Perfect storm shows sheepmeat challenges

A report from Rabobank shows the challenges facing the sheep industry:

The New Zealand sheepmeat industry has been riding a ‘rollercoaster of returns’ in recent years, according to agribusiness banking specialist, Rabobank. A perfect storm of high supply, strong local currency and weak consumer demand has reduced returns and some key challenges must be addressed in order to secure a prosperous future for the sector.

In its recently released report ‘Sheepmeat – riding the rollercoaster of returns’ reviewing the sheepmeat sectors in New Zealand and Australia, Rabobank says in order to capitalise as conditions improve in established export markets, the sector will need to retain sufficient scale and market presence relative to competing meats.

Rabobank CEO New Zealand Ben Russell says the industry has experienced extreme volatility in returns throughout the value chain, and that is likely to continue with an expected supply shortfall looming in the coming season.

“The New Zealand sheep flock has been declining in size for many years with the drought and lower prices last season likely to see that trend continue next year,” he said.

“The shrinking flock has created structural over-capacity that will need to be addressed, however there are risks and practical challenges in achieving this that need to be carefully considered by processing companies.

“Ultimately the path to greater industry prosperity and growth is creating more value for consumers and a more efficient supply chain, including on-farm, procurement, processing and marketing.”

Better returns for sheep farmers depend not just on better prices for meat, it requires better returns for by-products including wool.

New Zealand’s sheep industry started to produce wool. The introduction of refrigeration enabled meat to be exported too but wool was still an important part of sheep farmers’ incomes.

Two or three seasons ago strong wool prices were reasonable but they’re fallen away again and that is one of the reasons sheep farmers’ incomes have slumped.

Notwithstanding the challenges facing the sheepmeat industry, Mr Russell says Rabobank remains enthusiastic about the long-term potential for the sector in New Zealand, and working alongside its clients throughout the supply chain to capitalise on future opportunities.

Report author, Rabobank animal proteins analyst Matt Costello says that, given the sector’s exposure to and reliance on export markets, and the fact that sheepmeat is a higher valued product, the sheepmeat industry is dependent on the economic environment and consumers in these markets.

“Market demand for sheepmeat has been subdued as a result of higher prices and fragile economies, especially in Europe, whereas Asia and the Middle East have emerged as stronger markets and should be cultivated,” he says.

“With an improving outlook in some of the lucrative sheepmeat export markets and with the optimism surrounding the potential of developing markets such as China – New Media Release June 3, 2013 2
Zealand and Australia will be the only countries positioned to supply consumers around the world.

“It is increasingly important that the sheepmeat sector retains significant scale and market presence in comparison to competing meats to remain viable and capitalise on the longer-term growth opportunities.”

Part of the problem in New Zealand isn’t competition from other meats in export markets, it’s competition for land from dairying.

Dairy returns are better and improving which has pushed up farm prices. Growing demand for milk can support the increase in prices, volatile returns for sheepmeat can’t.

The big ‘dip’

The Rabobank report finds that the variation in returns for sheepmeat producers and exporters over the past few years has been significant, with “unprecedented” volatility.

Mr Costello says there is a lack of confidence among producers across the sheepmeat industries in both countries.

“The extreme high and low points over the past few years have not helped anyone, only serving to add to frustration and disillusionment,” he says.

“In simple terms, historically tight supply from both New Zealand and Australia underpinned the initial surge in livestock prices during 2010 and 2011, and the ensuing weak prices through 2012 and 2013 have been driven by higher short-term production due to the extremely dry conditions across both countries.”

While tighter supply in 2013/14 will assist to firm pricing over the coming year, a more sustainable market recovery will need to be driven by improved consumer demand and ultimately a more buoyant global economy.

Sheepmeat isn’t a traditional food in many parts of the world but the demand for protein from developing countries might help that.

Emerging markets

Globally, rising prices have been met by stubborn consumers in the major sheepmeat export markets of the EU, UK and the US. The emergence of developing markets throughout Asia and the Middle East has helped to offset the declines in volumes and, to a lesser extent, returns from the traditional export markets.

Not only is weak consumer demand impacting returns for the industry currently, but a persistently high exchange rate has also been challenging both countries.

Even with a slight fall in recent weeks, the prolonged high dollar in both New Zealand and Australia has been pressuring competitiveness in the global market, resulting in substitution and weaker export demand for sheepmeat, the Rabobank report says.
China, the report says, is a good example of the emerging market demand for sheepmeat.

Mr Costello says China became the largest single sheepmeat export market for New Zealand in 2012, surpassing the UK for the first time ever. Furthermore, China is now Australia’s largest sheepmeat export destination. Media Release June 3, 2013 3
“The emergence of China has seen a much greater utilisation of the whole carcass as demand has grown for items that were once rendered or offloaded at a discount and sheepmeat demand is expected to grow as affluence continues to increase,” Mr Costello says.

Utilisation of the whole carcass helps returns.

If only we could persuade the Chinese to embrace wool as well . . .

Wool wonderful for rebuild

The closure of Oamaru’s woollen mill is due to several factors, among which is the decline in demand for wool carpets.

Why it is so difficult to sell a product which is natural, renewable, sustainable and grown on free-range animals in a world which is increasingly demanding such things is beyond me.

But the Christchurch rebuild could provide an opportunity to put wool to the fore on floors again.

With over two million square metres of floorcoverings needed for the Christchurch rebuild, Federated Farmers believes strong wool should be given a leading role.

“If the Christchurch rebuild does not bring woollen floor coverings to the fore, then how can we expect the rest of the world to do the same?” says Jeanette Maxwell, Federated Farmers Meat & Fire Chairperson.

“Late last year, we asked the Canterbury Earthquake Recovery Authority (CERA) what demand it projected for floorcoverings. The answer is a staggering two million square metres.

“That is enough to line every square centimetre of a country the size of Monaco.

“According to CERA, some 200,000m2 of floorcoverings are needed each quarter for the Christchurch rebuild. This demand exists right now and will last through to the third quarter of 2014, when demand will start to reduce.

“Farmers are not looking for a hand out but a fair go for wool that is grown and processed here. If you want to help your fellow Kiwi on the farm or working in wool processing, then specifying wool for the home or office is the way to go.

“It is a lot better environmentally than putting oil-based carpets down.

“We also asked CERA if it had any forecasts for insulation demand in the Christchurch rebuild, split by synthetic, glass fibre and natural fibre.

“Sadly, there does not seem to be and that makes me wonder if wool insulation is being overlooked.

“It is here that we need the Ministry for Primary Industries to work within government to get wool fully into the rebuild; both as a floor covering and as an insulation product.

“If there are blockages then Federated Farmers wants to know so we can help unblock them.

“Out of the tragedy of these earthquakes we have an opportunity to show just how versatile natural fibres like wool can be. Being a Cantabrian, I know Christchurch will become one of the most dynamic and progressive cities on earth.

“That is why we are so keen to get Kiwi wool well inside it,” Mrs Maxwell concluded.

More than two million square metres of floorcoverings  would use a lot of wool.

There’s an opportunity here that must be pursued because, as Mrs Maxwell says, if we don’t use wool we can hardly expect the rest of the world to.

His Royal Woolliness

Federated Farmers reckon wool is getting its mojo back:

Federated Farmers is convinced wool is on the cusp of a renaissance, that will kick off Monday in the presence of HRH The Prince of Wales

“Since the Shear Brilliance event takes place at the Cloud in Auckland, you can say our industry has a silver lining,” says Jeanette Maxwell, Federated Farmers Meat & Fibre chairperson

“It is significant that the Federated Farmers Meat & Fibre Council has resolved to publicly support the Campaign for Wool, of which, HRH The Prince of Wales is Patron.

“Natural fibres, like wool, are the most sustainable things we can put into our homes and businesses, or on ourselves for that matter. The global wool industry has been on the back foot and as farmers, we realise the need for us to get on the front foot. . .

The Shear Brilliance takes place Monday, 12 November at the Cloud in Auckland.

It will see a spectacular display of wool innovation, showcasing the properties of wool to over 200 invited guests including a large contingent of architects and major business influencers to spread the message about wool. . .

Wool is a natural, renewable product which, at least in New Zealand, is grown by free range free range stock.

That ought to tick so many feel-good boxes it should be selling itself untroubled by competition from synthetic alternatives.

Unfortunately too much of the world has yet to realise its benefits but with Prince Charles as His Royal Woolliness championing  it, wool might really be about to reclaim its mojo.

Wool carpets grow greener

Wool is the quintessential green product – natural, renewable, breathable, fire resistant and – at least in New Zealand – grown on free-range sheep.

The fire-resistance makes wool carpets popular in aeroplanes.

Even without that, the other factors ought to appeal to consumers with a green conscience and a New Zealand company has developed something to make wool carpets tick another environmental box:

Carpet manufacturer Cavalier Bremworth has unveiled a world-first carpet backing product it hopes will secure its environmental footing in the market.

It will reduce around 1200 tonnes of waste from landfills each year because it’s made by recycling your old carpet – but only if it’s made from wool. 

It looks like regular old carpet, but replacing the usual jute backing with a recycled wool product has taken two years of development, so Cavalier Bremworth is quite excited.

“Jute is an imported product and it has variable supply and cost,” says Desiree Keown, Cavalier Bremworth marketing manager. “We’ve now secured a product made entirely in New Zealand using New Zealand labour, made entirely from New Zealand recycled carpet so it’s a perfect story.”

It is estimated Kiwis dump 5000 tonnes of carpet in landfills each year. Synthetic carpet takes 50 years to break down – even pure wool takes a year.

But Cavalier Bremworth will slash that waste by a quarter. It plans to recycle 1200 tonnes of old wool carpet, turning it into new carpet backing.

Natural, renewable, breathable, fire resistant,  grown on free-range sheep, using recycled material that reduces waste – how hard can it be to sell that?

 

Rural round-up

Contamination claims rubbished - Richard Rennie:

Taranaki farmers and their regional council are demanding critics of an oil and gas drilling method show more science to prove claims about damage to their environment.

“Fracking” or deep rock fracturing for extraction of hydrocarbons in under scrutiny in Taranaki following claims by an environmental group the practice is responsible for ground water contamination, water table loss and even earthquakes . . .

Interested in more than rugby - Jackie Harrigan:

Scoping out opportunities in the New Zealand dairy industry was fitted in around rugby fixtures by a handful of Argentinian farmers in the Manawatu for the Argentina vs Georgia pool match.

Taking the opportunity to network with Kiwi agricultural businesses, the Argentinian farmers were hosted by the NZ Agribusiness Roadshow and shown facets of Kiwi pastoral farming which fitted their individual interests.

One Argentinean who visited was Miguel Rohrer, a beef and cropping farmer who grows soybean, corn, rice, peanuts and beans alongside dairy units running 1200 Holstein cows. Cows are generally run at lower stocking rates than New Zealand at around 1.5cows/ha and fed mainly on alfalfa with grain supplements to produce around 26l/cow/day . . .

Lamb docking a community affair – Jill Galloway:

There used to be 70 million sheep in New Zealand. Now there are around 32 million overwintered each year. So, fewer lambs to dock?

Maybe, but it is still a big job on sheep and beef farms.

Jacquetta Ward is just one of the many farmers docking. And she has nearby farmers, mates and people from the district helping her.

Today, they plan to dock 1200 lambs. A goodly number. But some stations dock 6000 a day. They may have 60,000 lambs to get through . . .

Lorraine hangs up the apron – Jill Galloway:

It is the cafe you can wear your working clothes into, and your gumboots.

The Feilding Saleyards Cafe is synonymous with good mugs of tea, great pies and gravy with chips, and the highly sought-after lamb shanks.

Lorraine Pretious left last Friday after 30 years preparing and serving meals to stock agents, truck drivers and farmers . . .

Women get to grips with using guns – Jill Galloway:

Women In Farming is a non-competitive group, and its members wanted to learn about guns and have a go at shooting on a range.

They get a thorough safety lesson from Marton Smallbore Rifle Club member and mountain safety instructor Peter Lissington. He takes people for their firearms licences, so he knows all about guns, the law and safety.

“I want people to know all about firearms, and feel confident about using them,” he says.

Twelve Women in Farming members find out more about rifles, what types there are and how to safely store and use them . . .

Faster internet offers potential for big gains:

Dairy farmer co-operative Livestock Improvement Corporation (LIC) believes that not enough attention has been given to how the Government’s rural broadband initiative will affect farmers.

Infrastructure for faster broadband to rural areas, including those in Southland, will be invested over the next six years, at a cost of $285 million.

LIC general manager of farm systems Rob Ford said people had heard about how high-speed broadband in rural areas would help schools and hospitals, but not about the connection between farming, the internet, productivity and profit.

Free website helps global sharing – Collette Devlin:

A former Southland researcher has developed an easy-to-use, free website specifically for farmers.

Gary Hutchinson, originally from Taranaki, was the project manager for Topoclimate South, a successful three-year soil and microclimate mapping programme that finished in October 2001, after mapping 830,000 hectares of Southland’s farmlands . . .

Angus burger demand boosts Southland beef sales - Collette Devlin:

Southern angus beef farms are being boosted by the popularity of McDonald’s angus burgers in the region.

Taramoa angus beef breeder David Marshall said the high sales of angus burgers at the fast-food restaurant has had a direct influence on the market, which has led to a record sales of Southland angus beef and it looked as if they were set to rise further.

Mr Marshall’s family have been breeding angus since the 1940s and his herd can be traced back to the 1860s when the first angus cattle arrived in New Zealand.

The only show in town – Shelley Bridgeman:

A & P Shows – with their prize-winning heifers, farm machinery, highland dancing, wood-chopping, sheep dog trials and carnival atmosphere – are as Kiwi as No. 8 wire and gumboots.

Last season I attended eleven, from as far north as Whangarei right down to Hawke’s Bay . . .

Focus farm is the real thing - Sue O’Dowd:

DairyNZ’s focus farm in Taranaki is being promoted as a real-life farm with challenges ordinary farmers can understand.

The first field day, with a focus on mating, attracted more than 80 people.

Chris and Kathy Prankerd’s Tariki farm was chosen earlier this year as the focus farm after 20 farmers expressed interest in the project . . .

Beef lull then bonanza tipped:

Rabobank is picking United States beef prices to soar to record highs later next year.

But first, the bank says in a new report, New Zealand will have to weather a supply “bulge”.

Escalating exchange rates, global economic uncertainty and climate risks are short-term obstacles for global beef markets, but the longer outlook remains positive, report co-author Rebecca Redmond says.

Breaking lactose down in fresh milk – Collette Devlin:

Diary giant Fonterra is now producing a lactose-free fresh milk, which means it is now in direct competition with a small Southland organic dairy company.

Early last month, Retro Organics released the first lactose-free fresh milk and yoghurt in New Zealand, which company owner Robin Greer said was the solution to a growing need.

Until now, an Australian company, Liddells, dominated the lactose-free milk market here . . .

Druming upsupport for drum use:

Avoiding accidents with agrichemicals is high on the agenda with a new drum recovery programme launched by Agrecovery Rural Recycling.  

The Agrecovery Drum programme offers farmers and growers around the country free on property collection for plastic or steel drums from 61 – 1000L in size. Drums must be empty and triple rinsed . . .

Paediatrict product move at Westland:

WESTLAND SUPPLIERS can look forward to their processor moving more of their milk up the value chain from next season. The Hokitika-based cooperative last week announced a multi-million dollar investment in a state-of-the-art paediatric nutritional product plant.  

“It’s principally about adding more value,” chief executive Rod Quin told Rural News . . .

Havard reports good return form NZ forest investments - Pam Graham:

Harvard Management, the manager of Harvard University’s US$32 billion endowment, made an 18.8 percent annual return on its natural resource portfolio, which includes majority ownership of the cutting rights to the Kaingaroa forest.

Harvard, the oldest and most richly endowed university in the US, has put 10 percent of its portfolio into natural resources, which it says is mostly timberland, and agricultural and other resource-bearing properties on five continents . . .

Ballance dinners demonstrate path to profitability:

Ballance Agri-Nutrients has pulled together a raft of experts to present at its Business Development Dinner series over the next few months.

Ballance Sales and Marketing General Manager Graeme Smith says the business development dinners are held every year as part of the co-operative’s programme to provide more information and tools to farmers.

“We want to be able to seed new ideas and new ways of thinking with our customers as part of our commitment to help them farm more profitability and more sustainably,” Mr Smith says . . .

Claim wool is losing ground to nylon carpets:

A textile industry representative says resurrecting the fortunes of strong wool is going to take more than the wool sector has come up with so far.

Carpet makers say there has been a significant drop in carpet sales, which have been blamed on unsettled world economic conditions and the rapid rise in wool prices over the past year . . .

Wool levy funds 7 entrepreneurial projects

Seven entrepreneurial projects using wool will share half a million dollars from Beef + Lamb NZ.

The cash comes from a contestable fund set up to share out the remaining wool levies, with the money going to businesses demonstrating the greatest potential to pump money back into the wool industry – and ultimately, into farmers’ pockets.

Some of the projects aim to do this by achieving savings through the development of tools and systems for improved efficiency and consistency. Others are focused on increasing demand for wool through research and the creation of new products and niche markets.

The successful applicants were chosen by an advisory panel from 28 bids by farmer groups, wool industry service providers and manufacturers.

B+LNZ Chief Operating Officer, Cros Spooner says it was exciting to review all 28 projects. “It shows there is some genuine passion and talent with companies involved in the New Zealand wool industry.”

“We believe each of the seven projects we’ve funded has a very real chance of delivering value back to New Zealand farmers, which is great news.”

To ensure the Wool Levy Fund distribution improves returns for wool growers, applicants were required to show their commitment to investing time, money and resources in the success of the project. Each of the successful projects will be matched 50:50 with funding from the applicant group.

• Eastbourne-based Potroz-Smith Technologies Ltd is researching the production
  of an environmentally friendly, super absorbent wool-based material for use in
  personal hygiene and wound-care products that will be natural, non-toxic and
  biodegradable.
• NZ Wool Services International will focus on developing practical tools to
  avoid underweight bales, which currently cost the industry an estimated
  $4million a year. The company is based in Christchurch.
• Wellington company and sustainable textile inventor The Formary is looking
  at blending New Zealand strong wool and a waste material to develop a range of
  commercial and domestic interior products.
• Wool Partners International and Banks Peninsula Wool Growers Group are
  working together to develop a truly sustainable carpet using natural processes
  and materials, including low pesticide, ethically-produced, traceable New
  Zealand wool.
• Invercargill’s Alliance Group plans to incorporate wool production into its
  Hoofprint software package (developed in conjunction with Dunedin-based
  AbacusBio to measure on-farm carbon footprints). The company will work with NZ
  wool producers and marketers to gain extra market value for Hoofprint-accredited
  wool products.
• Wool’s eco-friendly properties are the basis for a project by Matamata
  manufacturer Wool Equities, which will carry out market research, design and
  produce samples, and establish markets for high value bed blankets for premium
  international markets.
• The New Zealand Shearing Contractors’ Association will use the funding to
  establish a quality assurance programme, underpinning recent work to ensure
  accredited shearing operators provide consistent product descriptions and
  demonstrate socially sound and sustainable business practices.

RadioNZ has a story on one of the recipients. Protroz-Smith Technologies is developing a super absorbent wool-based material called NatraZorb, to be used in disposable nappies, personal hygiene and wound care products .

Would a Wool-X prize inspire winning idea?

I’m not a fan of the Sunday Star Times but one good thing it does do is provide space for a column by Federated Farmers president Don Nicolson.

That allows him to communicate with an audience which probably doesn’t read or listen to rural media and to promote good ideas like this week’s (which isn’t online).

It starts:

Imagine if we had a new green export that could generate more than $600 million a year – $100m more than The Hobbit’s economic contribution. Imagine if that export was 100% pure and derived from natural, renewable sources. That product exists – wool.

If ever there was a time to sell a product with those credentials it is now.

Maybe it’s also time for a “Wool-X prize” modelled on the X-Prize Foundation “making the impossible, possible”.

The word prize is key – Virgin Galactic is now in commercial evolution after Burt Rutan spent $25m to win a $10m prize to create a cheap and reusable space vehicle. Could a Wool-X prize similarly inspire enthusiasts in shed and the world’s biggest universities? If we retained the intellectual property, it could unlock new mass market products and industries.

Even if we didn’t retain the intellectual property it would help wool get to – and pass – the $2.8 billion industry it ought to be when adjusted for inflation.

Falling supply and rising demand are taking wool prices back to peaks last seen more than 20 years ago.

A Wool-X prize could inspire a winning idea, then imagine where prices could go if innovative new uses made high demand the norm.

Wool part of the solution to falling sheep numbers

Beef + Lamb New Zealand ‘s announcement that the lamb drop was more than 10% down on last year’s wasn’t unexpected.

A cold, wet spring took its toll, not only in Southland and South Otago where it snowed in late September, but in the North Island too.

The Beef + Lamb New Zealand (B+LNZ) Economic Service’s annual Lamb Crop Survey released today shows the number of lambs tailed was 25.11million head – 2. 8 million less than last spring – and the largest between – season percentage decrease seen in 21 years.

B+LNZ Economic Service Director, Rob Davison says both islands were affected by the cold and wet weather patterns that saw heavy snow fall to sea level in Southland during late September.

“North Island lamb numbers were back 9.5 per cent, while South Island numbers were back by 10.4 per cent.  Any regions where lambing was in full swing in late September were affected.

“Overall, the ewe lambing percentage across the country was 109.6 per cent. That’s 11.9 percentage points lower than last season’s 121.5 per cent – the lowest percentage we’ve seen since the spring of 1995.  While scanning results indicated lambing would be back slightly, it was the prolonged, cold wet weather during spring that was ultimately responsible.”

Lambs from hoggets were up 6.2 per cent on last season – this was partly because hoggets generally lamb later in spring and so largely avoided the adverse weather.  Hogget lambs this spring made up 4.0 per cent of the total lamb crop.

However, Mr Davison says continuing cooler weather, a lack of sunshine and consequent low pasture growth rates mean across the country, lambs are an average of two or three weeks behind where they would normally be at this time.  As a result, early drafts are down in both numbers and average weights.

 This will lead to a decrease in exports, although not by the same percentage.

“We estimate lambs for export will fall 1.4 million (-6.8%) on last season, to 19.5 million.  The reason for the lesser decline than the 2.8 million fall in the lamb crop, is that we predict fewer replacement lambs will be retained this season compared with last season’s high retention.  This season the trade-off will be to keep fewer replacements to generate cash flow.

“With fewer lambs to finish, average weights are expected to be up 1 per cent on last year to 17.8 kg which would make this the highest on record.  The prediction is that farmers will draft as many lambs as possible early to take advantage of the new season lamb schedule prices, then hold off until later in the season, opting to produce heavier weights to maximise per head prices – while at the same time hoping for a decrease in the New Zealand dollar by later in the season.

“Last season’s mid-November lambs were realising $5 to $5.20 per kilogram. This season, we’re ahead of those levels, around $6.10 to $6.30 per kilogram.”

Mr Davison says an active store market has already appeared, driven partly by fewer lamb numbers, but also concerns that the current La Nina weather pattern could deliver a dry summer across the country.

Farmers, and their financiers, will welcome the improved prices but the decreased numbers of lambs will put more pressure on the meat companies which were already regarded as having too much killing capacity.

However, falling numbers provide an insecure foundation  for higher prices. A stronger base requires better prices not just for meat but for wool and other by-products as well.

Wool Partners Co-operative  is offering an opportunity to for better returns from fibre, but it requires 50% of the wool clip to get under way. If it doesn’t get enough support the first realistic opporunity in years for improved returns from wool will be lost and that will be a blow to not only the wool industry but the meat industry too.

The full Lamb Crop 2010 survey is here.

Wool + waste = winner

Wool Partners International  will be supplying wool for WoJo – a furnishing fabric developed for Starbucks.

The Wellington based design team The Formary created WoJoTM for Starbucks by combining LaneveTM wool, with its sustainable, ethical and traceable qualities, with jute from recycled coffee sacks, to form the new furnishing fabric.

The fabric uses 70% strong and mid fibre wool and the jute is recycled from Starbucks’ coffee sacks.

Mixing wool with waste has to be a winner – a natural product meets waste reduction.

 Federated Farmers meat and fibre spokesman Bruce Wills is excited about the venture:

“It’s an inspiring twist on the adage of something new and something old.

“While the initial focus of WoJo is upholstering Starbucks’ 8,000 stores outside of the United States, The Formary has really created a whole new ecologically friendly fabric.

“With the manufacturing partnership with Yorkshire-based Camira, we have a genuine opportunity to get wool back into people’s minds for their homes, offices, schools and even public transport.   Not just here but right around the globe.

“It’s easy to overlook the nearly $600 million that wool generates each year for New Zealand.  Yet we feel the potential is more than five times that sum, if, and that’s the key word, we can spark wool’s renaissance. 

“The Formary’s commitment to wool shows it is possible and we believe New Zealand Trade and Enterprise can see the vast potential that wool has. 

“It’s this kind of joined-up approach to market and product development with the exporters, that will make consumers take that all-important second look at wool. . . “

Wool should tick all the boxes for consumers who want a natural, renewable product and WoJo is a wonderful example of what can be done with it.

More good news followed this announcement - a continuing world shortage of wool is having a positive impact on the price.

Although meat companies often get blamed for the depressed state of the sheep industry, meat prices haven’t been bad. It’s low prices for wool and other by-products which have kept returns low.

Big losses in the southern snow storms and restocking will keep the supply of lambs low this season which will also help prices.

Wool wins WOW

This year’s wonderful World of Wearable Arts has proved yet again that Merino is a winner:

A pair of Indian designers wooed by Wellington’s world-class costume extravaganza have taken the top award at the Montana World of WearableArt.

First-time entrants Yogesh Chaudhary and Manas Barve won the Montana Supreme Award, the American Express Open Section and $30,000 worth of prizes at last night’s awards ceremony for their innovative garment Loops.

Made entirely of merino wool felt, Loops was created with laser-cutting and seamless knitting – no thread or glue was used in its construction. Its interlaced panels cover the model’s whole body.

WOW is a spectacular celebration of creativity and this year’s winner is a wonderful illustration of the versatility of merino.

It’s not the first time wool has won the top award. In 2007 Rattle Your Dags by  Paula Coulthard & Ursula Dixon won the main prize.

Training cheaper without Meat & Wool

Meat and Wool New Zealand is no more. From today farmer levies fund only meat and the industry good organisation is now Beef and Lamb New Zealand (B+LNZ).

One of the major concerns about losing the levy from wool was training for shearers and wool handlers. However, the ODT reports that training fees have been agreed which could cost farmers as little as a cent a sheep.

Woolhandlers and shearing contractors are hailing the agreement, which will see Tectra set new training course fees to take account of the absence of wool levy funding, which will also ensure the industry can continue to leverage some taxpayer funding for training.

New Zealand Shearing Contractors’ Association president Barry Pullin said how each contractor implemented the new regime was up to them, but it reflected the fact other industries expected their staff to contribute towards training costs.

Those costs would be as little as 1c a sheep, substantially less than the 21c a sheep wool growers paid as part of their wool levy to Meat and Wool New Zealand.

“What’s wrong with that? If we can do it for 1c a head when previously under the name of wool harvesting it cost 21c a sheep, it’s got to be better,” Mr Pullin said.

With wool prices in the doldrums still, a reduction in the cost of training the people who shear and handle it will be very welcome.

Why not wool?

Why not wool for carpets, insulation and furnishings? I asked in today’s Paddock Talk column in the ODT.

It’s not online, but this is: retailers floored by lack of promotion.

Talk to the co-owners of a United States flooring retailer about wool and it becomes clear why crossbred wool has struggled to connect with carpet buyers.

Kaddy Carpenter Ward and her sister, Jane Rinaca, say until very recently there had been no promotional or advertising material to support the sales of woollen carpets in the United States – the world’s largest carpet market.

Compare that with nylon carpet, and Mrs Rinaca said that since manufacturers had solved issues such as weave and lustre, the product had been supported to the point where it was promoted as being sustainable because used carpets were being recycled.

That’s what we’re up against.

Wool isn’t going to sell when it’s up against such tough competition and consumers don’t understand its qualities – or even how it’s harvested:

Mrs Rinaca said many people in the US still believed sheep were killed to produce wool, a misconception they put to rest when they shore a sheep on a Hawkes Bay farm.

Wool ticks all the boxes for people seeking natural, renewable, sustainable products – it also passes the touch test:

“Nylon has been made to look like wool, but they will never make it feel like wool,” Mrs Carpenter Ward said.

With all that going for it wool ought to be selling itself  but of course it won’t if people don’t know about it.

Prince’s woolly thinking good idea

Prince Charles has been criticised in the past for some woolly thinking, but this time he’s got a good idea and has launched the Wool Project –  a scheme to help sheep farmers around the world boost the price of wool.

Devised by the Prince and the director of the Pastoral Alliance, John Thorley, the scheme was billed as a comeback for wool at the launch on a Cambridgeshire sheep farm on Tuesday (26 January).

The scheme aims to turn around the wool market’s fortunes, which has seen prices slump from 93p/kg in 1997 to 66p/kg last year.

It will promote the green credentials of wool to consumers as well as urging shops to promote it as a fashionable material for clothes, carpets and rugs.

The Prince intends to create a green label to adorn woollen products across the UK and Commonwealth countries such as Australia and New Zealand.

Federated Farmers is supporting the move. Meat & Fibre chair, Bruce Willis, points to wool’s green credentials – it’s a fashionable eco-friendly alternative to synthetics.

It also helps you stay warm when it’s wet and it can be worn for longer in sweaty conditions without getting smelly which makes it ideal for work and tramping clothes.

Icebreaker has shown the way with casual clothing. Christina Perriam, is doing the same for fashion clothing. She features in the current NZ Life & Leisure, in which she says she’s:

. . . focused on relaunching her fashion label, creating key, affordable but beautiful pieces that New Zealand women will treasure and keep in their wardrobes for many years. And then there’s the New Zealand merino sleepwear range which caters for the growing need for organic, healthy, sustainable fibres to be worn next to the skin.

Both Icebreaker and the Christina Perriam range use merino. Finding uses and markets for crossbred wool is more problematic.

Wool carpet is great, but a lot of the world uses tiles rather than carpet.

Wool insulation has been round for a while but it isn’t making much headway against synthetic alternatives, although if my experience is anything to go by that’s not surprising.

Recently I asked about wool insulation at Wanaka’s Mitre 10. Once we’d got past a couple of minutes of crossed wires and established I was talking about wool not wall insulation, the shop assistant rummaged through the brochures on display, all of which were for synthetic materials. She then went in to an office and spoke with someone else who came out with a brochure and a couple of pages printed from a website about wool insulation.

I asked the price and how it compared with the cost of synthetic alternatives. The assistant consulted the woman in the office again and returned to tell me she’d never worked it out but thought wool would be a little bit more expensive, though it wouldn’t cost twice as much.

The producers of wool insulation are being very poorly served if the brochures for their products aren’t with the others and the sales people – or at least the two who were trying to help me – don’t know how the price compares with its synthetic competitors.

The idea of selling wool as an eco-friendly, natural, sustainable fibre pushes a lot of marketing buttons. But the Prince and his project have a lot of work to do if the products already available are marketed this poorly.

Hat Tip: Phil Clarke’s Business Blog.

Economics 101

The headlines says:

South Island wool price movements reflect supply

The story says:

NZ Wool Services International Ltd reports prices at today’s South Island wool auction saw wool supply factors driving price movements, with prices of different types rising or falling depending on the quantity of wool available.

Prices responding to supply and demand, isn’t that amazing?

Between the sheeps

AgResearch has found a way to make woollen sheets and pyjamas which won’t itch or shrink.

While it’s not known when woolly sheets will be in the shops, pyjamas might be on sale next year.

They could call the woollen bedclothes sheeps.

That would be certain to get wide publicity across the Tasman because the Aussies wouldn’t be able to resist the temptation for a new line of ovine humour at our expense.

Going to bed with wool

Coco Chanel is credited with saying that the only thing you should wear to bed is perfume.

That’s all very well on a warm Paris night. People in cooler climes might need a little more covering and AgResearch scientists have come up with something for them to wear which they reckon will make going to bed more enjoyable:

They’ve made a breakthrough in textiles which has resulted in a lightweight natural product which they say:

. . . has no chemical treatment, helps sleeping, maintains and regulates temperature and looks and feels fantastic.

“Easy Care Wool Sleepwear works in both summer and winter and we believe makes excellent nightwear and loungewear with its outstanding comfort properties,” said Dr Surinder Tandon, Senior Scientist, Textile Science & Technology.

The Sleepwear products targeted for the development include men’s and women’s nightwear and loungewear. These were developed using innovative combinations of merino wool and other natural fibres such as bamboo and silk, yarn structures, fabric weaves and knits, and finishing procedures.

The Easy Care bit is important because it’s not that long ago that wool was anything but. However, developments with merino by companies like Icebreaker which has brought us fashionable, itch-free, lightweight, machine washable clothes has helped wool products compete with synthetics.

AgResearch took their stab and fire resistant wool vest to the catwalk at Air New Zealand Fashion Week last year. It is going to invite well known designers to come up with garments made from Easy Care Wool in the hope they will be able to show them at next year’s fashion week.”

“They will look great, function well and be very comfortable,” said Dr Tandon.

The new sleepwear fabrics are being manufactured by South Canterbury Textiles, “This cutting edge textile is exciting from our point of view- it’s new, it’s got real advantages over other fabrics used for sleepwear and it creates opportunities for us once it is available,” said Andrew Miller CEO.

This sleepwear fabric development programme was supported by Textiles NZ under their industry scheme Transform, South Canterbury Textiles and Locus Research.

If this product can be commercially viable it will provide a much needed boost for the wool industry which has been faced with low prices for far too many years.

It will also provide something a bit warmer, and not necessarily any less alluring, for those who prefer to wear something a little more substantial than perfume in bed.

Where to with wool?

Merino has got it right.

By itself or with possum, now renamed paihamu, it is a premium product.

Crossbred wool can’t match that and has been losing ground to synthetics for years.

Too much of the world prefers tiles to carpet. Too many of the parts which do like their floors covered have found cheaper and/or harder wearing alternatives to wool.

Alternative uses have been tried. The stab proof, fire proof vest and insulation both have promise but have yet to make enough traction to improve the value of crossbred wool.

The fibre pushes the right buttons for the environmentally concerned times: it’s a natural product and it’s renewable.

But in spite of that prices are so low the return barely covers the costs of shearing.

Frustration over that is no doubt part of the reason behind the vote against paying levies on wool to Meat and Wool New Zealand.

The organisation may well become Meat New Zealand now it’s lost farmers’ funding for its wool related activities but the loss of half its name is the least of its worries.

Loss of funding for wool research means the budget for meat research will have to go further. Some studies, in genetics for instance, would have been funded from both the meat and wool levies.

Another valuable resource paid for by the wool levy was shearer training. It might be possible for some of the people who did that to set up a separate business and continue the service, but it will be more difficult than it was under M&W’s umbrella with AgITO funding.

Sheep returns made a much-needed recovery last season when the price paid by meat companies went up. A shortage of stock here and overseas is expected to keep this season’s price at a reasonable level but the industry can’t afford to stand still.

Research and education in both meat and wool are still needed. Meat and Wool still has a mandate, and funding, to undertake industry-good activities for meat, but who’s going to do the work for wool?

Wool natural option for insulation

Federated Farmers saw an opportunity for wool  in the Budget funding for home insulation and Wool Partners has followed up with a fact sheet on its benefits.

Among them are:

* Wool is a natural insulator.

* It’s healthy because it’s bio-degradable and non-toxic.

* Wool is a natural air conditioner, moderates humidity and act as a natural filter.

* It’s safer than synthetic insulation because it’s fire retardant.

*It’s environmentallyf reindly because it’s a natural, renewable and sustainable resource.

* Wool insulation gives value for money.

Wool insulation has been around for some years but is still a very small player in the market.

However, a growing demand for natural products combined with the government’s insulation scheme might provide a boost for companies like Terra Lana.

Commodity prices up but so is $NZ

The good news is that the ANZ Commodity Price Index showed an increase for the second month in the row.

Unfortunately that 2.5% % increase was counteracted by an increase in the value of our currency which meant commodity prices fell 2.8% in New Zealand dollar terms between March and April.

The price of eight commodities rose last month, two were flat, and apples, seafood and logs fell.

The largest rise was for aluminium, up 6.6 percent for the month, followed by lamb, up 6.4 percent to a record high.

Beef prices rose 3.2 percent, dairy was up 3.1 percent, skin prices rose 2.3 percent, venison was up 1.6 percent and the price of wool rose 1.3 percent.

That’s encouraging for sheep and beef farmers, especially those in drought-hit areas who’re being forced to sell stock who might get some small comfort that they’re selling on a strong market.

The increase in skins and wool, though small, is a welcome change from what looked like a permanent downward trend.

Following fashion folly on farm

Take a navy guernsey over a striped shirt with the collar turned up, add a denim skirt and top it all off with pearls or a fob chain and what have you got? The magazine in which I read this description called it the country clone and wasn’t impressed.

 

I’ve failed to master the art of stand up collars, am more likely to be in a tee shirt anyway and prefer jeans to skirts. But I have to admit the general affect is much the same as the one the fashion writer described so disparagingly.

 

I understand her lack of enthusiasm because the wool and denim ensemble gets more points for comfort than style. But that’s precisely why we country women choose it – because although it’s predictable it’s also practical. It may not be sufficiently stylish to claim the label classic but because this look is never in fashion it never goes out of fashion either. And while they may be a long way from the look of the moment on city streets the “country clone” clothes are well suited to a quick sprint across a paddock if the wearer is called on to lend a hand before she dashes off to town.

 

You may be able to opt for style if the nearest you’ll be getting to the great outdoors is a gentle stroll down a well paved foot path and you can favour fashion if you have nothing to pick up but the groceries. But when you might have to rescue an old ewe which has cast herself in the cattle stop before you leave your property and you know your shopping list might include sacks of seed, containers of drench or grease-encrusted parts for the irrigator it pays to choose clothes to suit.

 

Just how necessary it is to put function before fashion was brought home to me the day I decided I had the luxury of enough time to dress with care before going in to town. I’d just added the finishing touches to my ensemble when there was a knock at the door, it was the dog-dosing man looking for someone to help him. My farmer was away at a sale and I had no idea where the other men were but when asked I had to admit I knew which name went with which dog so there was no reason why I couldn’t act as doser’s assistant.

 

It may be possible to remain immaculate while catching and holding thousand-acre dogs but I didn’t manage it. I’d taken the precaution of exchanging my shoes for gumboots but they didn’t protect my tights from a liberal splattering of mud. I also acquired a patina of dog hair on my skirt; the imprint of one of King’s very large paws on the front of my blouse and the perfume with which I had splashed myself lost its battle with what could best be described as “eau de kennel”.

 

Next time I had a yearn to dress up for town I ignored it and reached for my jumper and jeans. It may be fun to follow fashion and I do enjoy donning smart clothes for those occasions when it’s necessary to play ladies. But, even though the dog dosing man doesn’t call anymore, when choosing an outfit for every day wear the question I ask myself is not whether it’s fashionable but: how will it look with gumboots?

 

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