Crossbred wool goes 'from riches to rags'

The demand for poorly prepared crossbred wool has dropped significantly in the past 12 months. Photo / Peter McIntosh

The crossbred wool industry is in crisis, says PGG Wrightson's South Island wool sales manager, David Burridge.

"It has gone from riches to rags in 12 months," he said.

Although fine wool is doing well, bales of poorly prepared crossbred wool are sitting in warehouses with no buyers in sight. He said crossbred wool made up about 85% of New Zealand wool sales in terms of volume.Although there was still a market, it was at a "very low level".

"We have seen full-length fleece that is not well prepared drop in price from about $4kg to $2kg in just 12 months.

"That is extremely hard for farmers to work into their budgets."

He said one of the main reasons for the drop was the reduction in demand out of China and other Asian countries.

Crossbred wool was used in those countries' fashion industry.

Higher disposable incomes and fashion trend changes in China meant consumers were now wanting garments and leisure wear made from finer, softer, lighter wools and synthetics and man-made fibres, which were taking a larger market share.

"Merino prices are as good as we have seen them in a long time but there is a disparity between the increase in prices for merino and a steady downward turn for crossbred wool.

"As a consequence, we have a very poor return to farmers, and they are looking to minimise costs."

He said many farmers were reducing those costs by cutting down on the number of shed staff involved in wool preparation. While there was some demand for better-prepared crossbred wools, buyers were not willing to buy poorly prepared wool, as processing wool without faults was easier.

"We are seeing a growing amount of unsold wool starting to accumulate in wool stores."

He wanted to see more resources made available to encourage more innovative uses for crossbred wool, outside carpet manufacture.

"We are starting to see that sort of innovation in the early stages globally, for products like wool insulation and wool air filters.

New Zealand Woolclassers executive Bruce Abbott, of Mosgiel, said that in many cases, as farmers moved to cut costs, shearing contractors were reducing the number of shed hands. This put additional pressure on woolhandlers, who had to process fleeces into fadges as quickly as possible, often with poor preparation.

"Shearers don't slow down," Mr Abbott said.

He said some farmers were also choosing not to employ woolclassers, who looked after their interests in the shed.

Examples of poor preparation included leaving foreign objects and other contamination such as dags, crutchings and stains in the fleece.

The association has been holding training days for woolhandlers.