Wool auctions system contributing to poor returns - farmer

Sheep farmer Toby Williams says he's "got the line dangling out into the markets" hoping to sell his wool at higher prices. Photo / RNZ / Jimmy Ellingham

By Monique Steele of RNZ

A prominent sheep farmer who has boycotted wool auctions because of poor returns says he has no regrets.

Tai Rāwhiti farmer Toby Williams, the meat and wool chair at Federated Farmers, got so fed up with low returns for his wool that he stopped selling it through the normal auction system a couple of months ago.

Selling mostly by word of mouth and directly to companies, Williams - a fifth-generation farmer at Pihitia Station up the coast from Gisborne - said selling required more patience now.

“We’re now waiting for someone to nibble at the worm really, and we’ve got the line dangling out into the markets.”

Williams said he put the word out through networks like Wool Impact, in efforts to build new customer relationships.

“We actually sold one small line of nine bales to an international company, just straight to them rather than through the auctions,” he said.

“It made about the same as what you’d expect at the auction, except we don’t have the fees and charges that go along with it for putting it through there - so it’s a waiting game.”

He said a recent conversation with a wool exporter convinced him he was doing the right thing.

“We’re talking about balance sheets and we were talking about how poor sheep and beef farmers’ balance sheets are currently sitting and he made the remark that their balance sheet looks pretty good.

“And it really got my hackles up a bit.”

Williams said farmers were not being served well by the wool auctions system.

“[Companies] drive the price down to farmers rather than tell the customers you need to pay more,” he said.

He said farmers had to gain back control and only sell at prices they were happy with - which in turn could push prices higher.

“I think it’s an opportunity here for farmers to hold onto their wool, talk to their agents.

“Even if you’re still going to use the auction, hold onto your wool and say, look let’s wait.

“I’d love the money in the bank account but maybe we can squeeze a few extra cents out of this or future dollars out of this by being a bit more patient.”

Williams said he liked the idea of a new farmer-led collective in Aotearoa managing a “pool of wool” to secure supplies together at the right price for producers.

- RNZ