Putting the bounce back into wool returns
OPINION: It's incredibly frustrating that wool is languishing as the cellar-dweller in returns to farmer producers.
Given wool's incredible attributes, and world markets that supposedly are clamouring for products that are renewable, natural, biodegradable and healthy, New Zealand wool should be doing just fine.
But while the prices for sheep and beef meat have bounced backed to sustainable levels, the returns from wool remain dismal, with no immediate prospect of an upward turn.
Adding to the concern is the ever-increasing stockpiles of wool in sheds and wool stores around the country. One estimate is that close to 50 per cent of the national clip is sitting unsold. Wool quality deteriorates over time, especially colour – a driver of price.
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These stocks will have to come into the market at some stage – perhaps when demand from China turns the corner again – but that could dampen any market lift. The last thing we want to see are these stockpiles sold because of pressure from banks, further weakening soft markets.
As farmers, we need to ask ourselves what we are doing with our wool to add value to the clip. Are we maximising opportunities for smart presentation? The reply from some people will be, "we're not getting paid enough to do it properly".
But that's a vicious circle; we can't expect better prices if our presentation is sub-par.
One of the messages from the outgoing Federated Farmers meat and fibre chairman Rick Powdrell, addressing the national conference in Wellington, was that some in the industry are not helping with the perception of wool in the language they use when commenting on the product.
Using terms like 'waste product' or 'by-product' is hardly inspiring to end-users. If we can't be more positive about the wool we produce, how can we expect the uninformed end user to be upbeat.
A wool working group Powdrell has been involved with is soon to report to the Ministry for Primary Industries on ideas for a national future wool strategy.
If a strong case for change can be made, it will then need the backing of all involved – and anyone not prepared to get in behind with the agreed united approach "should be left to fend for themselves outside the tent", he said.
I'll throw in my own challenge. What are our wool purchasers/merchants doing that adds to the equation? They get the same margin whether farmers' returns are high or low, and it seems to me that some of them are content to clip the ticket without doing much to help the cause.
If there are middlemen who aren't prepared to pull their weight by looking for new products, markets and opportunities, we should be culling them from the supply chain.
Wool's story deserves to be told a hell of a lot better than it is.
Wool's warmth and insulation properties are unrivalled, it's a natural product with myriad uses and it's flame resistant. Wool acts as an air filter, trapping allergens, so it is great for those who suffer from asthma and the like; in carpet and insulation products it is great for absorbing noise.
They're the advantages we need to get out there.
Politicians are in electioneering mode with the September poll looming large. I think farmers should be lobbying all MPs, no matter their political colours, to commit to insisting that wool has preferred product status in any government building refurbishment for linings, flooring, insulation and the like.
There is no product more 'Kiwi' than wool and every government agency chief executive should be taking the lead and using wool products in their head offices, showing it off to corporate and overseas visitors.
- Chris Irons is Waikato Federated Farmers meat and fibre chairman.