Price Affects Wool Use In U.S.

Press, Volume CIII, Issue 30442, 16 May 1964, Page 8

Price Affects Wool Use In U.S.

Both tufted carpet manufacturers and manufacturers who use the traditional systems of carpet making in the United States were using less wool because of the recent higher prices for the raw product, Mr G. N. Francis, of Christchurch, who is brokers’ representative on the New Zealand Wool Commission, said this week.

With the manager-secretary of the commission, Mr J, G. McDonald, and the commission’s chief appraiser, Mr G. G. Anderson, Mr Francis was a member of a delegation from the commission which recently visited Britain and the United States.

The members of the delegation visited among other centres in the United States the Dalton area in Northern Georgia which is the centre of the rapidly-growing newtufted system of carpet manufacture. In simple terms Mr Francis said that tufted carpets could be described as being made on the sewing machine principle in contrast to the traditional weaving principle.

As an indication of the growth of the tufted carpet industry, Mr Francis said that between 1951 and 1962 tufted carpet manufacture had increased from 6m to 176.3 m square yards, whereas traditional woven carpet manufacture had in the same time declined from 58.7 m square yards to 49.2 m. The tufted method was a cheaper manufacturing process and also very much quicker. At one mill the delegation had been told that a machine set at five stitches to the inch and using filament nylon made a mile length of 13ft 6in wide carpet in one eight-hour shift. Because this was a new and rapidly-developing industry, manufacturers were not traditional wool users, said Mr Francis, and although they used woollen yarn if the price was right they were bigger users of nylon, cotton, rayon, and to a growing extent the new acrylics. Thus with New Zealand wools having sold at higher prices recently, the tufted trade had tended to go away from wool and indeed this season’s prices had to some extent also driven the traditional manufacturers away from wool. For this reason the delegation had found that the whole industry appeared very favourably disposed to the International Wool Secretariat’s promotion plans which would be implemented in the United States through the Wool Bureau. “It is obvious that there a fight on with synthetics for carpet manufacture, and strong promts tion for wool appears to be the only answer. It must be admitted, however, that the position at present is a little disturbing.” It was to be hoped, he said, that the promotion programme about to be initiated

would assist New Zealand to maintain the valuable United States outlet for the shorter types of wool which were so admirably suited for carpet making programmes. Traditionally, Mr Francis said, the carpet manufacturing centres in the United States were in the Boston and Philadelphia areas. After the war when the time had come for rebuilding some of the old-fashioned multistoreyed mills State taxation policies had played an important part in manufacturer’s plans with the cost of land also being high in the traditional areas. Some of the southern states had offered manufacturers exemption from state taxation for a considerable period in order to encourage establishment of new industries that would help absorb part of their surplus workers, and the result had been that several of the bigger manufacturers had moved to the south. The delegation visited three of these mills in Glasgow, Virginia, Rocky River, South Carolina, and Statesboro, Georgia. The new mills were magnificent singlestorey buildings in open country with modern machinery and very efficient. One of these covered 27 acres.

In spite of the impact of higher prices for raw wool, Mr Francis said, all mills had expressed a preference for New Zealand wools because of their relative freedom from vegetable fault, comparatively good colour, satisfactory length and good dye affinity. They Were also satisfied with the preparation of the New Zealand clip and with shipping deliveries which were now being made to ports in addition to the traditional points of entry of Boston, New York, and Philadelphia. In Britain, Mr Francis said, the delegation, had been much impressed with the goodwill existing for New Zealand, its sheepfarmers and its wools. The trade, in general, thought that New Zealand wools were well prepared, that the auction system worked very satisfactorily, that the delivery situation was usually good and as traditional users over many years of the New Zealand clip they were satis-

Bed with its present performance.

Of the Government-backed guaranteed price scheme for wool, Mr Francis said that the delegation had felt that having regard for the nature of British wools and the condition of the clip at the time it was delivered by growers, the scheme fitted the circumstances, appeared to work very well and was generally favourably regarded by growers. Last season, Mr Francis said, the British Government had guaranteed the clip at 53Jd per lb. From this was deducted about 5d per lb to cover overheads from point of shearing, including wool packs. transport, grading and administration and about Id for interest as the British Wool Marketing Board had to carry interest charges up to the end of the wool season because growers were paid out as soon as their wool was graded.

This meant that the net return to the farmer was based on an average of about 48|d per lb and this was broken down into Individual

maximum prices for about 330 grades of greasy wool and 220 grades of washed wool. The wool was sold by auctions spread over about a year with reserves at each auction being based on current market values and in general the market was met. At the end of the wool year if there was a deficit the deficiency was transferred to an interest-free debit account, and if there was a credit it was credited to the account.

The present scheme is due to run for 15 years up to 1965 when the account would be closed, whatever the position. Mr Francis said he understood that the position as disclosed in the British Wool Marketing Board’s accounts for 1962-63 was that there was a deficiency of film, and as a result of the profit derived from the sale of the 1963-64 clip this would be reduced to about £lom. For the 1964-65 clip the guaranteed price, which was subject to annual negotiation in February, had been raised by 2d per pound to 55{d. While in Britain, Mr Francis spent a week-end at Hagley Hall, Worcester, with the former Governor-General, Viscount Cobham.