Crossbred wool farmers feel financial pinch

Some crossbred farmers are considering limiting their use of woolhandlers to cut costs where...
Some crossbred farmers are considering limiting their use of woolhandlers to cut costs where possible, as they are receiving so little for their fleeces. PHOTO: SRL ARCHIVES
Southern Rural Life reporter Yvonne O’Hara  looks at  issues affecting the shearing sector, 

particularly training and crossbred wool returns.

Robbing Peter to pay Paul does not make financial sense when shearing crossbred sheep.

Although the issue was not common at present, some crossbred farmers might be looking at cutting costs and asking their contractors to limit the supply of woolhandlers to their sheds, New Zealand Shearing Contractors Association president Mark Barrowcliffe said

More were likely to be considering that if the price they received for their wool did not improve and shearing, transport and associated costs were not recovered.

There was little demand for crossbred wool at present, especially as many overseas markets had shut down because of Covid-19.

"I suggest that while they may save a few dollars here and there, when it is hard to sell something, the well-prepared wool sells first.

"It is robbing Peter to pay Paul.

"They are not going to get a lot for their product but it will be less if they don’t prepare it.

"A well- prepared clip will keep better and sell better than a less well-prepared one so it is still worth doing."

The association was keen to promote better preparation to ensure the quality remained high, even though the "supply chain is jammed at the moment".

PGG Wrightson’s South Island sales manager Dave Burridge said the crossbred industry was in a "perilous" situation with many farmers struggling.

"There are probably a number of growers considering their costs and limiting the number of woolhandlers to reduce overheads.

"There will probably be more of that going forward."

Crossbred wool was fetching about $1.30 to $1.50 a kg greasy at the moment.

As of July 16, the South Island sale of 33 to 39 micron wool fetched $1.58 to $1.82 a kg, clean, which was up 2% to 4% on the previous sale on July 2.

"This is the worst it has ever been.

"However, we are still seeing acceptable standards of preparation as part of best practice for crossbred wool, as opposed to excellent standards.

"Most industry participants understand there is probably going to be a level of compromise needed."

In addition to overseas Covid-19 lockdowns and mills shutting down, which affected the demand for crossbred wool overseas, Europe was moving through its holiday season and that had an influence in the level of activity in the market place.

Shearing contractor Dion Morrell, of Alexandra, agreed not preparing crossbred fleeces properly did not make financial sense.

A properly prepared fleece was worth more to buyers than one that was not.

"I would hate to be a farmer right now, trying to make sense of crossbred wool.

"I really feel for them, as they have this fantastic product and it must be incredibly frustrating," Mr Morrell said.

Add a Comment

Sponsored Content