Selwyn Times: September 02, 2020

30 Selwyn Times Wednesday September 2 2020
SELWYN RURAL LIFE
Wool sector faces tough
decisions
Once a stalwart of our economy, the wool
sector faces some tough decisions to
ensure its survival. Piers Fuller reports.
For those lanolin-soaked old shearers
who remember the glory days of the New
Zealand wool industry, the collapse of
our strong wonder fibre is something of a
disaster.
For many modern economists, the
writing is on the wall and it is time to face
reality and produce something the world
wants.
Unfortunately, what the world has
wanted in recent decades has been cheap,
petroleum-based synthetics.
At its peak in the early 1950s, almost
half of the country’s export earnings
were generated by wool; by 2019, that
proportion was less than one per cent.
Last shearing season some farmers were
barely getting $1 a kilo for our traditional
strong wool - not nearly enough to pay to
take it off the sheep.
Whether observers think our
homegrown wonder fibre is on the cusp
of a collapse or a renaissance depends on
perspective, but it is evident that wool
holds a special place in Kiwis’ hearts, and
nobody wants to see it disappear.
The industry is not taking strong wool’s
desperate situation lying down, nor is the
Government for that
matter, and there is
confidence that the
country can create
a pathway back
to profitability for
wool.
Others say it is
time for the market
to adapt, despite
New Zealand’s
historical fondness
for the product.
Westpac senior
agri-economist
Nathan Penny says
the answer was quite
clear, and we needed
to stop producing
something that
people don’t want
and focus on what
they do want.
“I do think the
answer’s been staring us in the face, but
there is quite a bit of attachment to what
has been a flagship product for New
Zealand for a very long time, but the
world moves on and the world is saying
coarse wool really isn’t on many people’s
radar.
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“The logical thing to do from a business
point of view is look to reduce our
production of it.”
It is important to note that fine and
medium wools, such as merino, are still
viable products, but they are also seeing
reduced demand in the current Covid
climate.
Penny was not surprised by the weakness
in wool demand as the world’s economies
tighten their belts and concentrate on
food-related commodities.
He says there’s been a double-hit to
wool demand at the coarse end of the
fibre range, which has accelerated
the longstanding trend of weak
prices.
“The general story is there
are plenty of alternatives to
wool, synthetic in particular, and
in the current environment there is the
added complication of low oil prices, so
synthetics have become even cheaper.”
He suggests farmers adapt by
changing to varieties of sheep that
produce finer wools and focus on
meat.
“In recent years, meat has been
paying the bills. Now farmers
are increasingly getting less
and less for their coarse
wool, it’s actually becoming a
cost line and opposed to a revenue line in
their farm businesses.
“Now the signal is loud and clear, noone
is really interested in that product, so
it’s a clear signal to stop producing it.”
That’s an enticing prospect to a farmer
who’s just spent tens of thousands
removing the wool from their sheep with
very little in return.
Source: Stuff.co.nz. The full article can be
found at https://www.stuff.co.nz/business/
farming/agribusiness/122337438/
wonderful-wool-our-supermaterial-is-ata-crossroads--adapt-or-disappear