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Wool News: Wool joins NZ Farm Assurance Programme
1 July 2021

Wool News: Wool joins NZ Farm Assurance Programme

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.

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Wool News: Staff profile: Sir Palle Petersen - honoured to serve wool and Denmark

01 July 2021

Pictured above: Sir Palle Petersen and Denmark’s ambassador to Australia and New Zealand Pernille Kardel.

Charged with responsibility for leading PGG Wrightson’s wool exports, Sir Palle Petersen has ideal credentials for the role.

Growing up in Denmark, on leaving school Palle joined Danish wool trading company Bloch & Behrens, as he explains.

“After four years in Germany in their small Munich office, Bloch & Behrens sent me to New Zealand on what turned out to be a one-way ticket. That was in 1988. I married Rachel in 1991 and have been here ever since,” he says. 

Several changes have taken place in the meantime.

“When faced with the imminent closure of the company in the late 1990s my initial brief was to wind up the business, though I had other ideas. I was lucky to be given the opportunity to pick up what was left of Bloch & Behrens NZ, in partnership with well-known Ashburton wool merchants the Woodham family. My old boss said it was a waste of time, and don’t bother with it. However, I took great pleasure in working hard to re-establish the relationships we had with customers throughout the world, turn the company around, and prove a few people wrong.

“In 2008 we were sold to PGG Wrightson and became the export arm of this company’s wool brokering division. This is an excellent fit for all parties, giving us the opportunity to bring growers closer to our international customers and vice versa,” he says.

Managing Bloch & Behrens NZ encompasses several challenges.

“Making a profit, managing risk and balancing the need to pay growers the best return we can, while also achieving the best possible market price, certainly makes life interesting.

“On the way through there have been plenty of highlights. Introducing the Wool Integrity brand is definitely one, taking us beyond being simply a commodity trader. 

“Establishing ourselves with some niche type businesses has also been rewarding. Creating a market for Certified Organic New Zealand crossbred wool is part of that. Having built a network of loyal organic growers, and establishing a close partnership with one of our key customers, we are now paying these growers around double the price for their organic crossbred wool that conventional growers earn. These growers are passionate about the impact their farming has on their land and their families. Organic farming is no easy road: we are hugely proud to support such committed farmers,” he says.

Outside work Palle has been Denmark’s Christchurch-based Honorary Consul since 2012, a role that involves assisting any Danish citizens in the South Island who require help.

“I’ve organised repatriation of the bodies of Danish people who have died here, though mostly it involves replacing lost passports or minor translations. We did have one young Dane hunting on the West Coast who shot a blue duck and ended up in court. He shot the duck when it landed on a lake, and a couple of DOC officers were passing while he was fishing it out. He didn’t realise he had done anything wrong and they didn’t say anything at the time, though a few weeks later he received a message asking him to call in at the DOC Wanaka office. When he turned up, he was summoned to court. It cost him $10,000, which was an expensive mistake,” he says. 

Palle’s service to Denmark was recently recognised with the Ridder of Dannebrog knighthood, which dates back to 1671 and was awarded in ceremony by Denmark’s ambassador to Australia and New Zealand Pernille Kardel.

Palle and Rachel have three adult daughters, Emma, Sophie and Pia (pictured below), and live in an historic homestead on a Price’s Valley lifestyle property, near Little River on Banks Peninsula. 

Wool News: Palle with Family

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

01 July 2021
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

 

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.  
 

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