Wool market heats up, but sustainability questions remain

Saturday, 7 March 2026

Blue Duck Station owner Dan Steele says high wool prices could be temporary and isn’t planning to increase sheep numbers.

The farmer who was dumping wool three years ago is now earning three times as much off the sheep’s back but reckons New Zealand has a long way to go before wool becomes sustainable.

For years, wool has been growing increasingly worthless for New Zealand farmers with low prices failing to even cover the costs of shearing. Three years ago, the market was so bad that Blue Duck Station owner Dan Steele was giving his wool away and mulching it.

These days Steele is getting three times as much for his wool, but says the recent price increases aren’t the result of New Zealand efforts, and until it is, he doesn’t believe wool will be a sustainable product.

Steele believes New Zealand needs a solid business plan to add value to its natural products.

“Wool’s on a bit of an upwards curve at the moment, which is good, but it’s still not covering costs really … Two or three years ago I was getting $1/kg and now I’m selling it for around $3.50/kg, which is covering the shearers, but you’re probably not covering the other expenses like dagging and dipping.”

For Steele, whose sheep produce lower quality wool as it is, it’s simply not viable to increase his sheep numbers, especially as he is hesitant to believe the boom is going to last. Instead, his focus remains on increasing his beef numbers and growing the tourism side of the business.

“It’s a good start [but] the worry is that this increase is probably not being driven by brand New Zealand or anything smart that we are doing at this stage. It’s mostly because there is a shortage of fibre and China’s jumped right into the market and they’re pushing quite hard.

“The hope is that natural products are going to come back in favour as we work out the problems with nanoplastics and synthetic materials. It’s all good in theory, but I don’t think those structural changes have happened yet.”

Steele believed that New Zealand had failed to add value to it’s natural products or come up with a solid business plan to market them.

Steele’s latest addition to the tourism hub on the farm is the Tongariro Suite filled with wool products.

“We’re not adding enough value to New Zealand products and that’s a real shame and puts us in the position of selling the raw material in its cheapest commodity form.

“We’re under-capitalised because the country’s never actually had a business plan long term to build value into what we do and sell. There’s a lot of special stuff here, let’s look after it and let’s value our natural capital.”

Steele reckons there are around eight different kinds of wool in the suite.

In aid of that, Steele opened the Tongariro Suite in September to showcase New Zealand wool products.

“I’ve put Bremworth carpet in there, flock panelling, I’ve got Ruanui blankets on the bed and sustainable gardens also with wool mulch. I’ve got six or eight different types of wool in there.

PGG Wrightson wool general manager Rachel Shearer is cautiously optimistic prices will continue to hold strong (file photo).

“Wool is a good story, but it just needs value adding to it … People are getting back to wool apparel and wool blankets and carpets. It’s all good stuff, so we need to breathe life into those companies and support the hell out of them.”

The premium cabin provides accommodation for The Chef’s Table restaurant on the station, which is a hotspot for New Zealand and international customers. The goal is to highlight the natural value of wool and encourage people to switch to using it.

Diversity is a big part of Steele’s success at Blue Duck Station and he makes good use of the station’s location on the banks of the Whanganui and Retaruke rivers.

Among other things on the 2800ha farm, Steele does conservation work, horse trekking, jet boating, kayaking, tours, accommodation and owns a restaurant on top of farming sheep, beef and some red deer.

PGG Wrightson wool general manager Rachel Shearer was cautiously optimistic about the market and estimated that there has been a 30% increase in wool prices over the last year.

“In the last six months of the last calendar year the market showed significant improvement across the strong wool prices and that held. We opened in January with probably the hottest market we’ve seen for the last ten years.

“It’s a classic supply and demand story. World sheep, or shearable sheep, numbers are at an all time low and counter to that is the fact that the world is waking up to the wondrous nature of this fully sustainable fibre. In particular, there is a lot of demand coming from China for natural products.”

Shearer thought that the global demand for natural fibres for products like carpets, upholstery and bedding was growing. She was “cautiously optimistic” that those kinds of products could lead to a sustainable hold in prices.

The last PGG Wrightson wool report for the North Island showed a 20c increase in the strong wool indicator (SWI) with good style crossbred fleece selling for an average of $5.56/kg. Although the market does show signs of slowing with the South Island report on February 26 showing a 7c drop in the SWI and prices for good style crossbred fleece at $5.69/kg.