BWMB expects slight fall in wool clip next year
(l-r) Mike Petersen, Chairman of Meat and Wool New Zealand & Frank Langrish, Chairman of the BWMB.
The implications of declining sheep numbers in the UK and New Zealand were discus at the British Wool Marketing Board's Annual Conference in Bradford.
Ian Hartley, Chief Executive Officer of the BWMB, said the reduction in the national flock in the UK would reduce the 2008 clip weight to 31.5 -32 million kilos.
"Between 2005 and 2008 both the clip weight and number of producers has reduced by 14%. These figures highlight the problems faced by the Board in planning its future operations, when 76% of our costs directly relate to the number of depots and their staffing levels," Mr Hartley told the conference.
He explained that significant changes to the Board's depot structure had been made to save costs. Inevitable redundancies and non-replacement of certain executive posts at Bradford had saved £700,000-800,000.
"It takes time to change the infrastructure; we cannot react to short-term events. Critically, if we want to maintain an adequate level of service to our producers we must have a basic depot and intermediate centre structure."
Transport costs had also been reduced by using compactors which enabled loads of 15-16 tonnes to be transported.
Guest speaker Mike Petersen, Chairman of Meat and Wool New Zealand, told the conference "that the situation in New Zealand mirrors that of the UK - declining sheep numbers, poor 'strong' wool prices and minimal producer returns from the sheep sector. He forecast that for the coming year lamb numbers would be down by 6 million, and ewes down by 3 million."
Mr Hartley said there was a close correlation between the movement on the price of wool in New Zealand and the UK. "But wool prices in both countries reflect a historically low level which reflects a fall in demand worldwide."
Mr Hartley called for more vigorous worldwide marketing of wool but said the Board had been praised by the industry for its "About Wool" brochure which had now been translated into five languages.
Wool prices had recovered slightly over the last 24-months - albeit from a low level. Prices had increased by 10p a kilo but had eased back over the last two months. The conference heard that the Board was working with a leading bed manufacturer to promote its mattresses filled with British wool and that B and Q was now selling wool insulation produced by Cumbria-based licensee Second Nature.
BWMB Chairman Frank Langrish said he expected another slight fall in the wool clip next year with stabilisation - or even a small increase - the following year.
"It's imperative that we have an organisation for the handling of our wool clip that all producers support, and that the organisation goes forward. Another decrease in the number of sheep and the weight of wool puts more pressure on the sheep farming infrastructure, from abattoirs to wool depots and to the wider textile industry."
Mike Petersen told the conference that a new wool marketing structure was being launched in New Zealand, aimed at improving producers' returns and to capitalise on the growing consumer commitment to sustainable products.