Saturday, March 30, 2024

Crossbred wool future limited

Neal Wallace
It is widely accepted that crossbred wool has little or, at best, a limited future without changing its structure or finding innovative uses.
Reading Time: 3 minutes

Artificial fibres have caught up and overtaken many qualities of wool and have effectively pushed the natural fibre out of the market.

Stories of carpet retailers directing customers to floor coverings made from synthetic fibre instead of wool are all too common, even in New Zealand, the home of the world’s best quality strong wool.

The most recent Ministry for Primary Industries Situation and Outlook report paints a grim picture warning there are few signs of a rebound in crossbred wool prices or demand.

Export volumes are rising but that is because of a build-up following a collapse in prices last year resulting in mid-year stocks three times normal levels.

MPI also noted the gap between the price of fine and crossbred wool stronger than 31.4 micron is four or five times, $19 and $4 respectively.

At recent sales 28 to 33 micron crossbred wool sold for $4.05 to $8.65 but 33 micron and stronger from $3.02 to $3.90.

The dominance of China, which most years takes more than half NZ’s clip, sets the price based on commodity use. 

When its buyers are active prices generally rise but when they aren’t buying, prices fall. 

Italy at 9% is NZ’s next largest market.

NZ Wool Services International chief executive John Dawson said China is demanding finer crossbred wool, which is reducing demand for the stronger end.

In the 30 or so years wool prices have fallen in real terms, quality has also progressively declined, to the point where Professor Jon Hickford, a Lincoln University breeding and genetics expert, believes no amount of marketing will lift prices until that improves.

Hickford said new, more accurate fibre diameter measuring equipment shows wool in some flocks varies from 30 to 50 microns because existing technology can’t accurately measure higher than 38 microns.

“There is a problem because crossbred wool is blowing out 40 to 50 microns but farmers are told it is 38 microns.”

Crossbred wool over 38 microns is virtually worthless because of its coarseness and medullation issues in carpet manufacturing.

By strengthening the clip, demand is further diminished and he is surprised Sheep Improvement includes wool weight as a trait selection criteria. 

He sees little merit producing greater volumes of wool no one wants to buy.

“Less weight but of higher quality is better but we are going the other way and saying more must be better.”

Crossbred wool’s star has fallen from the days when it accounted for up to 70% of farm income.

An absence of any promotion in recent years has created a generation of consumers who know nothing about it.

Twice farmer referendums have sent an emphatic message they do not want levies to fund wool promotion.

Further evidence of wool’s dimming star is the Wool Research Organisation of NZ chairman Derrick Millton’s announcement in the 2016-17 annual report there are no wool teaching courses available for industry or students.

He said Lincoln University is reluctant to reinstate its previous wool certificate and diploma courses but WRONZ has funded the reinstatement of the Certificate of Wool Technology offered by Taratahi Agricultural Training Centre.

Former NZ Wool Services chairman Derek Kirke predicted in 1985 as part of a Nuffield Scholarship study that wool carpets had a limited future as synthetics could mimic then exceed wool’s qualities.

“Time has proven that conclusion to be correct.”

Synthetics still have issues with comfort but Kirke said they have improved.

MPI and Statistics NZ data shows how fickle the international wool market has become.

Optimistic commentary in 2016 noted wool export prices were at their highest since 2011 and though easing back, were expected to stay above $6 a kilo.

Export values were forecast to hit $801 million in 2018 and about $780m in 2019 and 2020.

But a year later MPI replaced those bullish forecasts with a decidedly more pessimistic view, especially for crossbred wool, predicting export values for 2018 slipping to $510m and $540m for 2019.

In contrast, MPI said fine wool, accounting for just 8% of export volumes recorded a 20% increase in price in the previous year.

Wool Services International chief executive John Dawson described prices as a joke and an embarrassment but said a tangible turnaround in the price of crossbred wool is some time away and will be driven by new products.

“There will always be a future but it is a question of finding new products that can actually increase the return to farmers.”

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