Country Life: Wool for sale - inside a Kells Wool auction

In a wood-panelled room at the Hawke's Bay Club, wool is going under the hammer.

Country Life is a fly on the wall at a Kells Wool sale and talks to founder Richard Kells who traces his experience of the wool industry from the era of skinny sheep in the 1980s to the reviving industry of the present day.

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Richard Kells, Kells Wool: I started collecting leftovers back in November 1983, rolling up at a farmer's wool shed and picking up everything that's left lying around the place. I got the opportunity to start my own business in trading wool, so lurched into it. I've found it very rewarding and I've just stuck with it. In 1984, the subsidies were immediately removed. That caused, you know, a lot of stress for a lot of people and a lot of them had to exit the industry or exit farming. What it did to a lot of small communities out there, it pretty well gutted them. Farmers have probably got better. I think we're growing more productive animals. The wool clip actually improved because under Muldoon's skinny sheep scheme, sheep were not getting enough nutrition to grow a crop of fleece in those days, to be quite honest.

Kim Alquist, auctioneer: I'm checking to see that the wools that we've typed are true to record, and it's my clients, so I want to make sure that they've prepared it properly. And if they haven't, we can go back to them and talk to them and say, hey, we haven't quite done the job right. Hey, look at that there, look at that. The bits and pieces of that should have come out. It's a really nice line of wool, except for those little bits that just need a little bit of work on it. It's cross-bred wool. It's Romney. Colour is the main thing, length, micron, which is your fibre diameter.

We're looking for vegetable matter that's been taken out. You hope you don't see it, I should say. Some of the farmers have got bad problems with biddy bids, thistles and things like that. They've got to come out. They've done a good job in that respect here.

Richard Kells: Back in the '80s, we were getting around $5 a kilo for quite a good period. I think that was when China was emerging, but the cost of shearing was only about $1 a sheep. Now we're back to getting $5 or maybe 6 today. But the shearing cost is $6 a head. If we were getting a wool price that was three to five times the cost of shearing, it'd be $18 to $30. $30 a kilo for wool would be about $150 a head. So it'd be getting closer to half the lamb income that a farmer can expect. A bit more equitable than the probably 10 percent we're looking at at the moment.

The population is less than half what it was. We're going further to get work. We used to be able to find a reasonable flock of sheep five minutes out of town. You've got to go an hour out of town now. It's an open cry auction, so they have to shout out the prices. And yeah, when it's running hot, it's a verbal boxing match.

Holly Tarrant, wool buyer, Curtis Wool Direct: It can get quite pushy in there. It can get quite bolshy. We buy wool locally and we sell and export it overseas as well as to local mills like Godfrey Hirst. You just have to follow your game plan that you've, you know, worked on leading up to the auction. If you can't buy the wool at the prices you want to buy the wool and you have to go higher, then that's just it. You just have to stand your ground. Don't let them push you around. Yeah, you kind of have to gain their respect.

Jess Williams, Kells Wool rep: I go out in the sheds at shearing time usually to make sure the preparation is all done correctly. Definitely an art to it and if you're not passionate about the job, then, you're more likely not to care about what you're doing, right? We've been through the tough of it and, a farmer reminded me the other day that it was not too long ago that I was calling out 89 cents for his main line, and I would not sell it under a dollar. To be able to call him and say that his wool was now worth, 536 cents. It was amazing. Yeah, the vibe is there and they're starting to care a lot more about what they're producing.

Richard Kells: It's really very carpet-driven at the moment. So it's obviously China and India, the main two, but Europe's in there reasonably strongly as well. So finally, the planets have aligned and everybody wants it at once. So there must be some underlying demand at the retail level that's feeding back. And you can probably put that down to people wanting the more natural product than a chemical-filled thing.

Ken Tunnicliff, Ascot Wools: I started when I was 18. I'm now 76, and just to let you know, the wool I bought today is for local mill consumption, not for export... the biggest carpet maker in New Zealand. I think this system works well, and it's tried and true. An awful lot of changes I've seen, you know, five times more wool, five times more buying firms, you know, a lot of different things. Markets have changed. When I was starting out, the Russians were very big buyers in New Zealand. The Chinese were as well. They are today the dominant force, unfortunately. Western Europe, UK were big clients in there. We sold thousands of tons of scoured wool into the UK and Western Europe. Now today, I don't know what the figures are, but they're not significant in relation to that.

Richard Kells: Some people say there's a lot of work in sheep, I'd prefer to say there's a lot of employment in sheep. The sustainable fibre needs a sustainable price. It's got to be getting $10 clean to put it in the same level as all of the other proteins that farmers can produce, milk, meat. Being a protein fibre, that's what makes wool so wonderful. It might take a little bit of time to get there, but yeah, I think we can expect years of good prices ahead of us after surviving this decade of depression."