Wool supply concern prompts Bremworth to consider contracting farmers

Sheep waiting to be shorn. Photo / RNZ / Carol Stiles

By Sally Murphy of RNZ

Carpet company Bremworth is looking at the option of providing farmers with long-term contracts to secure supply.

Strong wool prices have been subdued for years now - which has led many farmers to leave their wool in their sheds in the hope they will be able to get better prices in the future.

Bremworth chief executive Greg Smith said it had been a challenging time for farmers, so the company wanted to provide more security to them while ensuring a secure supply of wool.

"The foundation of our businesses is 100 per cent strong wool and at the moment, the strong wool industry is under enormous pressure because of prices."

Strong wool was a commodity that was not valued as much as it had been in the past, Smith said.

"And so at the moment supply is critical to our success.

So is farmers getting a fair price for their wool so they can maintain breeding and quality and so, over time we'd like to introduce contracts that provide some surety for them and for us for the future."

He said the company wanted to learn from the success of the merino sector which offers 5-year and 10-year contracts to growers.

"Contracts have existed in some form over time, however, what we're suggesting is what is akin to what we've seen in the fine wool industry where you've got longer term contracts, providing surety for farmers so they can invest in animal husbandry, they can invest in ethics, they can invest in the land and land stewardship."

Smith said there were some threats to wool supply.

"The price of wool is so low that farmers are choosing to change the use of the land and we are seeing a lot more trees being planted where sheep used to be farmed and we're seeing Wiltshire sheep, which don't need shearing, starting to be bred, so that puts our position at some risk.

"So we want to look after the farmers and long-term contracts we think are the best way forward."

Smith said Bremworth intended to talk to farmers about the possibility of long-term contracts and what they could look like next month.

- RNZ