Eastern Montana Consolidated Wool Pools
Under the current wool pool marketing system, selling wool has become inefficient at meeting the needs of a changing world market environment. There are a number of factors contributing to decrease in competitiveness of Montana wool. In the past few years there has been a decrease in the wool processing capacity in the U.S., as well as a strong U.S. dollar, making the demand for Montana wool weak and intermittent. Also, there has been a decline in the number of wool producers, thus the size of the wool offerings has decreased proportionally. Current wool pools no longer meet the goal for their members of improving the marketing opportunity through economy of scale marketing.
This project was initiated as a cooperative project between Montana State University, Montana Woolgrowers Association and the local sheep producers and wool pools in northeastern Montana. Two local county extension agents (Mike Schuldt, Blaine County and Marco Manoukian, Phillips County) provided leadership in the organization of this project.
The overall objective of this project is to combine a number of small pools over a large geographical area. This project has four main goals: 1) Improve grower knowledge of wool quality and on farm processing, 2) Increase total volume of wool for sale for all pools, 3) Separate wool into individual lines based on quality, and 4) Increase returns for individual producers. This is a coordinated effort between pools to consolidate smaller volumes of wool at one location to facilitate testing and marketing. It is similar to the concept of regional marketing centers being discussed by American Wool Council (AWC), but on a smaller scale.
The Eastern Montana Consolidated Wool Pool Marketing project consisted of eight Eastern Montana pools, including Hi Line (Rudyard to Glasgow), Plentywood, Lower Yellowstone (Sidney), Glendive, Wibaux-Beach, Circle, Pondera and Fairfield. Combined, the pools deliver about 225,000 lbs of wool from over 150 producers. Collectively, this represents 6 to 7% of the annual wool marketed in Montana. One third of the participating growers delivered less than 500 pounds of wool. In addition, about 1/3 of the growers marketed wool in more than one fleece line of wool.
The main interest of this project was to increase returns for individual producers. The total cost for implementation of the program is about 7 cents per pound. These costs are probably not different or in many instances less than they would have normally incurred by delivering wool individually to a centralized market or warehouse. In most cases, the nearest available wool market was about 200 miles (one way) away. Costs associated for wool growers delivering wool to a distant market are often not documented but in reality, can be fairly significant especially when you consider today’s fuel prices. Probably the largest beneficiary to this project is the growers producing the higher quality wool. These producers received a substantial amount (estimated at 20 to 25 cents per pound) more than the 7-cent cost associated with the consolidation effort. Producers producing marginal quality wools benefited only slightly from these efforts. However, during the three years of the project, we have seen a marked improvement in the wool being delivered.
Similar efforts to consolidate several wool pools into more sizable lots has occurred in the central part of the state by the Upper Musselshell, Sweetgrass and Stillwater wool pools. By consolidation, adequate wool quantities can be accumulated to separate wools of differing qualities into separate marketing lots. This allows the producers with the higher quality wool to receive fair market price for their product rather than an average price based on the average quality of the entire pool. These more specific lots of wool usually result in increased buyer participation.