Merino farmers are smiling
Fine wool prices are skyrocketing but merino farmer Mark Stevenson is happy to have his fleece tucked away in long contracts.
The mood in the merino pens was upbeat at the Canterbury A & P Show as it should be with fine wool prices on the rise at Australia and New Zealand auctions for fleece bound for the outdoor casual wear market. Any excitement was measured at the show though as farmer exhibitors have seen market cycles rise and fall in the past.
Stevenson, 37 and among the younger sheep exhibitors, is only an observer of the auction prices as his family have just signed up a 10-year contract with outdoor clothing company Icebreaker.
He said their contracted price was not too far behind the open market this season and would more than likely catch up on future market movements. ‘‘We will be a bit behind the eight ball this season, but this season is not about every season. We just have to look at these commodity cycles and we know they won’t last for ever so it’s about securing a price so we can run a sustainable business and forget about the economic market volatility.’’
Merino fleece from 18.5-19 microns is in short supply as demand has increased from the outdoors casual market in contrast to strong wool which continues to struggle at low levels.
The high auction prices and long term contracts were good for the fine wool sector, he said. ‘‘Everything is positive and a big part of that comes down to the relationships that have been built between farmers, customers and consumers in the merino industry.’’
Stevenson and his wife Jo farm in partnership with his parents, Ian and Trish, at The Gums in Cheviot. The merino stud was started by his great grandfather, James, in 1903 and the family also sells halfbred, quarterbred and dorset down rams on 920 hectares. As well as contracting merino fleece to Icebreaker they contract halfbred and quarterbred wool to US apparel company Smart Wool. Stevenson said they bred dual purpose sheep for producing meat and wool which were resilient against droughts and variable climates as well as variable markets. Their sheep had got through North Canterbury’s threeyear drought well. ‘‘As soon as it rained the sheep were away again and we had halfbreds weaning 140 per cent of lambs and an economic fleece netting $35 to $40 after we had paid for everything.’’