Farmer-owned promotion and marketing company Wools of New Zealand says getting stability back into prices remains the big challenge for the industry.
Chairperson and Banks Peninsula farmer Mark Shadbolt says despite the current rise in auction prices, cross-bred wool growers have had only two years of profitable returns over the past decade, continuing a 30-year downward cycle.
Mr Shadbolt says an analysis of strong wool prices highlights just how volatile they have been.
"We saw a rapid rise and a rapid fall back in 2010 and 2011. We've seen an equally rapid rise, and they are saying that it's due to lack of supply over the last few months, and we're back to sort of record-breaking numbers in comparative terms.
"But if you look at it over 10 years, only in two of those 10 years has the price to grow has been above what we call a cost of production which is $4.50 in our view.
"So what we've got to do is put in place a stable price model where, when we get to these rises, that we can manage them with our customers and continue to grow them incrementally so that we can keep our growers in business and also keep our customers in business which is equally important."
Mr Shadbolt says as part of that push for more stability, Wools of New Zealand is running direct contracts with overseas customers, including a lambs wool supply contract with UK-based fabric weaver Camira now in its second year.
