Contemporary issues in the Australian wool industry Dr Kerry Hansford Quality and Training Program Manager Australian Wool Exchange
Contemporary issues in the Australian wool industry � 1. Changing wool industry demographics. 2. Wool supply. 3. Fibre identity. 4. Affluent consumers with a social conscience.
Contemporary issues in the Australian wool industry � 1. Changing wool industry demographics. 2. Wool supply. 3. Fibre identity. 4. Affluent consumers with a social conscience.
Within Australia � • Farming population is ageing Ø In 2001, 68% of self-employed sole operators and employees were 45 years or older Ø 2007 Government walk-off subsidy • Increase in size of farming operations Ø Between 1993 and 2004, farming enterprises with an income greater than $400,000 increased from 12 to 20% of total • Farms that cannot scale up, off-farm income is increasing Ø In 2004, 40% of farming enterprises with an income less $100,000 sourced 91% of their income off-farm
Within Australia � • Reduced Australian value-adding Ø Only a few processing companies left in Australia, some relocating overseas • Decreased number of wool industry companies Ø Consolidating smaller companies into larger ones Ø Operations closing down
Outside Australia � • Traditional markets (Europe) less active • Approx. 70% exported to China (250-300mkg c.f. 60mkg Italy) Ø 50% consumed domestically. 50% exported with Japan a major destination • Wool manufacturing demand in China expected to nearly double over 5 years to 2010 Ø Major retail markets Europe, China, Japan, USA • Emerging supply chains (India, Vietnam, Sri Lanka as well as Bangladesh)
Wool Exports by Country � 700 Wool Products Exported (M kg) China Italy Japan Other 600 500 400 300 200 100 0 6 8 0 2 4 6 8 0 2 4 6 8 8 9 9 9 9 9 0 0 0 0 9 9 9 9 9 9 9 0 0 0 0 1 1 1 1 1 1 1 2 2 2 2 Year
Contemporary issues in the Australian wool industry � 1. Changing wool industry demographics. 2. Wool supply. 3. Fibre identity. 4. Affluent consumers with a social conscience. 5. The environment.
Wool Prices in USD and AUSD � 1,400 Eastern Market Indicator (c/kg clean) EMI AUSD EMI USD 1,200 1,000 800 600 400 200 0 16/12/1983 16/12/1985 16/12/1987 16/12/1989 16/12/1991 16/12/1993 16/12/1995 16/12/1997 16/12/1999 16/12/2001 16/12/2003 16/12/2005 16/12/2007
Decline in wool production � Pejar Dam Near Goulburn NSW • On-going drought (inconsistent seasons) • Low wool prices • Higher prices for other agricultural commodities Drought-affected land near Cowra NSW Photos: Blog - www.israelated.com/node/3412
Wool prices & production since 1983 � 1,400 1200 Australian Wool Production (M kg greasy) EMI AUSD Wool Prod Eastern Market Indicator (c/kg clean) 1,200 1000 1,000 800 800 600 600 400 400 200 200 0 0 3-Feb-89 16-Nov-00 16-Dec-83 5-Sep-86 14-Jun-91 15-Oct-93 24-Jan-96 15-Oct-97 12-Aug-98 6-May-99 15-Feb-00 14-Sep-01 9-Jul-02 1-May-03 4-Mar-04 15-Dec-04 19-Oct-05 23-Aug-06 13-Jun-07
Change in diameter profile � 1993 – approx. 8% less than 19 µ m n 25 % Australian Wool Clip 2006 – approx. 31% less than 19 µ m n 20 15 10 5 0 5 6 8 0 0 9 0 1 2 3 4 . 1 2 2 2 2 2 2 2 3 3 8 / / / > 5 7 9 1 2 2 2 < Diameter ( µ m) Note : Australia produces approx. 25% world’s greasy wool and 60% world’s Merino wool
Change to sheep meat breeds (shedding) � Damara Ewe Lambs Dorpers Merinos with Damara Cross Lambs
Dark and medullated fibre contamination � Scoured Wool Yarn Fabric Fabric
Contemporary issues in the Australian wool industry � 1. Changing wool industry demographics. 2. Wool supply. 3. Fibre identity. 4. Affluent consumers with a social conscience.
World fibre production since 1900 �
How is wool viewed? � Negative perceptions • Compared with man-made fibres, wool: Ø Is highly variable in its physical attributes ( e.g. diameter, length, strength, level of impurities such as grease, dirt, vegetable matter ) Ø Requires long and complex steps in processing Ø Is often considered to be itchy and prickly, heavy weight, not suited to summer, formal, expensive, hard to look after…..
Enhancing wool’s reputation � Positive qualities • Man-made fibres have been trying to emulate many of wool’s natural properties: Ø Insulation, resilience, moisture absorption, moisture buffering, odour absorption, breathable, flame resistance, therapeutic, renewable, biodegradable, controlled felting….. • Wool industry continues to address: Ø Improved comfort ( softness next to skin and fabric handle ), easy- care ( machine washability, tumble drying, crease resistance ), pilling resistance, light-weight, shape retention, wrinkle recovery, colour fastness…..
Versatility, performance, beauty Photos: M. Campbell, Taking Wool into the 21 st Century, 2004
Contemporary issues in the Australian wool industry � 1. Changing wool industry demographics. 2. Wool supply. 3. Fibre identity. 4. Affluent consumers with a social conscience.
Attitudinal changes with increased wealth Doing good. Environment, Self-actualisation animal welfare, fair trade Esteem needs Quality standard, luxury (status) Social needs Country, region (sense of belonging) Safety needs Food safety reassurance Physiological needs Food, shelter, clothing (calories, protein, water) Maslow’s hierarchy of needs
Challenging how industry operates
Organic, ethical, sustainable • Defined as farming without the addition of artificial chemicals. • Pest, disease and weed control to encourage and maintain natural biological processes. • Aims for optimal production rather than yield maximisation. • Seeks to operate as a closed system, using renewable resources and best environmental management practice. • Produced according to recognised animal welfare standards. • Certifiable: National Standard for Organic and Biodynamic Produce • Note: “Organic certification” is not a guarantee of the wool fibre’s characteristics. Source: S. Seaman, Organics and Food Industry Development, NSW Department of Primary Industries
Continuing trend? Recent news clippings (Oct 2007): • Buyers seek out sustainable fabrics (France) • Organic cotton production climbs to 53% (USA) • Turkey tops organic cotton league (UK) • New CRDC Chief wants to double water efficiency (Australia)
Or a fad? • ‘Green’ attitude Ø It exists and affects purchasing decisions • Wool’s advantage Ø Association with natural, renewal, biodegradable • Retailers want environmental & ethical messages Ø But, short-term use of organic promotion needs to be tempered with longer-term effort to ensure and ethical and sustainable focus is developed
Change is essential for progress….. �
Australian Wool Exchange For more information visit www.awex.com.au Australian Wool Exchange 318 Burns Bay Rd Lane Cove NSW 2066 02 9428 6100
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