Wool prices finally rise as the all-natural fibre finds its fashionable moment
Sunday, 8 February 2026
Emma Crutchley is a third generation farmer near Ranfurly in Central Otago, producing a good strong wool clip from about 6500 sheep that breaks even each year.
The strong wool sector is enjoying a sugar hit of high demand, muted supply and near-record prices right now, but Crutchley is cautiously optimistic about the future value of wool, even after the current euphoria recedes.
“We need to be honest with ourselves that current high prices are driven by a global shortage in shearable sheep so that drives up demand,” she tells the Sunday Star-Times.
Despite that, “what I see is a real opportunity, because we've got a good product that could fit into a lot of these international brands, that could create value beyond a commodity swing.
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“There's growing awareness worldwide of the impact of synthetic as well, and that's an opportunity to be grabbed.”
It’s an opportunity wool farmers need little encouragement to grab. After decades of losing money from wool as synthetic materials surged in use, a growing backlash against them has opened an opportunity for wool to make a comeback for its unique and environmentally-friendly qualities, which some consumers are happy to pay a premium for.
Most importantly, wool farmers are finally beginning to earn a profit from their clip, rather than just treat the product as something that had to be dealt with on animal welfare grounds or as simply a byproduct of sheep farming.
“For the first time in a decade, the market is clearly signalling that strong wool has real value again,” said Andy Caughey, who heads Wool Impact, an organisation set up in 2022 to find opportunities for the sector and develop new markets and promote the benefits of wool.
The price of wool has gone through $5 per kilogram and beyond the break even point for growers, and Caughey believes $6 is attainable. In contrast, in 2021, wool prices fell to around $2 per kg.
At $5 per kilo, growers are put in a position where they can negotiate direct supply contracts with brands to secure their limited supply, similar to what merino wool suppliers have done for years, Caughey said.
“These are prices that can be sustainable for a long period of time and it's putting money back into the grower’s pocket.”
Importantly, “it adds a greater level of interdependence. The grower knows who they are producing wool for, and the brand knows where it's being sourced from, which provides traceability, transparency and creates a symbiotic relationship.”
A niche product, finding its niche
Wool Impact is funded by the five major meat companies, wool scourer Wool Works and the Ministry of Primary Industries, to find market opportunities for strong wool, or wool used in carpets, insulation, upholstery and bedding.
The sector produces more than 100,000 tonnes of strong wool and Wool Impact envisages growth in the wool clip from 15,000 tonnes to around 40,000 tonnes over the next five years. The country exports 85% of the wool clip.
A report by the organisation looked at the fruits of investing in market development and fostering relationships with more than 30 New Zealand companies to bring products to market and build export opportunities.
One involves the world’s biggest design and architecture firm Gensler, based in San Francisco, a company that is also one of the leading architectural and design influencers. Gensler considers wool to be a solution for reducing the amount of carbon that goes into commercial office fitouts to net carbon zero by 2030, Caughey said.
That said, New Zealand is not alone in the race, competing with Australia, South Africa and the UK. But “we are the largest and we are the most influential because of the volume, the size and scale of our operation here, and the fact that we have the best quality”, Caughey said.
China buys about 35% of New Zealand’s strong wool, which it turns into a wide range of products for European customers and increasingly for its domestic market.
India is the next biggest market and already a significant buyer, with aspirations to displace China, he says.
Wool is now being used in a much broader array of products than was ever the case in the past, including commercial interiors, acoustic panels, filtration systems for air and water, furniture, bedding and personal care products.
Wool makes up less than 1% of the fibre used in textiles, making it a niche product and the industry will need to behave like a niche, Caughey says.
“New Zealand’s strong wool is highly desirable around the world because of our growing conditions and our approach to breed selection and genetics and how we manage our sheep.”
The sector must “romance the story around how we grow and produce the wool”.
“Look at the wool producing farms that we have in New Zealand, they're spectacular. Green grass, running water, blue sky, mountains. My gosh, what a good place to be a sheep, and what a good place to produce beautiful fibre.”
Crutchley agrees that it is a great place to make the kind of wool the world is now wanting again.
“There has been a lot of talk around the industry, but I also feel like this is going to be a marathon, not a sprint,” she said.
“It's looking positive, but we're climbing out of a big hole, and that's going to take time.”