Market Report - PGG Wrightson
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Wool News Winter 2020
Market Report
– Record low prices begin to edge up
As you will be aware, this year has been Growers putting wool up for auction are
extremely difficult for wool. generally prepared to meet the market at
Sales were suspended for six weeks in late current levels realising low passing rates.
March as the international wool industry set Consistent with more normal conditions, top
out to combat the challenges created by the wools with low vegetable matter content
COVID-19 pandemic. At the resumption of and good colour are in steady demand and
New Zealand’s market, strong wool prices achieving premium returns compared to
were down 25 to 30 per cent on what were less sought-after types. Crossbred prices,
already record low levels prior to the crisis. however, remain largely unsustainable given
Prices dropped a further 10 to 15 per cent harvesting costs.
throughout June although have more than Fine wool prices are largely driven by the
recovered throughout July and into early Australia market and have undergone a
August to prices closer to pre-COVID levels. similar decline to that of crossbred wool
Featuring in this albeit minor recovery, all prices here in New Zealand. Early August
export companies are participating and Australian fine wool prices are around 30
bidding enthusiastically at auction. New per cent back on pre-COVID levels and 40
growers throughout New Zealand are being
business written out of India and China has percent back on those achieved last year.
underpinned by forward contracts, which
provided the impetus, accounting for the NZ growers will be watching price trends
many growers have elected to take.
bulk of the market. Wool deliveries to Europe with some apprehension as we ‘kick off’
have also resumed with pre-COVID existing our fine wool season which runs from Late Grant Edwards,
orders flowing through the supply chain. August to November. Fine wool returns to PGG Wrightson Wool, General Manager.
Helping grow the country
New research further reinforces wool’s eco-credentials
Findings from a new study further Previous studies show that wool biodegrades were examined using scanning electron
demonstrates the eco-credentials of in the sea. This new study measured its rate microscopy and energy-dispersive X-ray
natural fibres. of biodegradation relative to competing spectroscopy.
fibres, and the residues produced. One of
Recently reported research, undertaken by Results showed that both wool types
the main objectives was to test the theory
AgResearch and funded by Australian Wool biodegrade to a high degree, as does the
that machine-washable wool, treated with
Innovation (AWI), showed that both machine- a polyamide resin to prevent it felting might cellulose-based viscose rayon, while synthetic
washable and untreated wool fibres readily create a form of microplastic pollution. fibres show little or no biodegradation.
biodegrade in the marine environment, in Further, the application of a thin polyamide
contrast to synthetic fibres that do not. Six fibre types from comparable lightweight
base-layer fabrics were studied over a 90- film to make wool machine-washable actually
Each year between 0.6 and 1.7 million tons of day trial period. These included machine caused the wool to biodegrade quicker
microfibres are estimated to enter the oceans, washable and untreated Merino wool, than untreated wool, probably because the
much of it shed when synthetic textile apparel viscose rayon derived from plant sources treatment removes some of the fibre’s cuticle,
is laundered; a growing concern for brands and three synthetic fibres: polyester, nylon rendering it more susceptible to microbial
and consumers. and polypropylene. Residues from each degradation.
Pandemic presents challenges – and opportunities
PGG Wrightson’s International Sales and through this unprecedented period, therefore
Marketing arm Bloch & Behrens has been at enabling them to honour their contracts. We
the sharp end of the covid pandemic, with have increased flexibility around the delivery
numerous and multifaceted challenges at of existing shipments, while occasionally
every point in the supply chain. Wool sales allowing slightly longer payment terms. We
were massively disrupted, with scouring have successfully done this without affecting
on hold during New Zealand’s lockdown. our growers with contracts, which in turn
Our customers in the United Kingdom and has ensured growers have been getting paid
Europe were locked down at the same time, without delay.
with factories shut and business at a standstill. Working with our international customers we
Because shipping from New Zealand to managed to sign up some very good new
Europe takes six to eight weeks, Bloch & business, which enabled us to offer fresh
Behrens’ customers were still receiving lambswool grower contracts for 2021. These
wool during their lockdown period, creating contracts proved to be very popular, and
stockpiles at the port or in the mill. This, provided substantial premiums compared to
combined with limited new orders and delays current auction levels.
to existing yarn and product orders, meant We are pleased to have turned a challenging
most customers faced serious uncertainty situation into an opportunity to cement
around cashflow. our relationships with key customers, and
One of Bloch & Behrens’ strengths with its protect the interests of our growers and our Palle Petersen
loyal and well established customer base contracts. General Manager
is that with each of our customers we have Bloch & Behrens Wool (NZ) Ltd
found ways to tailor solutions and help them
Helping grow the country
Report points way forward for New Zealand strong wool
The government convened the Wool Three key recommendations for action are to: confident that these recommendations
Industry Project Action Group to prepare • Develop a market-focused investment case will drive our industry forward, ultimately
recommendations for the future of New and strategic roadmap for the strong wool delivering better returns for growers,” he says.
Zealand wool, particularly focusing on strong sector.
wool. PGG Wrightson Wool General Manager
• Establish the capability necessary to get
Grant Edwards was a member of the group,
the sector match fit and ready for the
which presented its recommendations to the
opportunities ahead.
Minister for Primary Industries recently.
• Establish a governance and coordination
Building on New Zealand’s safe and reliable
capability.
reputation, the group’s report recognises the
evolving consumer mindset that places a Grant Edwards says the group’s work has
high value on products that enhance family been well received.
safety and health. “We were careful to ensure that the
Acknowledging that attempts to respond recommendations plotted a simple and
to increased demand for synthetic fibres realistic strategy towards a better future.
have previously failed, leading to a long- “We want to engage global consumers, and
term contraction of the strong wool sector, alongside them map out strategic ways
the group says ‘we are on the cusp of to tell the story of New Zealand wool,
a natural fibre renaissance led by more bringing all its excellent characteristics to
environmentally and socially conscious the fore; and we need to make sure the
consumers and that a new approach is sector has the capability, through the
needed.’ This approach, it says, should likes of industry training and research
incorporate the concept of Te Taiao: respect and development, to capitalise on
for and harmony with the natural world, what could and should be a bright
which is the basis of its mission: ‘capturing future for our natural fibre.
the hearts, minds and values of consumers “Feedback since the report’s
who love natural, sustainable materials.’ publication has been positive. We are
Maintaining preparation standards Banking details sought
Despite low crossbred prices Growers supplying PGG Wrightson Wool are asked
and fine wool heading in the to advise bank account details to enable the
same direction, growers need company to pay wool proceeds more efficiently.
to stick to a high standard of
wool preparation. With banks moving increasingly towards online
We need to maintain New services, the concept of the ‘wool cheque’ is now
Zealand’s reputation for high largely historical. In line with that, we are anxious
quality product and take to capture correct banking details for all suppliers.
advantage when the recovery If we don’t have your correct details, please
begins. That begins on farm make contact so your future payments can
and in the woolshed.
be made as quickly and easily as possible.
PGG Wrightson have Proudly Sponsored IHC’s Calf and Rural Scheme for 35 years.
With your support of IHC’s Calf and Rural Scheme, you can help rural people with
intellectual disabilities in your community.
:
Donate a sheep, lamb, calf, virtual lamb or virtual calf and IHC will turn your gift It’s easy, go to
into support for people living with intellectual disabilities.
z/pledge
www.ihc.org.n
Head to www.ihc.org.nz/pledge or contact your local PGW Livestock rep today
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One animal can change a life!
Helping grow the country
Design Spun – adding value for wool growers
An Irishman, an Englishman and a Kiwi walk
into a bar… or in this instance walk into
Design Spun, one of New Zealand’s two
remaining spinning mills, in Onekawa, Napier.
Peter Chatterton, the self-described ‘Skinny
Pom’ of the three, takes up the story.
“A group of Perendale sheep farmers started
Design Spun in the late 1960s to add value
to their wool clip. In the early 1980s they
grew to a level to enable building their
own mill. Unfortunately, that was when Peter Chatterton, Mark Hunter - B&B North Island wool
Chinese manufacturers started to export, buyer, Allan Jones - PGW North Island Wool Manager.
ushering in the era of free markets and
globalisation, effectively swamping smaller North Island Wool Manager Allan Jones
producers in other countries. At that playing a key role throughout, and Palle
stage New Zealand had around ten mills. Petersen of the company’s export arm
Now there are only two of us,” he says. Bloch & Behrens also featuring strongly.
After an ownership change in 1996 Irishman “Palle has been extremely good to deal
Ian Kelly, Kiwi Brendan Jackson and Peter with. We work alongside him to help our
undertook a management buyout of Design mutual grower clients. It is a relationship
Spun. They still run the company, and as Peter that benefits all parties,” says Peter.
says are still operating, assisting growers to
realise added value and profit from their clip.
“Design Spun is a speciality yarn spinner,
producing worsted, modified worsted and
fancy yarns. At the fine end we process
15.8 micron merino, going right up to 36
micron crossbred wool, including all points
between. We also spin blends with mohair,
alpaca, silk, possum fur, and occasionally
cashmere, each generally blended with wool
to achieve a particular quality for our clients.
“Sixty per cent of our business is in the hand
knitting sector with the balance going into
weaving, hosiery and commission contracts.
Design Spun’s contracting business has
increased over the last ten years, taking fibre
Set up in 2011, retail shop and online store
from growers on both sides of the Tasman
Skeinz is a growing addition for Design
and turning it into yarn or finished products,
Spun. This year, alongside the whole trade in
including socks, garments and blankets.
Australasia, Skeinz has experienced the highest
“We develop close relationships with all demand for over 30 years as the lockdown
sorts, with merino and crossbred growers; encouraged many people to return to crafting.
alpaca and mohair farmers,” explains Peter.
Design Spun is a PGG Wrightson Wool
PGG Wrightson has been integral to Integrity™ brand partner, allowing them the use
Design Spun for more than 40 years, with of the Wool Integrity brand on selected yarns.
Helping grow the country
Progressive approach sets Creekside well for productivity
Adam Lindsay has owned Creekside Farms will be a benefit should wool prices recover,”
on the Maniototo Plains near Ranfurly Adam says.
since 2011. Rob Cochrane admires Adam’s farming skill
Creekside primarily runs Perendale sheep, and approach.
with around 11,000 breeding ewes on the “He is a progressive farmer, always looking to
2,000 hectare property. In the nine years he make productivity gains. His development
has farmed the property Adam has made of the farm has increased its capacity to
a significant impact, increasing drought sustain stock, ensuring increased production,
resistance by augmenting an irrigation whether protein or fibre. Regarding wool,
system that previously covered 65 hectares, Creekside’s clip weights relative to stock
digging a 1.5 million cubic metre storage numbers are excellent.
pond and installing four additional pivots to
“Well respected among local farmers, it
now irrigate 520 hectares.
is a pleasure to work with someone who
“We have water rights to draw from the understands how to make the best of his
Kyeburn River, which runs alongside our property, his stock and his productivity. In
eastern boundary, pumping to the top of the the hands of farmers like Adam, the future of
hill to fill the pond through winter and spring. Graeme Bell PGW Wool rep and Adam Lindsay, owner of
New Zealand’s primary production sector is Creekside Farms.
We gravity feed to the pivots during summer. positive,” says Rob.
Irrigation enables us to make operational
decisions on our terms, unconstrained by
adverse weather,” says Adam.
As a consequence, Adam’s farming approach
is far more progressive than if he were
constantly guarding against the risk of
drought. PGG Wrightson plays an important
role in assisting this, with Senior Livestock
Agent Ryan Dowling, Wool Representative
Graham Bell and Wool Procurement Manager
Rob Cochrane among Adam’s trusted
advisors.
“Although wool is at a low point, as and when
it rebounds, I am confident of making the
best of it. Currently, with the wool cheque
being insignificant, profitability rests on red
meat returns. Development of Creekside is
therefore focused on growing more protein.
However, we also grow more fibre as a
consequence of the new irrigation, which
Helping grow the country
Staff profile: Rosie Moore
Responding to the pull of wool
“My parents have an eight hectare property. “Even with my degree, I was starting at zero
We always had horses, would raise pet lambs with wool. I did understand production, and
each year, and hand milked a house cow. It was used to dealing with farmers, though had
was a tiny taster of what farming is really like: so much to learn. Doing the job has increased
the sanitised version,” she says. my knowledge and through support from
PGG Wrightson, in January I started the two
Rosie wanted more than a taste. Not realising
year Southern Institute of Technology wool
it was possible to study farming as a degree
handling course with Laurie Boniface,”
she originally planned to do veterinary
says Rosie.
science, then came across agricultural
science at Massey, which was exactly what As a recent convert, her enthusiasm for wool
she wanted. knows no limit.
“All the talk about the environment and
“I worked on farms through uni, though
sustainability: our industry is doing it already.
not much with sheep and beef and almost
We know how wonderful wool is, now we
Rosie Moore is an administrator for nothing with wool. In three years through
need to make sure that message reaches
PGG Wrightson Wool in Napier, a job she my degree, I only had two lectures on wool. I
the average consumer. Wool ticks all the
started in July 2019. didn’t have any idea there were so many jobs
boxes. How do we put that story out there,
“My main role is wool administration in the in the wool industry. All the focus is on dairy,
particularly overseas? I’ve lived overseas, and
Napier office, which covers everything from and sheep and beef to a lesser extent. As for
the awareness is even lower there. You can’t
wool sales to putting the catalogue together wool, we just didn’t hear about it,” she says.
go into a shop and buy the lovely merino
for our fortnightly auctions. Graduating in 2016, she spent a year clothing like we can,” she says.
“Being involved in typing and valuing the travelling, working on farms in the United Rosie reckons the industry offers plenty
wool for auction, and helping on auction Kingdom and France, before coming home to of opportunities.
day, means I follow the process all the way a job at Waiterenui, a large Hawke’s Bay sheep
“Sometimes you have to go looking for them.
through from when the wool enters the store and beef farm and Angus stud.
Even though there are challenges at the
to when it is sold at auction. I also deal with “That was my first real exposure to moment, and everyone else who works here
the grower contract wool, which we supply to shepherding, and it was a great introduction can remember the good times, I’ve come in at
our export company, Bloch & Behrens, serving that I really enjoyed, though I wanted to move rock bottom, and I can see it is only going one
as their contact point,” she explains. beyond being on the farm,” she says. way from here.
Rosie grew up on a lifestyle property in Her present job was the only one Rosie “Sometimes people get sick of me banging
Central Hawke’s Bay. Although hers is not a applied for. She hit the bullseye first time, and on about wool, but I’m not making any
farming family, she loved the rural life. loved it from day one. apologies,” she says.
Helping grow the country
Wool industry
‘goods train’ hits
global pandemic Contact
Alexandra
As the global COVID-19 pandemic • Clothing retail sales for the year to May
continues, the International Wool Textile dropped by as much as 38 per cent in Graeme Bell 027 650 2900
Organisation (IWTO) has evaluated its major wool consuming countries, driving Alistair Flett 027 432 5369
ongoing impact. Wool growers, brokers, many famous tailored apparel retail
processors and manufacturers have all brands to the brink of bankruptcy, while Central Hawkes Bay/
been adversely affected, it reports. sales of floor-coverings fell similarly. Dannevirke
Impacts of COVID monitored by IWTO According to IWTO: “The wool supply chain Stephen Fussell 027 595 3351
include: includes tens of thousands of wool farmers
and thousands of other companies Christchurch
• Australian wool prices falling by 36 per
cent, and as much as 47 per cent involved in transforming raw wool into Peter McCusker 027 432 4926
elsewhere throughout the world. This textiles. The supply chain resembles a long Doug McKay 027 432 6910
has prompted Wool Producers Australia goods train. Signals from one end take a Rob Lynskey 027 591 8454
to forecast a further decline in what are long time to reach the other. With wool
already 95-year low production levels. farmers each making their own decision Dunedin
about selling product, no single
• Orders for wool selling agents and Kevin Waldron 027 432 0117
organisation can stop this.
buyers plunged, first from China, then Feilding/Taihape/Whanganui
spreading through east Asia, India, “The goods train that is the global wool
Europe and elsewhere. industry has hit a brick wall, but the back Ian Hopkirk 027 702 9496
end is still moving forward. It is vital that
• Wool processors’ order books shrank 30 information about the impact of the crisis Gisborne/Wairoa
to 40 per cent. is provided quickly to all involved, Shane Horne 027 598 6540
• Wool clothing exports from China were particularly back to the wool farmers, so Chris Payne 027 956 5192
down 33 per cent in the first four months they can make fully informed decisions.”
of 2020. Gore
Jared Manihera 027 226 0263
Hawke’s Bay/Taihape
Andy Anderson 027 958 2215
Responsible Wool Standard gains momentum
Invercargill
Created in 2016 at the request of global
Stuart McNaughton 027 435 0993
brands demanding higher than ever
Daryl Paskell 027 548 3469
assurances for their wool products, the
Responsible Wool Standard (RWS) is the Lawrence Paskell 027 434 7641
only truly global wool assurance standard. King Country
RWS is a tool used to certify and recognise
the best practices of farmers on a global Paul Terry 027 498 6618
scale. It ensures all points on the supply Michael Youngman 027 273 5660
chain are certified to the highest standards.
Masterton
Other global standards, such as the
Responsible Down Standard and the Marcus Loader 027 448 3250
Responsible Mohair Standard, have both North Auckland
been developed by the same governing
body in recent years. Henry Bradfield 027 535 1924
New Zealand farmers are well placed to Timaru
meet the RWS standard, which enables
Ange Armstrong 027 436 2603
farmers to differentiate their wool as ‘RWS
Certified.’ Waikato/Bay of Plenty/Taupo
Demand for RWS wool is growing. Any Maree Mather 027 809 3356
growers interested in learning more should
contact us: we can help explain and guide Whanganui/Taranaki
you through the process. Eric Constable 027 440 9784
As Bloch & Behrens is RWS certified, we are
well placed to market RWS wool.
You can learn more about the RWS here:
Freephone 0800 497 496
https://textileexchange.org/responsible-wool/ Palle Petersen GM Bloch & Behrens with www.pggwrightsonwool.co.nz
RWS certified wool bales ready for export.
Helping grow the country
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