Wool prices could rise sustainably only if those folk accepted their homes were safer by using the natural fibre as the base for furniture, bedding and insulation as well as carpets rather than man-made, synthetic products.
“Why are they filling their homes with petrochemicals?
“I think it’s because they don’t know what they’re doing,” Bayly said on his final day as wool general manager for rural services group PGG Wrightson.
“If they did, they wouldn’t let their children run round in homes like that.”
The man-made foams, polystyrene and nylons were full of invisible gases and created a fire risk.
“I’ve been waiting 20 years for the message to get through and I think it will and then crossbred wool will have a good future but still some volatility in prices.
“It’s got bulk, it’s clean with natural elasticity and it doesn’t burn.”
Bayly has retired after six years in Wrightson’s top wool job and more than 40 years in the industry.
The times now were as difficult and volatile as they had ever been.
Wrightson’s outgoing chief executive Mark Dewdney – they retired on the same day – told the firm’s annual meeting in late October the company typically had about 5000 bales of crossbred wool in storage around the country but this year’s downturn in demand and sales increased it to 25,000 bales.
Other NZ companies and other wool-producing countries had plenty in store as well.
Crossbred wool producers could only watch as the fine Merino and mid-micron farmers reaped the rewards for their fleeces, strongly sought after by clothing makers.
Wrightson was active in those fleeces as well but the reality was that crossbred made up 80% of its business with Merino at 12% and mid-micron at 8%.
The group was kept out of the Merino business after selling its stake in the New Zealand Merino Co back to growers but that restriction ended three years ago and about the same time Craig Smith was brought in as business development manager with his vast contacts in world markets.
That was a key move for the group, Bayly said.
Smith had brought in a lot of business with the only restriction now being not enough Merino in NZ to meet orders.
South Island high-country land-tenure outcomes were an issue and the group had started looking for overseas supply as well.
One of Smith’s achievements was to get the top-end Japanese clothes maker Konaka as an important buyer, among several others. The Konaka fine Merino suit Bayly wore to the Wrightson annual meeting retailed for about $5000.
Bayly expected the fleece-type ratios to stay about where they were now.
Merino supply was a factor and increasing mid-micron volumes wasn’t easy either.
Producing lamb meat was the main purpose for sheep farmers and prices were good right now while any attempt to breed crossbred flocks towards the mid-micron (22 to 30) range could result in lower lambing percentages.
The issue for crossbred wool was simple.
“China or Asia was taking 53% of our clip but then there was a change in strategy there and the volumes have dropped back to 30%.
“That means more than 20% of our wool was back on the global market and that’s why the market has dropped. It’s really difficult.”
Good lamb prices were helping farmers decide to store wool rather than meet the market.
Wool could be stored for several years but colour and quality did drop away over time and prices adjusted for that.
For the sake of an extra $50 to $100 a bale and the short-term outlook wasn’t looking wonderful, Bayly said farmers should be turning their wool into cash for reinvesting in other parts of their operations . . . especially with the new shearing season about to start.
More than 90% of NZ’s crossbred wool was sold to the northern hemisphere where buyers believed it to be some of the best in the world.
But it was a carrier fibre and buyers wanted to put it with wools of other origins and they wanted to process it with other fibres, either natural or man-made.
“That’s where the market is. They want to do their own mixes for their own products.”
Bayly joined the wool department at Williams and Kettle in 1974 and was manager of the business when W&K became part of firstly Wrightsons then went into the merged Wrightson and Pyne Gould Guinness.
He spent some years with Elders Primary Wool before returning to the enlarged Wrightson group in 2011.
Then new chief executive George Gould asked him back to rebuild the business after the failed attempt to fold it into a farmer-owned entity.
Bayly liked that challenge and also the fact the group owned the Bloch and Behrens export business.
That enabled growers to sell their wool on contract, developing relationships with overseas customers rather than having to sell all their wool on the spot market.
It helped stabilise wool prices with many farmers benefiting from contracts still being in place at higher prices than the spot level. It had been successful for all groups, Bayly said.
Wrightson sold about 10% of its wool on contract with the major volumes still going through auction.
Auctions would remain the main sale method. They were a way of change of ownership and there was nothing wrong with that.
Through all the difficult times the whole industry owed a debt to wool exporters who travelled the world and brought back orders from northern hemisphere customers who had plenty of other places they could buy their wool, he said.
Bayly farmed deer on his Hawke’s Bay lifestyle block.
“They’re low maintenance and easy to run when you’re busy,” he said.
Now he’s got more time, he’s wondering if he might get one or two Corriedales as well.
