The value of grease wool is determined by both qualitative and quantitative evaluation. The price of clean wool (that portion of grease wool which is free of vegetable matter, grease and mineral matter) is based primarily on qualitative factors that determine the end use of the raw fiber. Grade is the most important qualitative factor and refers to average fiber diameter or fineness. Because it governs the minimum thickness of yarns that can be spun, grade is considered wool's most important value-determining characteristic. A minimum number of fibers is required in a cross section of yarn for it to be strong enough for knitting or weaving. Thus, the finer (smaller fiber diameter) grades of wool can be spun into finer yarns than coarser grades.
Other qualitative factors normally considered in pricing wool include length (also included as a quantitative factor), uniformity, strength, crimp, handle, color, character, purity, wastiness and contaminants. Because of the nonwool, lower-valued components of grease wool when it leaves farms and ranches, the quantity of usable fiber must be established before grease price can be determined. The wool chapter contains an example of how to calculate the grease price of wool.
Similar demand problems exist for wool. Wool is a natural fiber with unique characteristics. However, some characteristics are not easily adapted to changing consumer demands. As a result, non-cellulosic fibers (for example, nylon, Dacron and orlon, among others) have been developed and have dominated the fiber market. In 1993, synthetic fibers made up about 66 percent of mill use and 56 percent of domestic fiber consumption. Cotton accounted for 32 percent of mill use and 38 percent of domestic fiber consumption in 1993. Mill use for wool as a percentage of total fiber in 1993 was about 1 percent with domestic consumption at 1.7 percent.
Domestic production of wool has declined as has per capita consumption of domestic wool. As with lamb, however, per capita consumption alone does not depict the demand for wool. When considering wool prices along with consumption, the conclusion is that demand for wool has also declined. As with lamb, one major reason is changing tastes and preferences of consumers.
Synthetic fibers do not simply provide an alternative type of fiber to the textile industry; they represent a whole new technology that has changed the handling and manufacturing of textile products. These new fibers can be tailored to meet changing consumer tastes and preferences rather than requiring discovery of new methods of weaving, knitting or manufacturing as is needed to make natural fibers more appealing. Therefore, introduction of synthetic fibers has greatly contributed to a decline in the demand for wool.
Geographically, wool production is correlated closely with number of sheep. Leading wool-producing states in 1994 were Texas, Wyoming, California, Montana, Colorado, South Dakota, Utah and New Mexico. However, the distribution of wool production by quality varies considerably. The highest valued finer wools, 25 micron or less, represented an estimated 56.9 percent of U.S. wool production in 1994. Four states (Texas, California, Wyoming and New Mexico) accounted for 81.5 percent of all 22 micron and finer wool produced in the U.S. and 64.5 percent of all 25 micron and finer wool in 1994. However, all states produce a mix of fine wools and medium-to-coarse wools.
Sheep producers market wool by a number of methods. Use of private or cooperative wool warehouses is the most important marketing alternative, but wool pools are common in many states. In some cases, wool is pooled in a local market area but sold through a wool warehouse. Descriptive marketing is becoming the preferred method of marketing wools in the U.S. With increasing emphasis on objective measures of grease wool, producers who do not utilize these measures may be at a disadvantage when attempting to market their wools at premium prices.
Most wool moves out of producing areas through merchants directly to central markets or to mills within a short time after it is clipped. Producers of pulled wool (wool pulled from the skin of slaughtered lambs and sheep) sort their product into uniform lots and put it in bags or bales for sale.
Imported apparel wool goes directly to central markets in which it is handled by the same large merchants and manufacturers who handled U.S. grown wool. Imported carpet wool also goes directly to central markets where it is handled by a specialized group of merchants and manufacturers. Domestic and imported wools are assembled in warehouses at the central markets, where they are divided into uniform lots and stored until needed by manufacturers. Wool purchased by manufacturers is bought "in the grease" or clean (in the scoured state).
Wool can be classified into two categories -- apparel and carpet wool. Carpet wool is shorter, coarser and less uniform than apparel wool. Wool is processed by the worsted process or the woolen process. The worsted process uses longer wool fibers and the wool is carded, combed and drawn into a thin strand of parallel fibers which are spun together to form a strong, thin yarn. For the woolen system, a shorter wool is carded and then drawn into a long, softly-twisted strand which is spun into a bulky yarn without the strength of the worsted yarns. Tops and noils are intermediate products yielded by the worsted and woolen processes. Tops are created by carding the longer wools and removing the shorter fibers called noils. Twisted top fibers form rovings which are then spun to make worsted yarns.
Most carpet wool used in the U.S. is imported to manufacture carpets, heavy tweeds and filling material. Some apparel wool is produced domestically, but, the majority (about 88 percent) is imported. Apparel wool is used primarily for clothing such as tweeds, flannels and knits for blankets. Since some mills process wool only as far as top and sell the top to spinners for finishing, trade of intermediate products also is important.
The apparel wool manufacturing industry consists of both the worsted and the woolen manufacturing process. Worsted yarn, spun from fibers that have been carded and combed, results in fibers which are relatively parallel, thus yielding a smooth yarn. Woolen yarns are spun from fibers that have been carded but not combed. Thus, the fibers are randomly arranged, resulting in a relatively rough yarn. Both woolen and worsted yarns are woven into wool and wool-blend fabrics.
The Census of Manufacturers reports the number of establishments primarily engaged in weaving fabrics wholly or chiefly from wool, mohair or similar animal fibers; in dyeing and finishing all woven wool fabrics or dyeing wool, tops or yarn; and those shrinking and sponging wool goods for trade. Number of establishments is an indicator of the structure of the wool processing industry. In 1987, there were 106 companies involved in these activities, with the four largest firms accounting for a combined 55 percent of the value of shipments. This was about one-third the number of companies in operation in 1963 (304). Thus, competition appears to be reasonably keen in the wool processing sector, although the number of firms is declining. The Hirschmann-Herfindahl Index (HHI) is another measure of concentration in an industry along with the concentration ratio. The higher the HHI, the more concentrated the industry. The HHI for the 50 largest wool processing companies in 1987 was 1,180, suggesting that the amount of business activity accounted for by the top-ranked firms is high. In contrast, there were 246 cotton fabric mills in 1987 and 316 man-made fiber and silk fabric mills. The HHI for these firms in 1987 was 640 and 430, respectively.
Competition for Wool
The U.S. produced about 93 million pounds of grease wool (wool removed from sheep, prior to scouring) in 1990. U.S. production accounted for about 35 percent of raw wool used in the U.S., but less than 15 percent of all wool products consumed. With the exception of wool yarn, consumers purchase wool primarily in finished products, especially clothing and carpets and related products. Wool clothing competes with other natural fibers, especially cotton and synthetic fibers. There are two main categories of synthetic fibers -- cellulosic and noncellulosic. Cellulosic fibers were developed earlier than the noncellulosic fibers and appeared in 1910. Trade names for these fibers include rayon, acetate and triacetate. Noncellulosic synthetic fibers have been developed more recently, since 1939. These fibers are truly man-made, since they are synthesized from various chemicals under laboratory conditions forming fiber strands with predictable properties and costs. Fibers in this group include polyamides (nylon), polyesters (dacron and terylene) and acrylics (orlon, acrilan and courtell).
Desirable traits of wool include resilience and draping properties, natural resistance to heat and flame, excellent dyeing properties, resistance to soiling and moisture absorption properties. Recent developments have enhanced wool's ability to hold a crease and keep its shape. Wool is frequently blended with other natural and synthetic fibers to capture the desirable properties of each, resulting in products which meet consumers' needs and preferences.
Average diameter of wool fibers is the most important wool property. Official USDA standards for grades are based on objective measurements. For each grade, there is a range of average diameter and a maximum standard deviation. The use of official grades is declining in importance. More important is a measurement of diameter in microns and fiber variability. Typically, fine wools are those with a fiber diameter of 22 microns or less.