In the 1960s, New Zealand sheep farmers expanded wool production as the industry flourished. Years later, growing global demand for natural fibres and rising synthetic fabric costs produced an unexpected comeback, making wool profitable again after years of decline

New Zealand's wool industry, once a defining part of the country's agricultural economy, is showing signs of a revival after decades of falling prices and production. For farmers who watched the value of wool decline as synthetic fibres became more popular, the recent improvement in prices is offering a reason for cautious optimism. Rising costs for synthetic materials and renewed global interest in natural fibres are helping put New Zealand wool back in demand, as per a report by The Guardian.

For sheep farmer John Hargreaves, the change is already being felt. His family has farmed sheep and beef in Kaiwaka, north of Auckland, for generations. Their flock once stood at 3,000 ewes in the 1960s, but rising shearing costs and the declining value of wool gradually reduced the number to just over 1,700.

Now, after roughly six years, his wool is finally making money again.


“We’re now covering our shearing costs and making some sort of a profit,” Hargreaves says.

Why is New Zealand wool becoming valuable again?

New Zealand's sheep industry was once enormous. Sheep numbers reached more than 70 million during the 1980s, equivalent to about 22 sheep for every person in the country.

That changed as economic policies in the 1980s and falling global demand pushed wool prices down. The growing popularity of synthetic alternatives added further pressure. Farmers also began converting pasture into forestry and dairy operations that offered better returns.

Today, New Zealand has just over 23 million sheep, or about 4.5 sheep per person, according to StatsNZ.

But the global market is shifting again.

Dave Burridge, national wool auction manager for PGG Wrightson, says limited wool supplies and higher oil prices linked to the Middle East conflict are helping increase interest in natural fibres.

“The raw material used to produce nylon and polyester fibres, they’ve all gone up in price,” he says, pointing to growing interest from buyers in countries including China and India.

Are major brands returning to New Zealand wool?

International companies are also showing greater interest in the country's wool. French luxury brand Chanel signed an investment agreement in April with Central Otago's Lammermoor Station to part-own and support premium wool production. American outdoor clothing company Patagonia visited New Zealand in June to explore potential wool partnerships.

In May, Turkish carpet manufacturer Kalida Hali also reached a deal with Wools of New Zealand. The increased attention has coincided with stronger prices. At the PGG Wrightson national auction in June, New Zealand wool reached its highest prices in 15 years. Crossbred fleeces sold between NZ$6.47 and NZ$6.80 a kilogram, while the best-quality fleeces with good colour approached $8 a kilogram.

The market remains unpredictable, however. Prices fell at the latest national auction in Christchurch on July 30 after some buyers stepped back following earlier commitments.

“There was always quiet concern by wool industry players that the price had gone up very quickly, like unparalleled rises that we’d never seen before, and … that things were going to probably come off at some stage.”

Even after the latest decline, prices remain about $2 higher than a year earlier.

Burridge remains confident about wool's longer-term prospects.

“I feel really excited about the long-term prospects for wool, and convinced that wool will have its day in the sun again."

Can natural fibres give wool a lasting future?

Richard Dawkins, Federated Farmers' wool and meat manager, says stronger wool prices have lifted farmers' confidence, although the outlook remains cautious.

“That continued awareness globally of sustainability and the attributes of wool – that is a positive outlook,” he says.

India, New Zealand's second-largest wool market, is also showing increasing demand for high-quality New Zealand wool. A recent trade agreement between the two countries will remove tariffs on wool, which is expected to strengthen exports.

For Dawkins, however, the future of the industry is not only about convincing overseas buyers. He believes New Zealanders themselves need to reconnect with a product that once played a central role in the country's identity.



“This nation was built off the back of a sheep, built off wool … and that story’s been lost over the decades. It’s one thing asking the world to buy our product, but we need to embrace it ourselves as well.”

What does the future hold for New Zealand wool?

New Zealand’s wool industry is still facing a volatile market, but rising demand for natural fibres, stronger prices and growing interest from international brands are giving farmers reason to be hopeful. After decades of decline, wool is once again proving its value. For the industry to regain lasting stability, however, New Zealand may also need to rediscover its own connection with the fibre that helped shape the country’s agricultural history.

FAQs

Why is wool becoming popular again?
Rising synthetic fibre costs are boosting demand for natural wool.

Are wool prices higher now?
Yes. Prices remain above last year's levels despite recent volatility.