FOOT-and-mouth is hitting the British Wool Marketing Board and its producers hard.

The board's 19 depots have effectively been closed for four months; with wool collections in infected areas suspended. A lack of information has made it difficult to plan sales, depot collection, haulage and staffing.

Costs, which have been dropping in recent years, are expected to rise from 18p/kg to about 20.5p/kg.

Wool collection will be spread over a longer period this year.

The code of practice agreed with the government means the board will have to store wool for at least two months before delivery to a buyer, to ensure eradication of the virus.

The board says its cashflow position, already stretched by the crisis, will be severely affected by the delay in delivery.

Producers will, however, be paid an average of 42p/kg - the full balance payment from last year and a reduced advance payment because of the uncertain situation. The full balance payment will be paid next year.

The board has asked producers whose sheep have been culled to inform its registration department so that arrangements can be made to pay all the due balance payments as soon as possible.

The board has arranged to handle and auction wool from organically accredited farms separately, although no standards have yet been established for its production.

It will be handled in new, coloured wool sheets, graded in the normal way, with the new code G applied, and offered in separate lots at the end of an auction.

Although organic products are generally expected to attract higher market prices, it may not be so with wool, where characteristics of the fibre may be of more significance to a buyer.

Since the outset of the crisis, the board has aimed to ensure a consistent supply, to maintain demand and prevent any extreme price fluctuations. It has achieved that by reducing the amount allocated to each sale and so extending the selling season until new stock was available.

Despite initial worries about supplies, because of the strength of sterling, especially against the New Zealand dollar, prices have been reasonably constant. Over the last season they have varied only about 10pc and the sale average has not exceeded 72p/kg. It is not expected to change much for the foreseeable future