Wool report: Good news for the organic market

File photo / Bevan Conley

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Jamie Mackay from The Country recently delved into the world of organic wool with Palle Petersen, general manager for Bloch and Behrens Wool New Zealand Ltd. - the export arm of PGG Wrightson Wool.

Mackay's started with a big question -how much of a premium can you get if you go organic?

Petersen said PGG Wrightson was probably the only organic wool exporter in the country.

PGG Wrightson had been working on organics for probably ten years and had a good customer in the US, manufacturing bedding, he said.

PGG Wrightson was currently offering $5.50 for organic second shears, $3.50 for bellies and pieces and $7.00 for lamb's wool.

This came to at least a three-dollar premium, which was good news when conventional wool was not worth much at the moment, Petersen said.

Mackay mentioned the record-wet July, which had been a nightmare for pre-lamb shearing. He asked if there were colouring and discolouring issues.

Petersen said that, so far, the wool clip had been OK but that was probably shorn before the big rains. There were certainly some concerns going forward, he said.

Mackay wondered whether a lot of farmers - because they're not being paid a lot for their wool - were taking less care of it and kicking it straight into the bale.

Petersen said farmers got punished for this in the auction room.

When prices were low and demand was low, buyers were more selective and prepared to pay extra for a well-prepared clip, he said.

If taking care of the clip was going to improve the price by 50 cents or so, it was still worth doing, he said.

Mackay asked Petersen about his recent European trip. He also asked if there was light at the end of the tunnel for the strong wool market, considering fine wool was looking quite good.

Petersen agreed, saying fine wool was looking "extremely good".

He spent a week in Italy where they were expecting a record year volume-wise.

Crossbred wool in certain areas was going really well but with consumer confidence down and inflation running at 7 per cent, customers in Europe for crossbred wool were expecting a slowdown, he said.

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The good news was that China was starting to take a bit more than they were at the start of last season and were coming back to more normal levels, Petersen said.

Mackay said there was anecdotal talk that shipping costs were coming down which could help matters.

Meanwhile, PGG Wrightson was expecting an exciting visit in October from a European luxury brand, Petersen said.

They would be looking for merino growers interested in a long-term relationship and heading down the organic track. He advised farmers who were interested to get in touch.