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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

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

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

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Wool News: Northland couple with novel use for Romney wool

A Northland couple on a farm that has been in the family since the early 1870s have found an innovative new use for the wool grown by their Romney flock.

Sarah Hewlett is the sixth generation of her family on 230 hectare Hewlett Point Farm, on the southern shore of Whangarei Harbour at Mata. As she explains, the acoustic properties of wool are not well recognised, which she and husband Chris Coffey aim to change.

“I used to design clothing and have been playing around for a few years using felt. We came across a felting machine in Auckland and started thinking about wool for acoustic insulation. 

“Research showed us that acoustic effectiveness varies according to different factors such as density and design. Wool can be as effective as synthetic materials at absorbing sound, though without the micro-plastics, and with all the positive qualities of wool such as absorption of volatile organic compounds and fire resistance,” she says. 

They now have a product: aesthetically attractive, natural, sustainable, zero-waste sound absorbing panels, suitable for use in homes, offices, restaurants, hotels and buildings including libraries and museums. Their next step is to commercialise it.

“We have worked with Marshall Day, an Auckland acoustic consultancy, as well as AUT, though want to buy our own machinery as at the moment we need to go to Auckland for that, which is not so easy from the farm. Once we have a machine we can do a whole lot more, and want to maximise the absorbency of the product.

“We also need to achieve certification from BRANZ to enable what we are making to be used in commercial buildings. That is expensive, though hinges around fire resistance, which is a natural quality of wool, of course,” she says.  

In the meantime they entered ‘The Pick,’ a Northland business innovation competition, winning the rural section.

PGG Wrightson Far North wool representative Lance Paganini has a long association with Hewlett Point Farm, providing Sarah and Chris with guidance around product development for their wool acoustic insulation products, and making sure the rest of their wool gives them the best possible return.

Hewlett Point Farm runs 500 Romney ewes, currently crossing them with Poll Dorset rams for lambing, although Sarah and Chris’s nine year old son Jasper is experimenting with the Beltex breed. They also have 50 breeding cows and buy in weaners to fatten approximately 100 beef cattle each year, adhering to a regenerative farm system across all their land use, with natural fertilisers and chemical free products.

Pictured below L-R: PGG Wrightson Far North wool representative Lance Paganini, Chris, Sarah and family.

Wool News: PGW Wool Rep Lance Panganini, Chris, Sarah and family

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Wool News: National Shearing Sponsorship Renewed

Pictured above: PGW Wool Product& Innovation Manager, Jason Everson and National Shearing Circuit chair, Warren White.

PGG Wrightson recently renewed its sponsorship of the National Shearing Circuit for the next three years.

Pitting the top shearers against each other based on versatility, the circuit is second only to the Golden Shears in terms competitive shearing prestige.

Shearers compete for points over five rounds, starting in Alexandra in October with the fine wool section; moving to full wool hoggets in Waimate; Corriedales in Christchurch in November; lambs in Rangitikei on Waitangi Day; and concluding in Pahiatua later in February with second shears. Based on points earned through those five rounds, the circuit final is fought out in Masterton by the top 12 shearers on the eve of the Golden Shears.

National Shearing Circuit chair Warren White says it is immensely satisfying to have the event under way again after last year’s covid disruption.

“PGG Wrightson has been on board as a sponsor for 18 years now. We are delighted to extend what has been an excellent and enduring relationship. As a sponsor they have been fully committed to helping keep the circuit afloat, particularly under the challenging circumstances we faced last year. This year we are back in force, with what promises to be a high quality showcase of the country’s top talent on the boards, and an outstanding test of the skills and versatility of some of New Zealand’s most accomplished shearers,” he says.

Established in 1973 the circuit is approaching its fiftieth anniversary. Continuing its relationship with the event that began in 2003, under the current arrangement PGG Wrightson is co-sponsoring with animal health product manufacturer Nexan, meaning the event will be titled the PGG Wrightson Vetmed National Shearing Circuit.

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Wool News: Market Report - Crossbred prices recover to pre-covid levels

Through the few months to the end of the 2020/21 selling season wool prices largely recovered from the unprecedented lows they sunk to when the global covid lockdowns first affected the supply chain. Prices for crossbred wools have risen around 55 per cent, back to levels close to the same period two years ago.

Driving this recovery demand has been forthcoming from all quarters, including domestic and international buyers, particularly Europe, where second shears are sought after for the carpet and flooring markets. Meanwhile manufacturers in New Zealand wool’s two largest export markets, China and India, are maintaining steady interest. Although China continues its role as the dominant buyer of New Zealand wool, historically procuring between 45 to 55 per cent of the volume sold, Chinese buying power has scaled back by around 35 to 45 per cent over the past 12 months, with buyers from India taking up that part of that market.
 
At the season’s final North Island sale in Napier a full clearance was recorded, accounting for approximately 10,000 bales. At the prices offered growers are motivated to take the returns available, and buyers are enthusiastic at the excellent quality of wool coming forward to the market late in the season. Spirited bidding from all exporters drove the internal market crossbred indicator up by 18 cents at this particular sale.
 
Prices for Australian fine wools have also lifted considerably over the last three months, with the world placing a premium on natural, biodegradable fibre.
 
One exception to the general welcome trend of buoyancy for wool is half bred wools, particularly at the stronger end. This absence of pricing traction is largely driven by lack lustre demand for the end uses of half bred wool, such as in upholstery, where the global commercial market for such products, including to go into planes and hotels, remains sluggish.
 
Into the 2021/22 selling season growers can look forward with some confidence, albeit demand for crossbred wool needs to grow considerably more for returns to significantly contribute to farm profitability.

Grant Edwards
Wool General Manager

 
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Wool News: Trust dedicated to helping rural people

With drought, floods and tornadoes wreaking havoc in various regions recently, farmer well-being is a vitally important topic.

Even at the best of times farming can be stressful, which is where the Rural Support Trust is ready to step in.

A team of rural people whose aim is to help those most in need, the Rural Support Trust’s trained facilitators travel to wherever they are required. Contact is one-on-one, services are free, confidential, and available to anyone who makes the majority of their income from primary industry.

During and after an adverse weather or environmental event the Trust works with Civil Defence to provide information and access to emergency or ongoing aid, such as stock rescue; access to rural assistance payments; labour; and whatever else might be required.

Local rural people know from experience that severe weather, finances, relationships, and work pressures can mount up. Via the Trust they are on hand with the networks and training to help in all kinds of situations, and to point struggling farmers in the right direction to assist them in overcoming personal or financial challenges. 

Contact the Rural Support Trust any time. Call 0800 787 254 (0800 RURAL HELP), or www.rural-support.org.nz for a confidential chat about you, your business, the weather, your finances; or a neighbour, partner, friend, family member, or worker.
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Wool News: Fine wool auction going on the road

Last year due to Covid the New Zealand Agricultural Show was cancelled. This year, all being well, the 159th edition will take place in Christchurch in the second week of November. For the past few years the South Island wool sale has left the PGG Wrightson auction room for a single day, to be conducted fully on display and in the public gaze as part of the South Island’s biggest agricultural event.

This year the buyers, samples and auction officials will again make the four kilometre trek to the Canterbury Agricultural Park, and the drama of the wool auction will play out in the public domain for all to witness.

Fine wool will be the sole focus for this auction, with a minimum of 700 bales of the highest quality merino fleece required to make it worthwhile for buyers to step out in public and go into battle at the auction. 

This is an excellent event to be part of: each time the auction has gone on the road the outcome has been more than satisfactory, and the most successful sale on the annual calendar. In 2019 the sale was well supported, the viewing gallery was standing room only attracting wide interest from wool growers and the general public, a number of fine wool growers held wool back for this particular sale, and a total of $7.2 million dollars was turned over in the five hours of selling.

Fine wool businesses and high country runs farming merinos have a great opportunity to raise their public profile in a setting where the theatre of the auction is on display. Growers seeking to offer their clip at this event, on Thursday 11 November, should contact their PGG Wrightson wool representative or Dave Burridge, PGG Wrightson Wool South Island Auction Manager on 03 343 8094 or 0274 793 779.
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