Mohair Industry Hopes Recent
Price Upswing Is Long-Lived

By Colleen Schreiber

SAN ANGELO — The last several years have not been kind to mohair. Not since 1994 has the mohair industry had anything at all to talk about in terms of mohair prices. Most growers have three clips in storage, and warehouses are busting at the seams.

Perhaps the growers' luck is beginning to change. Over the last 30 days or so the industry has seen near record kid prices, next in line only to prices set back in the late 1980s. Growers, warehousemen and buyers alike are scrambling to take advantage of these prices. Most of what has sold to date has been kid and yearling hair with a sprinkling of fine adult.

Perhaps the best news comes from South Africa's most recent Cape sale, in which 98 percent of the offering sold and adult prices were 25 percent higher than in previous sales. Details are reported elsewhere in this issue.

It's hard to know for sure just how much hair has moved this year, but figures generally run in the four to five million pound range.

Fueling the market, experts say, are simply the dynamics of supply and demand. Supply has gotten smaller and demand has gotten better. Mohair is back in vogue.

Industry experts say the majority of the hair is being exported to Belgium, then most likely from there to France, South Africa, and the UK to be made into top, and then on to Italy to be made into fancy yarns.

The "brushed look" is in style among fashion designers, and superfine soft, good quality garments are in style as well.

No one seems to know for sure how much hair remains in inventory. Guesstimates run anywhere from 14 million to 20 million pounds worldwide. One thing warehousemen and buyers alike seem to agree on is that there is basically no inventory of kid hair, particularly fall kid, left in the world. One expert predicts there will be a little less than four million pounds of mohair produced this year and probably only 3.5 million the following year. Of that total, only about 200,000 pounds will be fall kid.

For those who have been following the market, the near record kid prices came as no surprise.

"It was basically forecasted," says Forte, Dupee, Sawyer Co. buyer Leroy Keese.

"Kid hair has been going up since last year. It walked right up pretty quickly from $3 to $6 last year, and this year is no exception."

Not surprisingly, the majority of the hair left in inventory is adult hair, which has always been the biggest kink in the system. And it's a big kink. But here again, those in the industry are more hopeful than they've been in a long while.

Ozona's Wool Growers Central Storage Co. manager, Donnie Laughlin, says most of South Africa's stockpile of adult hair has moved.

"Their currency is much weaker than the dollar," he explains. "It doesn't really sound like a good price, but in comparison to the dollar it isn't bad."

Some experts say it will take a $3 price for adult hair before growers will likely consider moving significant inventory, but "that's an unrealistic price on this world fiber market," one buyer says.

Laughlin says adult hair is still priced in the $1.04 to $1.11 range, and for the most part growers are still not willing to turn loose at that level. Like others, however, Laughlin says he is optimistic that as more of the finer adult begins to move, so will the lower grades of adult hair.

"We're seeing a trend which definitely indicates some optimism," says Jason Bannowsky, buyer for UK-based Alfa Tops Ltd. "Right now mohair is extremely popular, especially in Europe, and we've also seen some business in Japan and Korea, but it's tied strictly to the finer hair."

Bannowsky believes there is also genuine optimism that some adult will be traded as well.

"As the supply of kid hair gets smaller, spinners will likely have to start blending some of the coarser hair in with the fine hair."

Some in the industry say this is already beginning to happen but on a limited basis. The adult market, Bannowsky says, will have to be fed just like the kid market.

"Two years ago, kid hair was bringing from $3.50 to $5. Now it's bringing $6 to $7, but it's been a gradual increase. The same thing has to happen in the adult market; it has to build over time. I think it's unrealistic to think we will automatically jump to $2 or even $2.50 for adult."

Sonora Wool & Mohair Co. has sold almost three quarters of a million pounds FY 99 for an overall average price of $3.15 a pound, but very little of it was adult hair, says manager Seco Mayfield. He recently sold some fine adult matchings, hair close to a strong yearling grade that was in the 32 through 34 micron range, at anywhere from $2.65 to $4. Others report prices in the $2.50 to $3 range.

Some spring kid has sold in the $6 range and some yearling hair brought $4.50, Mayfield says. Some of his growers have also cashed in on the $7 market for fall kid. Elsewhere, yearling prices have ranged from $3.50 to $4.

"There’s a huge difference between the price of yearling hair and fine adult hair or adult hair. They're separate markets now days," Mayfield notes.

Though no one in the industry is unhappy with the high kid prices, growers, warehouseman and buyers all voiced some concern about how rapidly it's moved to these new levels.

Sonora rancher Joe David Ross says he's most excited that yearling hair is bringing good money and fine adult is moving as well.

"This seller's market is finally giving growers a little more cash flow," Ross remarks, "but honestly, one of my biggest concerns is that prices may have gone up too high too quick."

"I don't necessarily think its too high," warehouseman Mayfield adds, "but historically, whenever it goes up so fast it changes the dynamics with the top makers. Sometimes they can’t absorb that price increase, and when that happens prices go back down. We would like to see the price increase be more controlled so that we can sustain this up market."

Bannowsky agrees.

"It scares me. Don’t misunderstand me — I like these good prices, but there’s some worry that if it gets too high too quick the end user will quit using it, and that hurts everyone because we all get hung with inventory."

Another buyer added, "Sometimes when there's a short supply, people are just trying to cover their commitments and so the price is driven up. They generally lose their shirts doing it, and as soon as they get their commitments covered the prices go the other way."

Mayfield believes growers who have sorted their hair have had more of an opportunity to sell and take advantage of this market. The Sonora warehouse has been running a sorting operation year-round for the last several years. Right now they can't keep up with the volume, Mayfield says.

"We have more business than we can handle, and we're considering going to a second shift."

Because some fine adult hair is moving, some growers are sorting some of their original bag mohair. Just how much fine adult can be sorted off depends on the goat and also on the grower, Mayfield says.

"Some growers might have 70 percent fine hair in their overall clip. Others are just the opposite."

Genetics, overall age of the herd, range conditions and the like all have an impact on the ability of a goat to produce fine hair. In addition, if goats are run on improved pastures or fields they tend to have coarser hair.

For some it might not pay to sort, Mayfield says, but there are times, too, that the economics of it don't work for anyone. Sorting at their warehouse, Mayfield says, runs about 10 cents a pound depending on the volume of the lot.

"A lot of people have had a philosophical difference about sorting for years," he remarks, "but now reality should be slapping them in the face."

Bannowsky believes growers would benefit if they spent just a little time "shaping up" their clip, for example pulling the coarse neck and some of the edges.

"People can get too carried away with sorting," Bannowsky adds. "We re-sort almost all of the hair we buy because we put together certain types, and if the clip has really been torn apart it makes it harder for us to re-sort."

Comfort goat producer Robin Giles is one who believes wholeheartedly in preparing his clip and breeding fine-haired goats. Now he says a lifetime of work following those guidelines is finally beginning to pay off.

"It’s real encouraging, because for once we’re getting paid for our quality hair," Giles says.

Until recently, Giles, like many mohair producers, had three clips in storage. Now it's mostly gone.

"This has been the biggest year we've had in our lives. I've sold more dollars worth of mohair in one year than I have in my whole life, and at some of the highest prices ever."

Giles' last clip of hair brought from $5.25 to $6.25, and that's not including his baby kid.

That said, Giles is probably not the typical producer in that he's basically bred out his "adult" hair. This year his billy herd sheared 66 percent kid and 33 percent yearling hair, and his nannies sheared over 70 percent kid and 30 percent yearling.

"There is a little adult in that yearling class, but not enough to keep it from being called yearling," Giles says.

"So many people choose their billies as yearlings and then stay with them. We don’t choose ours until they're four or five years old, and they still have to have mostly kid hair on them at that age," he explains. "We also cull all nannies that shear adult hair."

Raising kids is a difficult task, experts say, but most believe there is room for improvement. In general, across the state, kidding percentages average 40 to 50 percent.

"Sure, we can do a better job," Giles says. "We kid in the pasture but we do it in smaller pastures and in small bunches. Plus, we kid later than most," he notes.

"Everyone gets so anxious to get these big early kids. I don't necessarily think it's weather killing the kids, it's just that a lot of the nannies are carrying fetuses in the hard part of the winter and they just slip them. So either you feed them a bunch or you kid later, and it’s a lot easier for us just to kid later than it is to feed them, especially if we don’t know whether they’re going to make any money or not."

Joe David Ross kids in the pasture and manages to raise about an 85 percent kid crop. He feeds his nannies about a half a pound a day, but mostly, he says, it has to do with genetics.

"We've tried to make selections based on survival without intensive management. Angora goats get a bad rap because of some of the unthrifty goats. There are some goats, though, that have a lot of meat on them that do raise good kid crops. Some of their mohair may not be as good a quality, but to me the most important thing is their thriftiness. They don’t necessarily need to be the largest goats; medium size goats work."

The industry still has a long way to go before those up and down the chain can once again be profitable, but as one warehouseman points out, "at least we're pointing up."

"I don’t know if I would say growers are more optimistic," Laughlin remarks. "It's been such a tough deal for so many years that many of them are kind of just numb about the whole deal.

"One thing that would help us is if the goat market would get higher," he adds. "It's better than it was, but no one is really ready to pay a lot of money for a goat yet."

Overall, Mayfield says he's optimistic about the future.

"We still have a huge backlog, but for the first time in a long while we're keeping up with the in-flow and we intend to sell a lot more hair in the next week or two."

"We're anxious to get checks in growers’ hands so there will be more optimism," Mayfield continues. "We still hear growers talking about the sorry state of the mohair market, and that’s just not the case. We can’t really sell any adult hair yet, but we’re selling fine hair to the point that this will work, at least in the near term."

Mayfield says he doesn't really believe fall kid hair prices will go down, but like others, he can't predict the future, particularly for mohair.

"It might go down, but who really knows? Since there are so few kids around, kid prices might actually hold."

"I hope we can get back to a level where people can continue to make their goat operations profitable," Bannowsky adds. "These high kid and yearling prices are great, but it's going to take being able to move some adult hair before an operation will work. When the adult hair is not moving, it hurts everyone from the growers all the way up the chain. Volume is what keeps us in business, and there's just not that much volume in kid hair.

"We all hope we're in for a long run of good business," he concludes.

Keese believes the future of the mohair and wool industries lies in micron measurements.

"The finer the hair or wool, the more you're going to see in money," Keese insists. "If adult prices come back, mohair will hold its own and maybe increase a little."

Extension sheep and goat specialist Dr. Frank Craddock is cautious about the recent upswing in the market.

"I think it's good to be positive," he remarks, "but we also need to be realistic. Can we really afford to go five years without any profit to have one good year?"

Mohair Council of America executive director Zane Willard acknowledges that the industry is changing.

"In the heart of sheep and goat country we have increased predator problems, poor fencing, urban sprawl with the development of ranchettes, so there’s a certain amount of the business that will never come back," Willard notes.

"We have to continue to work on product development. We can’t just depend on that one look in fashion," he insists. "We have to continue to find other users of our product, other applications, new customers. We have to keep in touch with old friends but we have to make new friends.

"We don’t need a lot of products," he continues, "two or three what I call stable products that we can be in the marketplace with every year is all we need.

The council is hoping the new mohair carpet will be one such product. Another is MCA's Dove Creek collection, a new line of casual clothing made with mohair and wool blends.

The council hopes to have samples of the first three styles of carpet in stores by the first of November and the remaining three by mid-November.

"We've had so much interest that we're somewhat worried we won’t have enough inventory made up," Willard says.

"Experts say 20 percent of the products constitute 80 percent of the sales. We hope that a trend of bestsellers will develop so that we'll have a better idea of what to make more of."

Recently, MCA was able to secure a thousand-piece order for their Dove Creek casual overcoat. The product is going to Macey stores.

"They booked the maximum order for new vendors. We hope this is just the beginning."

Grower Joe David Ross agrees with Willard in that he believes the only way for the industry to survive is by working together and adding value to the end product.

Ross says he's running more Angora does than ever before.

"I think a lot of people are taking a second look at their Angora goats," Ross says. "Shearers have reported that some producers are going back with Angora bucks rather than Boer bucks or some other meat goat buck."

Ross says he believes the Boer goat industry has benefited the goat industry in general because they've helped increase the awareness of goats and their potential benefits.

"We're encouraging growers to sell their hair," Willard concludes. "No one knows what the market will do. It might go up, but it will come down.