The results of Thursday's auction in Christchurch highlighted the reality that wool growers remained at the mercy of a volatile selling system. Wool prices continued to trend downwards to disappointing and concerning levels, coupled with high passings or unsold wool.
"Wool growers are the people who will have to absorb the critically low prices which now put wool returns at close to or below the cost of production. Aside from the difficulty of running a business with wild swings in returns, prices at these levels are not sustainable for growers.
"Without doubt, this reinforces the need for change: that is, taking a more proactive, commercial interest in our product beyond the farm gate, investing in in-market activities and creating demand for a fantastic product," Mr Shadbolt said in a statement.
Support from growers and industry to Wools of New Zealand's strategy to involve growers commercially had been positive. Growers were concerned about ongoing price volatility and loss of value, which equated to about $2.50/kg since October 2011, the equivalent of $40,000 annually from the average grower's returns.
"As wool growers we must realise the importance of being organised, investing and committing to marketing initiatives, including brands, that will assist to stabilise prices at a sustainable level for growers and our global customers. Strong wool is one area in which New Zealand has an indisputable quality advantage over the rest of the world. As such, it has a critical role to play in our on farm profitability," Mr Shadbolt said.
