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?

2 Responses to Where to with wool?

  1. gravedodger says:

    A good summary some observations
    How sad for the renewable fibre of crossbreds. In the farm section of the press last week in a feature on the banks peninsula initiative a high end US carpet producer admitting that they could pay a lot more for raw wool but dont have to so why would they. Whether they will in the future as the alternative will be the further barstardisation of our quality xbred wools to reduce or eliminate shearing costs which are seen more as an impediment to economic lamb production than an additional income stream wool used to be.
    As to shearer training we have been surviving on the fact that declining shearer numbers have matched declining flock size. When mrs GD and I exited the industry nearly 10 years ago our very loyal shearers were nearly all older than us and I wonder how many are still going.
    Yes Merino wool looks attractive but with higher flock cost plus very low meat returns from lower body weights and fertility/survival rates the exodus from that industry is of concern. Consider the quantity of the high country that has been removed from production.

  2. Ed Snack says:

    Hmm, the current meat prices are clearly unsustainable. I would guess that all lamb meat processors are currently processing at a gross loss before overheads. The cost per kg of the lambs is so high that despite excellent overseas prices, and because the exchange rate persists in floating up, that everyone is losing money hand over fist right now. One of the downsides of the chilled trade, you can’t stop producing and satisfy your customers.

    The current price needs to drop by, say, 30% or more to be sustainable at the current exchange rate.

    Farmers are probably lucky in one respect, if the mass processing merger had occurred there’s no way that lamb prices would have stayed this high. It’s the competition to keep the chilled product flowing that’s driving prices right now.

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