THE market signals for un-mulesed wool are tipped not to come via better prices, but through retailer decisions about where the big manufacturers buy their wool from Australia, New Zealand or South Africa.
This was one of the messages from the owner of DP Woodrow and Company, Denine Woodrow, who was a speaker at the recent 'Why Merino?' conference at Dubbo.
Her company, based at Charlotte, North Carolina, US, oversees business and strategic planning and has two main wool broking and processing clients, E-wool from Australia, as well as Suedwolle, a German-owned company operating in China.
Ms Woodrow said that in the US wool was still seen as a seasonal fibre, with a strong mindset of it being solely a winter fabric, as well as being in the price range of the mid-tier to high-end income earners.
And it was still missing the younger generations, who had been bought up with synthetics, partly because that was what they could afford, she said.
"I think that's a challenge retailers are looking at," she said.
"How do you bring along that next group of people who are buying wool?"
She said the US had seen growth in the circular knit products which were suitable for close to skin or base layer clothing and retailers could also tell a "performance story" about these products.
This had converted to good growth in sports and outdoor wear, while the traditional avenues for wool, such as sweaters, had remained steady and areas such as suits had fallen away with the global financial crisis.
But the biggest influence in sales of woollen products came down to consumer confidence.
"When it's hard to put food on the table, then they make different choices about where they're buying," she said.
Ms Woodrow said the economy, along with the issue of mulesing, were still the two big issues for wool at the retail level.
"The US retailers are certainly going to want certification and guarantees of non-mulesed wool," she said.
But unlike other feedback on the issue, she said this was not driven so much by consumers, but the retailers themselves.
She said the retailers didn't want the consumers to become educated on the issue of mulesing as this could be negative for them too.
Retailers were aiming to target non-mulesed wool as part of their "welfare friendly" image, but as a pre-emptive move to provide consumers with the welfare credentials they expected before they even learned about it.
With the limited supply of unmulesed wool, it had also become apparent the transition would happen over time, "but is something industry needs to pay attention to".
"And we all want the Australian wool industry to be successful," she said.
In the meantime, there would continue to be switching between Australian, New Zealand and South African wool as the mulesing-conscious buyers moved between whichever suppliers could provide them with what they wanted at the cheapest price.
However, she said with the sheer volume Australia produced, retailers were keen for Australia to come on board in a bigger way, as US retailers had a history of good experience with Australian wool and wanted that relationship to continue.
"I don't know if there'll ever be price signal, but there will be a demand signal - obviously the goal of the retailers is not to pay more," she said.
Therefore, she tipped the signal to be retailer driven, guided to some extent by the repeat buying activity of consumers, with the aim of putting forward a genuine welfare-friendly product.
Email a friend