Farmers blame auction system for low wool price

A sheep farmers' representative sees little hope of lifting wool prices while the auction system continues as the main way of selling NZ's wool. Wool prices are still sliding as the world recession hits demand, especially for wool carpets reports Radio NZ . At the start of the new selling season, the indicator price for strong wool has fallen $1 a kilogram below what it was a year ago. Fine and mid-micron wool, prices have also dropped, though not so steeply. Federated Farmers says poor wool returns are the weak link in its campaign to get the price for an average lamb up to $150-a-head in five years. The vice-chair of the organisation's meat and fibre section, Canterbury farmer Jeanette Maxwell, says one of the main obstacles to lifting wool returns is the way it is sold. She says the structure of auction system means not all those interested in bidding turn up on the same day so they don't outbid each other, and deals that take place beforehand also contribute to lowering the price. Wool Exporters Council president John Henderson shares farmers' dissatisfaction with the rock bottom wool prices but says they can't blame the auction system. He says the global recession is the cause of the low wool price as many manufacturers are going out of business. Mr Henderson says exporters are trying to increase the value of wool with initiatives that include their own promotional efforts, but he is not expecting to see any significant price lift for cross-bred wool in the next six months.