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Wool News: Basics in our favour as world wakes up to wool
1 July 2021

Wool News: Basics in our favour as world wakes up to wool

Coarse wool growers have faced a stark fact in recent times: revenue from wool does not cover the cost of growing, harvesting, packaging, transporting, and selling their clip. Recent price improvements have lifted some growers to either “break-even” or slightly “in the black” levels.

This hard truth is only softened by dual-purpose breeds offering income balance due to current favourable lamb and mutton returns. However, the question remains: does continuing along the same path offer long term viability?

In the 1990s New Zealand wool was considered a sunset industry. Back then that seemed harsh, particularly as previous price collapses were routinely followed by better than anticipated recoveries. However, while crossbred B grade fleece wool had rallied to 600 cents plus per clean kilogram around five years ago, returning growers around 450 cents greasy before costs, corresponding prices have until very recently, been hovering around 240 cents per kilogram clean, or approximately 180 cents** greasy: this at a recent auction quoted by brokers and exporters as in ‘seller’s favour.’ Noting lesser grade wool plus associated oddments are discounted, clearly a substantial gap prevails between cost and return for coarse wool growers.

We all know it is a long game. Most farmers understand agriculture’s many swings and roundabouts, alongside trends within different sectors. Whether you produce seed, cereal, stock feed, meat, wool, velvet, flowers, timber, fruit, or whatever, returns depend on demand, usually driven by need rather than desire, based on the end consumers’ financial capability.

Globally ours is a premium product: even if they want it, not all can afford wool. Decades of New Zealand sheep farming and investment in breeding have ensured dual purpose animals that optimise wool and meat production. While present coarse wool returns are unbelievably poor, genetic structure and production from those breeds is pretty darn good!

As understanding grows around how beneficial our fibre is to health and wellbeing, wool’s profile is being re-evaluated, see here: https://youtu.be/CAaOBsBIf5s. Although within the industry we understand wool’s benefits, the next generation is consumed in a synthetic world. Reacting against the true costs of that, they seek to know more about wool. Thankfully, this global re-invention seems to be working as various wool industry and market-led organisations have begun focusing on our fibre’s natural, renewable, sustainable and traceable characteristics, along with its health and wellbeing qualities. Introduced by wool brokers and marketers in recent years, quality assurance, traceability and integrity programmes position New Zealand wool favourably to capitalise on reviving markets.

So the moral of the story is: hang on in there, our future is better than this.

** Note 30th June 2021 level is approx 290 cents per kilogram clean or 215 cents greasy.

 

Rob Cochrane
Wool Procurement Manager
PGG Wrightson Wool

 

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Wool News: Wool joins NZ Farm Assurance Programme

01 July 2021
Wool recently became part of the New Zealand Farm Assurance Programme (NZFAP), providing the sector a simple process to verify product credentials.

PGG Wrightson and wool export subsidiary Bloch & Behrens are among the first to join the NZFAP wool programme, which already covers approximately 95 per cent of New Zealand sheep, beef and deer farmers.

Jason Everson, PGG Wrightson Wool Product and Innovation Manager, is a member of the Wool Technical Advisory Group that helped NZFAP bring wool on board. He says quality assurance will now cover growers’ wool, as well as their meat production.

“Formally aligning to the NZFAP helps the global marketability of New Zealand wool. 

“Although no extra compliance or cost is involved for wool growers, farmers will need to know their NZFAP Assurance number and to maintain product integrity ensure they maintain separation between wool from assured livestock compared to non-assured stock.
There will be communications around this in the near future.

“When future versions of the NZFAP are revised, wool also now has a voice,” he says.

Established by the red meat sector and the Ministry for Primary Industries in 2017, the NZFAP provides a single harmonised farm assurance standard for red meat, replacing the ten or more different standards developed by individual meat companies that previously prevailed. It covers practices and issues relevant to the market including origin, traceability, biosecurity, animal welfare, the environment and sustainability.

The NZFAP is today owned and managed by New Zealand Farm Assurance Incorporated (NZFAI) with all farms independently verified by AsureQuality. 

Approximately 25 wool companies have so far joined NZFAP, including brokers, merchants, exporters, scours, test houses and retail brands.

Livestock Report: Lamb prices on the rise

08 July 2021
Listen now as The Country’s Jamie Mackay is joined by PGG Wrightson’s Mid-South Canterbury Livestock Manager, Joe Higgins, to talk about New Zealand’s livestock market.
It has been a month since the Canterbury floods and the recovery has been progressing slowly. Higgins says that some areas, especially around the gorges, look like they will still be fixing up the damages until November-December of this year.
Mackay asks about yesterday’s Inland Ewe Fair and with the high prospects around lamb, the prices would have been buoyant. Higgins thinks that Inland Ewe Fairs are a thing of the past and that 10-15 years ago there would have been two sales a year processing 20,000 sheep, but yesterday’s one only mustered up 4,000.
Mackay notes that buyers are effectively getting 2-3 inland ewes for the price of one, and that the majority are scanned so farmers know what they are getting. Higgins adds that there was one pen that topped the sales at $278 NZD and they scanned in at 237%.
Livestock product’s instore prices have strengthened over the last month, especially with cattle. Higgins adds that limited space for processing cattle has slowed, resulting in a backlog since January. Higgins has a gut feeling that lamb prices will increase heading into the spring, and sit around $9 per kilo. 
Mackay adds that there is a dog sale in Mayfield, mid Canterbury, tomorrow. Higgins adds that prices are starting at $2,000 and can go up to $8,000+, and the sale process are entertaining to watch and beneficial for the breeders.  
 

Livestock Market Update: Winter arrives in North Island

08 July 2021

A couple of weeks after a reasonable drop of rain in most districts, winter hit the North Island in late June with a strong polar blast dropping temperatures to low single digits. Underfoot conditions became sloppy and the weather caused several road closures.

Moisture was particularly welcome in Hawke’s Bay, under pressure following an extremely dry summer and autumn. While the region has developed a pleasing green tinge, the resumption of warm conditions is necessary to facilitate additional pastoral growth through the rest of winter to help these farmers back on track.

North Island livestock sales have been strong recently, including bull sales.

East Coast bull sales in late June were particularly strong. A determined bench of stud and commercial buyers from across the country, competing online and in person, made for some solid averages. A highlight of the week was when Kaharau Angus notched up a record on-farm auction price for a bull at $106,000.

In Northland the dispersal sale of one of the original Wagyu herds attracted plenty of attention. NZ Purebred Wagyu Ltd, founded by the late Mike McCool with the first Wagyu calves born in 1992, sold 562 head of Wagyu in late June. Held at the Wellsford Saleyards under the expert supervision of Richard Healey and the Northland PGG Wrightson Livestock team, cattle sold included yearling heifers, sire bulls and steers. Purchasers from throughout the country attended, in person and online via bidr®, with significant numbers of stock heading to the South Island. Cows sold at up to $3350. A further 450 head will go to auction next autumn, which will mark the end of an era for the McCool family.

Elsewhere the schedule is driving lamb tallies through the sales, resulting in the strongest North Island lamb prices seen for some time, while the wetter underfoot conditions and strengthening schedules are resulting in tallies of heavier store cattle coming to market.

Matt Langtry, PGG Wrightson North Island Livestock Manager

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