedented financial crisis," Mr Morgan said.
"This caused a huge slow down in manufacturing, resulting in a steep drop in prices back at the processor level for hides and skins."
Mr Morgan said prices could "not have got much worse" than they were a year ago.
He said the situation was made worse by the fact that many traders already had stocks of skins on hand when the crisis hit.
"A lot of traders and importers were caught with high inventories which they had bought at higher prices," he said.
Credit problems with some of the major skin-buying countries, especially Russia, did not help the price crash.
But the picture is brighter now, as the financial situation improves in some countries.
Adding to the price rise is a tighter supply of sheep skins as the resurgent demand must contend with smaller numbers of skins.
Mr Morgan said the best prices were being paid for Merino skins with long wool length.
The NLRS said three-inch (7.5cm) Merino skins from sheep 20-24kg made between $16.50 and $20 last week, compared to $7-$11 a year ago.
Skins from bigger Merinos, more than 24kg, attracted the highest prices of $17-$20.50, compared to $8-$12.50 during the corresponding week last year.
"A longer Merino sheep skin is more expensive, as it is suited to a wider range of purposes than a shorter skin," Mr Morgan said.
Meanwhile crossbred skins have shared in the price rise, though have not risen as significantly as Merino values.
The NLRS said the best crossbred skins made up to $8.50 last week compared to $5.50 a year ago.
