June 15, 2004
By Melissa Schneider, National Livestock Producers Association Correspondent
Center of the Nation Wool, Inc. is in the midst of its busiest season of the year -- shearing, which lasts from mid-February to the first part of June, according to General Manager Larry Prager.
Center of the Nation markets about 4 million pounds of wool per year between its two warehouses in Belle Fourche, S.D., and Billings, Mont. Center of the Nation's market area is mainly Montana, Idaho, Wyoming and South Dakota, but also reaches into North Dakota, Nebraska and Utah, Prager said.
According to Prager, Center of the Nation Wool began as a wool pool created by a group of progressive growers. In 1984, Center of the Nation Wool was officially formed as a private corporation and stocks were sold to sheepmen.
"Center of the Nation is still owned by sheepmen and sheepmen run the board," Prager said. "Throughout the years the sheepmen created a business where a grower can store his wool basically free of charge, have it core tested for quality and have representation when it comes time to market."
Center of the Nation Wool does not process or further handle any of the raw wool that comes through its doors. Prager said that the business focuses solely on marketing.
"All we do is market the wool -- we are not supply driven and we don't handle any retail," Prager said. "It is our job to find the right spot to maximize the value of the wool according to its clean fiber content and length and then to handle the paperwork."
Prager said that Center of the Nation feels that wool production starts on the range. The company does get involved at the producer level if it will help the bottom line when it comes time to sell the raw wool.
"Most of our wools come from a range environment," Prager said. "Growers who can produce genetically uniform groups of sheep can produce more consistent wool, which is an advantage to the market. We help producers select their rams and replacement animals so that they can meet their goals of uniformity and quality."
Center of the Nation doesn't handle shearing for producers, but recognizes the importance of the professional shearing crews who work with the growers.
"Center of the Nation sells the original bag that comes in the door," Prager said. "Producers expect us to secure a good price, so we expect them to do a good job at shearing. Our job is easier when we have better quality wool to sell."
This is Prager's 26th wool season with Center of the Nation Wool at the Belle Fourche warehouse. Prager started out as an assistant manager, running the warehouse and coordinating loading, unloading and handling of wool. He has been general manager since 1993.
"Now my job is basically doing what ever needs to be done," he said. He now handles more aspects of the marketing as managing the warehouses.
"I do some order buying and sometimes we buy wool at the door for cash, but just small amounts," he said. "The majority of our business is on consignment, where the producers retain ownership and consign with us to market their wool."
Another duty handled by Center of the Nation is core testing wool for quality. Prager said wool samples are sent to a lab in Denver to determine how fine and clean the wool is, which serves as an objective measure of quality when it comes time to market the wool.
Shearing is the busiest time for Center of the Nation because that is when the warehouses receive most of the year's wool and when most of it is marketed and delivered. However, the warehouses receive deliveries year-round and are always pursuing marketing opportunities.
"We custom-fit our services to what producers need," he said.
Center of the Nation has also been working hard to attract foreign buyers and expand marketing opportunities.
"We have shipped wool to several foreign buyers, including some in Europe, China and India," Prager said. "We are anxious to create relationships with China and India because their wool markets are expanding."
Prager said these foreign markets are the way of the future, considering the state of the wool industry in the United States.
"We have been in survival mode for many years," he said. "Sheep numbers are declining because of predators and drought so there is less wool to market and it is challenging to maintain wool quality when producers don't recognize the value. In addition, countries like China and India can make textiles more cheaply than the U.S., but they are difficult markets to penetrate."
According to Prager, the National Livestock Producers Association's Sheep & Goat Fund has made this struggle a little bit easier.
"In some cases we move more than $1 million in wool a month, but we may not get paid for 60 days, so securing enough credit to take advantage of big marketing deals can be challenging."
According to Prager, Center of the Nation applied for and obtained a loan from the Sheep & Goat Fund two years ago.
"The loan has been very important to our business because it allowed us to refinance some of our debt in order to free up capital for operations. This in turn has allowed us more freedom to participate in more marketing opportunities. It has provided us with a source of funding we couldn't get with a local bank."
Prager said he would recommend the NLPA Sheep & Goat Fund to other members of the sheep industry.
"NLPA worked with our local bank to establish the loan and we've worked with the same bank officer since day one," he said. "We couldn't have hoped for a more seamless process ? it worked even better than we had anticipated."
For more information about the NLPA Sheep & Goat Fund, visit www.nlpa.org
on the World Wide Web or call (800) 237-7193.