Sunday, December 07, 2008

Wool Commodity Pricing and Your Local Shepherd

Alpaca at $4 per lb. and wool at 17 cents a lb (August's wool market price) is the harsh reality in today's global economy. The cost of a commodity has no bearing on the cost of creating that commodity, but instead is driven by speculation on a stock/commodity exchange far removed from the people whose lives are impacted by the commodity.

International wool pricing (commodity pricing) does not reflect the actual value of wool (or alpaca, mohair etc.) nor the costs of production. In the US, wool used to be subsidized, so that the farmer was guaranteed a base price even if the world market price was down substantially. I'm not sure if this is still the case. The UN is trying to do away with all farming subsidies for every commodity. In Canada there is no subsidy for livestock farming.

The reality is that wool is not just a side product of sheep or alpaca raising. If we want to be able to get quality wool or alpaca or mohair from animals that have been selected for fleece quality, and cared for in a way that keeps the fleece as clean as possible, then their fiber is the main product.

When wool (alpaca, mohair etc.) is sold below the cost of production -- the farming operation becomes nonprofitable and farmer's get out of farming -- something we are seeing in North America at an alarming rate.

Alpaca at $4 a lb. is about $20 a year income from one animal. That alpaca is eating a bale of hay a week. Here that bale costs $6 -- other places only $4. There is no market in N. America for alpaca meat, although it is common food in S. America and in New Zealand alpacas grace the table in high end restaurants. The same animal consumes a lb. of grain a day -- 20 cents a lb. if you buy wholesale in 1 ton lots. Cost to raise the alpaca --$281 to $385 per year -- against value of fleece on commodity markets $20. Value of offspring from animal -- $70 at last week's auction sale, often you can't give the animals away. In my area most alpaca fiber direct from the farm is going at $20 to $30 per lb. Still not reflective of the cost of raising the animal and having it sheared. Shearing costs range from $20 to $50 per animal depending on the size of the herd.

The wool co-op in Canada was paying 17 to 23 cents a lb. last Fall for domestic wool. The average skirted fleece is 7 lbs. for wool breeds and 5 lbs. for meat breeds. (Commodity value of skirted fleece: $1.15 to $1.61 / Cost of shearing $5 average per animal, cost of wool bag to ship 10 to 15 fleeces $8) A wool breed generally needs twice as long to develop a carcass ready for the butcher -- and 6 sheep will consume a bale of hay in a week (2 ewes plus their 4 lambs)($72 per adult ewe and offspring, assuming no hay needs in summer pasture season) Cost of wholesale grain is 20 cents a lb. and each animal consumes 1 lb. a day. ($73 per adult and $75 per two lambs)The price of lamb to the producer is anywhere from $15 per animal to $100 depending on if the producer can sell direct to the consumer (now illegal in some provinces, like BC). The math: Cost to raise 2 market lambs and take their mother through the winter $220 plus $15 shearing -- $235 against value of the fleece and meat $202 -- loss to shepherd $33 per animal. In Canada there is an additional check off charge per sheep and lamb and a tag charge adding an extra $3 per head to the cost of raising lambs. Bring the loss to $36 per animal.

These figures do not take into account the farmer's time to feed, water, attend births etc. Nor do they allow any value for housing, fencing, vet bills, or predator control with dogs or llamas.

One could conclude that fleece or even lamb farming in North America is unprofitable and not in the best interests of farmers. Many have come to that conclusion and sold out their land to multinational interests. This is not in the best interests of the environment or the well being of the citizens of the country. Or one could reason that by asking just a bit more than international commodity prices one could steward the land and keep the environment for future generations.

Every one of us is free to choose to buy commodity priced wool at the world price this week and accept the quality in 1000 lb. bale. And in fact, if you consume 1,000 lbs. of raw wool each year, you definitely should buy it this way, without feeling guilty.

An alternative is to support the local farmer who is attempting to raise quality fleece in an environmentally sound way. But please don't expect any farmer to sell to you at commodity prices -- basically subsidizing your business to the detriment of his own.

Of course, the solution to this inequity to the fiber farmer is for the shepherd to refuse to sell their specially selected fleece as a raw product, but to instead value add and sell a finished product direct to the consumer. This is what we at Joybilee Farm are attempting to do.

As a fiberartist I am frequently offered free fleece -- both alpaca, llama and wool. I mostly turn it down because I have so much of my own. Those of you looking for large quantities of raw fleece might befriend your local fiber farmers. Many would rather give their wool away in friendship or barter than accept the insult that wool marketing boards and co-ops offer them.

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