Sheep industry to seek wool support

Ulster Wool chairman Brendan Kelly commented: “Most of the wool produced in Northern Ireland is destined for carpet production.

“Woollen carpets are amongst the world’s most hard wearing and enduring floor coverings. As a result, they are in strong demand within the hotel sector, on cruise liners, in casinos and restaurants, basically any location dealing with a large footfall of people on a regular basis.

“Unfortunately, these are the very same sectors that have been hardest hit by the Covid pandemic. Hotels have stopped all new build and refurbishment projects. The same can be said for casinos and cruise line operators.”

He added:“As a result, the market for wool crashed in the wake of the first lockdown introduced last March.

“We responded by halting all auctions between February and June last year.

“By the time they re-commenced an 11m kilos stock pile of wool had built up in stores around the UK, including here in Northern Ireland.

“Most of this wool has now been sold but at prices that were 50% below where the market was at the beginning of 2020.

“And, of course, there was also the challenge of dealing with new season wool coming into depots as the summer and autumn of last year progressed. The current stock pile of wool has been reduced to 4m tonnes. But this is still a heck of a lot of product that is overhanging the market.”

Kelly went on to explain that Ulster Wool’s costs per kg to process the wool had increased due to a lower wool intake. Meanwhile, average wool prices have fallen sharply.  The average price achieved for Ulster Wool at auction has been 46p/kg through for the 2020 season – this compares to 92p/kg pre Covid.

He continued: “We have continued to accept and grade every consignment of wool delivered to Muckamore. And we want producers to keep on sending their wool to Ulster Wool.

“But the market crash of 2020, due to the Covid-19 pandemic, has had a major impact on the Ulster Wool operation.

“First off, the business has incurred a loss on every kilo of wool it has handled over the past 12 months.

“This will have a direct impact on producers’ wool cheques for their 2020 wool. This is not a sustainable position to be in, from both an Ulster Wool perspective and its individual farmer-shareholders.”

The Ulster Wool chairman recognises that the Stormont Executive did compensate sheep producers who sold fat lambs at the heart of the Covid crisis.

He commented: “And rightly so! But nothing has been done to support wool and primary sheep producers.

“I strongly believe there is an even stronger issue of principle coming into play here. Government must support the co-ordinated marketing of wool. Otherwise, the industry as we know it will disappear off the map.

“Ulster Wool must be supported to the extent that it can cover its losses for 2020 while also being allowed to make some form of payment commitment to sheep farmers for the wool they supplied in 2020.

“And, given current market conditions the same level of commitment will be required for 2021.”

Kelly feels strongly that the Stormont Executive must act decisively to instil confidence amongst sheep producers in the work carried out by Ulster Wool.

“We estimate the shortfall for 2020 to be in the region of £721,000 with a similar amount required for 2021 if producers are going to be able to cover their shearing costs.

“In relative terms, this is a very small price to pay, given the traditional importance of wool to agriculture in Northern Ireland.”