Wool was in the doldrums. Now buyers are fighting for it

Wednesday, 3 June 2026

PGG Wrightson Wool general manager Rachel Shearer says tight supply, natural fibre demand and uncertainty around synthetic fibres have created a “perfect storm” for strong wool prices.

Wool prices have hit a 15-year high, giving sheep farmers a rare lift after years when wool often struggled to cover the cost of shearing.

PGG Wrightson Wool general manager Rachel Shearer said the market had started to turn about 18 months ago, but the rise had accelerated sharply this year.

The best-prepared fleeces topped $7/kg last week, compared with about $5/kg in January and $4/kg a year earlier.

“It’s gone up pretty quick,” Shearer said.

Shearer said last week’s auction in Christchurch showed the effect of the new national auction centre, which was designed to put more buyers in front of the same wool.

Australian buyers had flown in from Melbourne, and when they were in the room, “the market tends to even heat up even more”, she said.

Shearer said the recovery was a “perfect storm” being driven by a mix of tight supply, renewed interest in natural fibres, and volatility in synthetic fibres, which are derived from oil.

New Zealand had fewer wool-producing sheep than at any time since before World War 1. Stats NZ figures show there were 23.3 million sheep in June 2025, down from 29.8 million 10 years earlier.

Federated Farmers meat and wool chair Richard Dawkins says higher wool prices are helping farmers after years when wool was often a cost rather than income.

Shearer said the same squeeze was being felt globally, with wool-producing sheep numbers also at historic lows.

Richard Dawkins, who farms sheep and beef with his family in Marlborough and chairs Federated Farmers’ national meat and wool industry group, said the turnaround over the past year had been rapid and badly needed.

“For three or four years there, the sector was really, really struggling,” he said.

“The key thing with sheep is we need them to be a dual purpose animal, meaning you have a meat income but then you also have the wool income.

“And when the wool is a net cost … it really hamstrings your business.”

Dawkins said wool was now covering costs for most farmers, but covering costs was still “a fairly low bar”.

PGG Wrightson Wool says strong wool prices have reached their highest level in records going back to 2011.

“It would be great for it to continue its exceptional rise and not only break even but generate a real profit.”

Shearer said manufacturers were also starting to look again at wool because of growing pressure to use natural materials.

Strong wool is used in carpets, rugs, furniture, acoustic panels and filters. Fine wool is more likely to be used in clothing worn close to the skin.

China and India remained major buyers of New Zealand wool, using it in textiles, apparel, carpets and rugs, she said.

But demand was also coming from Europe, with one major customer putting New Zealand wool carpets into cruise ships, where operators were trying to improve their sustainability credentials.

Buyers are competing for limited wool supply as manufacturers look again at natural fibres for carpets, rugs, furniture and textiles.

“For the last 30 years, synthetics have been seen as being very cheap and very reliable for the supply chain,” Shearer said. “They’re kind of neither cheap nor reliable at present. And so manufacturers are starting to contemplate wool again.”

Shearer said the price rise could slow the long decline in sheep numbers, but it was too early to say whether farmers would rebuild flocks.

“It’s been a very long road of decline,” she said.

Shearer said sheep numbers had been hit by forestry conversion, dairy conversion and farmers shifting land into beef.

“We’re hoping we’re at the bottom of that cycle.”

More wool is expected to come onto the market in the coming weeks as shearing picks up, which will test whether the stronger prices hold.

Dawkins said farmers would need to see higher prices last before farmers call it a lasting recovery.

“Just sustaining this value and even seeing further increases for another 12 months, two years, I think would give people a lot of hope,” he said.