Product-process groups and wool price

The key blending parameters can currently define fifteen main wool product-process groups for New Zealand wools. Greater price differentials for changes in parameters are available in the high value products, e.g. worsted woven apparel fabric, so demand affects the price of wool types differently. Breeding management and marketing decisions may cause wools on the threshold of parameter values to shift between product-process groups with resulting different price-parameter premiums. Innovations in processing and product development can result in the formation of new groups and changes in the boundaries of the groups. This paper discusses the sources and quality of wool price information available to growers in New Zealand and highlights the need to relate this information to different product-process groups. In sheep breeding the optimum selection direction for economic improvement is usually based on current prices. The effects of a breeding programme take some years to spread through a Rock and in the meantime there are likely to be changes in processing and product development. Forecasting wool prices, to construct a selection index requires prediction of these changes.