August 15, 2004
By Ross McSwain
August, 2004 - Medium wool, or fleece from blackface sheep and crossbreds, appears to have a more healthful place in the world market, say American buyers and processors. However, more promotional efforts need to be developed in order to gain a higher and more secure market share.
"Blackface wool makes up from a third to half of the U.S. wool supply," reports Terry Martin of Anodyne Inc. of San Angelo, Texas, a buyer of all types of wools for both domestic and export use. "There's a good market for American blackface wool due to the currency difference between the U.S. dollar and the New Zealand dollar. Our number one buyer is China."
Helping to support the U.S. price for wool has been the weak U.S. dollar. The weaker exchange rate favors the purchase of American wool by overseas customers.
"At present, China is buying about 80 percent of our medium wool. The New Zealand wools have gotten too expensive for them," Martin says.
Martin says U.S. medium wools, ranging from 28 to 32 microns, are being used as a blending component in China and India, where much of the wool goes into hand knitting yarns. He noted that Chinese wool processors like American medium wools because the fiber has a lot more loft and a better hand.
The Texas buyer just recently returned from a trip to China and India, and he also attended the 73rd Congress of the International Wool Textile Organization (IWTO) held May 11-14 in Evian, France.
He is among many in the industry who are concerned about the decline in fine wool sheep numbers.
"There are at least 65,000 wool growers in the United States with flock sizes ranging from 10 sheep to 10,000 sheep, depending on where they are (in the United States)," says Martin. "Blackface wool generally is produced by growers of smaller flock size who are interested in producing an animal for the meat. It is this wool that has drawn particular interest from China and India over the last year or so."
Martin thinks more promotion of American wools in the foreign market would help sales and prices.
"There's a good market for wools, and I'm passionate about our industry," he says.
Martin also thinks that efforts by the American Sheep Industry Association's (ASI) Wool Council will continue to build markets for medium wool. He notes that prior to ASI's sponsoring of such programs as the Foreign Agricultural Service and Quality Samples Programs, and other similar programs designed to promote and introduce American wool to new users in foreign countries, the United States had a stockpile of medium and blackface wool.
"This wool was under-consumed by the U.S. textile industry, and its use was dominated by just a few U.S. mills," says Martin. "With the advent of the ASI programs, which 'primed the pump,' so to speak, we have seen a clearing of this stockpile over the last 18 months. Not only has the blackface/medium wool stockpile cleared, prices to growers for this type of wool in many cases have doubled and tripled. In my opinion, the ASI programs have proven to be useful in achieving their designed goal."
Gary Zeilinger of Zeilinger Wool Co. of Frankenmuth, Mich., notes that most of his customers have hobby flocks of medium-wool sheep that they purchase around 15,000 lbs. of wool annually.
Zeilinger is a processor of wool, mohair, alpaca, angora rabbit hair, dog hair and other exotic fibers, and his company also make comforters, mattress pads, bed pillows, quilts and batting for felting and crafting. The firm just recently started knitting wool socks and scarves.
Zeilinger has about wrapped up buying his spring wool needs, contracting medium wools at 55 cents a pound, greasy, delivered to his processing plant. He is still looking for finer grades of Merino or Rambouillet wools and wools from Suffolk sheep.
"We will get it in cardboard boxes, garbage bags, burlap sacks and other kinds of containers," he says.
Zeilinger is concerned about the shortage of shearers. Producers are presently paying from $3 to $10 per head for shearing. However, he says producers apparently will be sticking with blackface sheep, especially Suffolks, "because the lamb business here is tremendous." There's a ready market locally, he says, because of the large numbers of Arabs and Greeks who live in the area.
Zeilinger Wool Co.'s history spans over four generations, having been started by Abraham Zeilinger some 89 years go.
Don Van Nostran, with Mid-States Wool Growers in Canal Winchester, Ohio, says his producers should have a new sense of optimism with wool prices showing a marked improvement over the last eight to 10 years.
While some of the improvement can be attributed to the shrinking wool clip worldwide, other factors have entered the picture, including the loss of domestic mills and the over-capacity of processing space worldwide. He believes the over-capacity problem will continue but is more in line today than it was in the late 1990s.
"While the wool clip is smaller, there is also an increase in demand," Van Nostran stated recently in a wool market update he prepared for a sheep and wool industry publication. "The Chinese are the engine driving the consumption of wool. They are the largest consumers of wool for processing worldwide, and when they are in the market, prices tend to be stronger. In addition, the U. S. economy is improving and Americans are big consumers of finished products."
A major concern for Van Nostran, Martin, Zeilinger and others is contamination of the wool clip from polypropylene shreds that can quickly ruin a mill's fabric run if not discovered and removed in time.
"Polypropylene contamination continues to be the scourge of the domestic wool industry," Van Nostran says. "We have tried for years to eliminate this problem and it just doesn't seem to be getting better."
The most common sources of poly contamination are baling twine, twine strings used for temporary repair and to tie up panels, frayed tarps and improperly disposed of feed bags. The most common poly problems stem from "tail ends" that are cut during the knotting process when baling hay and failure to remove poly twine when grinding or feeding hay.
"Chopping or tub-grinding hay without taking off the twine strings is a real problem," says ASI Wool Quality Improvement Consultant Bob Padula. "The long strings are now shred into small bits and fragments, contaminating the feeding area and the wool."
Padula says that research conducted in the United States has shown that most of the baling twine from the knotting process is found on the belly of the animal.
"When growers remove the belly wool from sheep at shearing and package this separately, they reduce the amount of twine in the higher-priced fleece wool," says Padula. "It doesn't eliminate poly contamination, but it does tend to isolate it into lower-valued wool lines."
Van Nostran says producers must improve their wool clips if they expect to receive good prices in the future.
"Seldom do sheep producers benefit from good lamb prices and wool prices at the same time. Today, we are in that position, but we cannot let our guard down. We, as producers, need to continue to work to improve our wool clip in order to maintain a good reputation with our customers. As an industry, we will all benefit, but it is an individual responsibility," he said.
Van Nostran thinks along the line of Anodyne's Martin in terms of an improved market due to ASI's participation in USDA programs that help build markets for American wool.
"Until we started working with ASI and the Quality Sample Program, we had a number of grades for which it was difficult to obtain price bids," says Van Nostran. "The program allowed us to introduce our wools and cooperate with the foreign buyers to try some of them in their blends.
"We have been able to develop some on-going programs that are taking wools on a regular basis," adds Van Nostran. "This consistency has resulted in better movement of our medium wools and higher prices for producers."
Chase Rich, sales manager of Snug Fleece Woolens Inc. of Pocatello, Idaho, says efforts by growers to produce quality wools would be beneficial to manufacturers because it would ensure quality control.
His firm, which makes wool mattress covers and other specialty items like a very pricey dog bed which sells for $200 or more, will soon celebrate its 20th year in operation. The company started out as in import-wholesale business, importing wool mattress covers from New Zealand and packaging and distributing them nationwide. In 1988, the company reorganized to make its own product line. It uses only American wool.
Rich was reluctant to reveal the cost of the semi-processed wool, but noted that "we have seen some pretty steady increases in wool prices over the last year."
He attributed the price increases to rising shipping costs, and "not to the fact that the grower is ever seeing a dime more. That's unfortunate," he says.
Greg Groenewold, with Groenewold Fur and Wool Co. of Forreston, Ill., sees an improved market for medium wools but he also recognizes that producers must do a better job getting their clip ready for sale.
"Polypropylene is a problem, and we don't want it, but the buyers don't complain about it much because we grade the wool," Groenewold says.
He believes the poly problem can be corrected through educational programs for both growers and shearers.
Groenewold's wool comes from small farm flocks of sheep, numbering from 10 to 100 head. He buys wool at the farm.