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John Hargreaves’ family has farmed sheep and beef in Kaiwaka, north of Auckland, for generations. In the 1960s they had 3,000 ewes but in the decades since, as the value of wool declined and shearing costs grew, his flock slowly decreased to just over 1,700.
But now, for the first time in roughly six years, his wool is making money.
New Zealand’s once-famous wool industry is showing signs of a comeback, after the mounting costs of producing synthetic fabric triggered global demand for natural fibres.
“We’re now covering our shearing costs and making some sort of a profit,” Hargreaves says.
Sheep farming and wool production dominated New Zealand’s agricultural industry for nearly a century, with the number of sheep peaking at more than 70m by the 1980s – or roughly 22 sheep to every human.
The economic policies of the 1980s, and a drop in global demand driven by the uptake of synthetic alternatives, drove down the price of wool. More recently, farmers have converted their pasture into more lucrative forestry blocks and dairy farming. There are now just over 23m sheep, or 4.5 sheep to every human, according to StatsNZ.
But Dave Burridge, national wool auction manager for PGG Wrightson, says the tight supply of wool globally and rising oil prices driven by the Middle East conflict are pushing up demand for wool.
“The raw material used to produce nylon and polyester fibres, they’ve all gone up in price,” pushing buyers from countries such as China and India towards natural fibres, he says.
Major global brands are also seeking out New Zealand wool. In April, French luxury brand Chanel signed an investment deal with Central Otago’s Lammermoor Station, to part-own and support the production of premium wool. American outdoor clothing giant Patagonia visited New Zealand in June to eye up wool partnerships, and in May, Turkish carpet manufacturer Kalida Hali struck a deal with Wools of New Zealand.
In June, the country’s wool fetched the highest prices in 15 years at the PGG Wrightson national auction – ranging from NZ$6.47 to NZ$6.80 a kilogram for crossbred fleeces, with top-quality, good-colour fleeces reaching nearly $8 a kilogram.
There is still volatility in the market. Wool prices dipped at the most recent national auction, held in Christchurch on 30 July. The drop, partly driven by buyers stepping back after filling their commitments earlier in the season, was unsurprising, Burridge says.
“There was always quiet concern by wool industry players that the price had gone up very quickly, like unparalleled rises that we’d never seen before, and … that things were going to probably come off at some stage.”
But prices are still up $2 on a year ago and Burridge is optimistic for the industry’s future.
“I feel really excited about the long-term prospects for wool, and convinced that wool will have its day in the sun again.”
Federated Farmers’ wool and meat manager, Richard Dawkins, says the strong wool prices have buoyed farmers and there is cautious optimism for the future.
“That continued awareness globally of sustainability and the attributes of wool – that is a positive outlook,” he says.
Meanwhile, demand for New Zealand’s high-quality wool is increasing within India, New Zealand’s second-largest wool market, Dawkins says. A recent trade deal between the two countries will eliminate tariffs on wool, which is expected to strengthen exports.
New Zealand’s culture now needs to re-embrace wool, to help bring stability to the market, Dawkins says.
“This nation was built off the back of a sheep, built off wool … and that story’s been lost over the decades. It’s one thing asking the world to buy our product, but we need to embrace it ourselves as well.”
