Wool price hits shearing industry
Wool prices at a 50-year low are expected to force farmers to look at their businesses and reduce shearing as they cut back on any extras.
New Zealand Shearing Contractors Association president Jamie McConachie said farmers were talking about the poor wool price and it would change the ‘‘viability’’ of shearing.
He said farmers were always assessing their business needs and in his years as a contractor, he had never seen such low wool prices.
‘‘As a result farmers are less likely to second shear [shear twice in a year] any sheep.’’
In the past year prices for crossbreed fleece had tumbled from $4 per kilogram to $2, and a lot of wool was not being sold, Peter Tate of Fred Tate Wools in Napier said.
He thought perhaps a third of the season’s crossbred production - 200,000-300,000 bales - was unsold.
‘‘That’s a bit of a worry because it’s going to hang over the market for the next year. Some people are saying ‘blow it I’ll keep it in the shed’, others are saying ‘get rid of it, move on’. It’s been the worst [price] for 50 years,’’ Tate said.
The dismal state of the industry is being blamed on a lack of demand from China as well as a failure to promote wool in the face of competition from synthetics. The Chinese still have a lot of unsold yarn from last year so they are not buying.
Federated Farmers Manawatu/Rangitikei president, Richard Morrison said the low wool price was definitely affecting farmers’ shearing policies.
‘‘Many farmers are storing their wool in sheds and waiting for a price lift,’’ said Morrison, a sheep and beef farmer near Marton in Rangitikei. ’’This lift might take a while, but the quality of the wool deteriorates over time.’’
He said farmers could cut shearing costs by choosing not to shear lambs before their sale.
‘‘The cost of shearing a lamb is greater than the value of the wool. Farmers choose to shear their lambs due to other management factors, but they need to remember that wool sold on the sheep’s back to the meat processor is not remunerated.’’
He said farmers would be unlikely to second shear ewes, as it meant less shearing costs per volume of wool and they faced more shearing costs.
‘‘Farmers might decide not to skirt [sort] the wool. They could save money, but not skirting any wool is not good for the quality of the clip. And they could change genetics of sheep away from a focus on wool toward other traits such as fertility and meat. A change of breed may also be considered.’’
Morrison said farmers were thinking of ways to cut shearing costs, but maintain sheep management.
He said European farmers were getting even less for their wool than New Zealand farmers.