Caption: Minister of Agriculture Damien O’Connor hosted a summit in a bid to lift wool out of its downward spiral.
Photo: JOHN HAWKINS/STUFF
A backlash against plastic may finally turnaround the fortunes of the beleaguered wool industry, struggling with record low returns.
A Wool Summit hosted by Agriculture Minister Damien O’Connor in Wellington aimed to do what other similar initiatives had failed to do – lift wool out of its downward spiral.
Farmers say strong wool returns are so low they are lucky to break-even after shearing costs.
O’Connor said people attending the summit “stressed the need for the industry to tell the story of wool to consumers, at a time when the world is crying out for alternatives to plastic and synthetics.
“There was a good mix of enthusiasm and experience and everyone agreed we need to build trust and collaboration across all parties to turn wool into a success story for New Zealand, as it once was.
“Wool has huge potential as a sustainable and valuable product but has languished since deregulation in 1997 and the unsuccessful levy referendum in 2014, leading to a lack of industry unity, structure, common vision and strategic focus,” O’Connor said.
From the summit a small working group was being formed and will work with the Ministry for Primary Industries (MPI) to progress the next steps. MPI was also investigating how it could use its economic intelligence unit to help the sector better connect with high-value customers.
As a percentage of total exports, wool fell from 26 per cent in 1920 to 1.6 per cent in 2011, as sheep farmers switched their focus from wool to sheepmeat.
From a peak of $1.8 billion in 1989, wool export returns fell to $522 million by 2017. The strong wool market, which represents 70 to 75 per cent of the clip, bottomed out at $2.67 a kilogram clean in July 2017, rising to $3.41 by June this year.
Federated Farmers’ meat and wool chairman Miles Anderson said he was “a lot more optimistic coming out of the summit than I was going in. There is a willingness from all parts of the industry to move ahead”.
Producers of strong wool were lucky to break-even once the costs of growing and shearing were deducted. “Anything above that is a bonus. It’s imperative for the sheep industry that wool plays its part,” Anderson said.
While strong wool was in crisis, both strong and fine-micron wools had similar issues with wool harvesting, training and education.
Several working groups had previously unravelled, but the time for wool was now, given how environmentally aware the public had become, Anderson said.
“Wool offers an environmentally-friendly product in comparison with synthetics, oil-based products which release micro-plastics into the environment.”
Wool was a fantastic choice for a myriad of products from carpet, insulation and bedding to shoes, clothing and packaging material, but it had been out-competed by synthetics.
“Using wool is a win for everyone involved. It is natural and renewable, biodegradable, breathable, non-allergenic and flame retardant, while creating jobs sustaining our rural communities,” Anderson said.
Wool Services International chief executive John Dawson said while China had bought up to 60 per cent of the New Zealand wool clip, this had dropped to 30 per cent, prompting the market slide.
Since then, China’s purchasing had recovered to 40 per cent. Other markets also continued to buy wool in smaller amounts.
“Wool has special characteristics, but for a variety of reasons that message hasn’t resonated with the consumer,” Dawson said.
“We know a lot of the reasons. There is certainly demand for wool, but there is competition from competing fibres. People will only pay so much for carpet yarn.”
PGG Wrightson wool general manager Grant Edwards said it was great to see key industry leaders getting together to seek a better future for wool.
PGG Wrightson had a wool brokering and export arm.
“There is a huge opportunity and a key driver is the attributes of wool, being sustainable, biodegradable and fire retardant.
I don’t believe as an industry that we are telling the wool story well enough. Daily we are hearing about the challenge of plastics and synthetics to our environment.
“I commend the minister on creating the forum to drive that forward,” said Edwards.
