Last Shepherd: Five Decades in the Wool Industry
New Zealand's wool industry has seen turbulent years and for more than 50 of them Roger Buchanan Has been intimately involved. He grew up on the family sheep farm before working for a wool merchant and a wool scour, studying then tutoring at Massey College, then setting out on a long career with successive wool industry statutory organisations. He was the Wool Board's final chief executive.
Last shepherd has been written from a front seat in the industry roller coaster. It is autobiography, industry history, analysis of the industry and its politics — plus many intriguing anecdotes. It includes frank analysis of the successes and failures of the statutory wool bodies. For much of his career the author worked in market development and was one of New Zealand's early 'China hands'. Wool was the stalking horse for New Zealand's trade push into China and Roger took a leading role in this.
This book includes highs, lows and fascinating incidents from his time in China, as well as Japan, USA, India, Nepal, Russia, Iran and the Middle East, as well as from the 'traditional' markets of Britain and Europe.
From: The Last Shepherd, by Roger Buchanan
The beginnings of retirement and the mellowing effect of advancing years are an opportunity to reflect on the pathway trodden through life. Finally there’s time to write about a journey down a wonderful avenue, memory lane – a unique personal pathway, shared at times but traversed in full by no others. A pathway lined at its peak by 70 million sheep and their seductive fibre.
My journey started as the son of a Manawatu farmer, Robert Buchanan, who was born in 1902. His father, David (‘DP’) Buchanan came to New Zealand in the 1880s and settled at Beaconsfield, north of Feilding. He made his mark by fathering many children, one being my father, and was prominent in the early Hereford cattle community. He did not come from farming stock, his father having been a lawyer in Rugby, Warwickshire and founder captain and the first president of the Warwickshire County Cricket Club.
My great grandfather David, used his marriage to Anna Wyndham Penruddocke as one of his spring-boards to financial success. Two generations later, this accorded my father a listing in the Plantagenet Roll of the Blood Royal, a complete table of all the descendants of King Edward III. Published in 1907, this traces my family through my father’s grandmother as far back as the 11th century. I am fortunate to own one of the 520 copies published. A review of this roll, together with Google and Wikipedia searches of my great grandmother’s most immediate English ancestors, the Penruddockes and the Wyndhams, reveals considerable dilution of my ancestors’ blue blood. The past generations were more aristocratic, accomplished and colourful than the present!
My father farmed at Aratika, 16 kilometres east of Feilding. Here I developed an interest in wool, an interest that became both a passion and a career. There is something infectious about this fabulous fibre. Fortunately it is non-debilitating as it is an infection that can be retained for life, that can hook you into a career you never seem to exit.
My time in the wool industry spanned periods in which it was New Zealand’s top export industry, when it had the status the dairy industry and Fonterra has today. It also included periods of despair as the industry became afflicted with internal bickering, confronted as it was with the effects of change: geopolitical change, global economic and at times unrecognised industry changes, changes in lifestyle and consumer expectations, and the unavoidable effect of these changes on peoples’ needs, their purchasing behaviour and ultimately upon wool prices. The sector’s inability to come to terms with the glaring realities of a changing world has been a weakness. Indeed, regression might better define the wool industry’s character.
I was directly involved with and learnt many lessons from the accumulation and disposal of major wool stockpiles. I had the good fortune to also be extensively involved in New Zealand’s efforts to seek out new markets for wool, especially in China, following Britain’s decision to lessen its southern hemisphere colonial linkages in favour of the European Union.
I was later to play a central role in dismantling the statutory structures that had served the wool industry and its stakeholders for more than half a century. A sad end to a lengthy career? I think not, as there was no doubting the need for reform but regrettably, the fruits of this reform are yet to materialise. More than a decade after the process began, only a few seeds have sprouted and shown promise. But given the industry’s slow-mover tradition, it’s too soon to despair. With a bit of luck and inspired leadership, revitalising initiatives will surely emerge now the overhang of statutory structures has been removed.
This book is drawn from a more expansive tome, The Boy from Aratika, which was written more for my family and includes extensive personal recollections of my childhood and family. Readers of Last Shepherd are not spared all memories from the family sheep farm, but this book is more about wool industry statutory bodies, their operations and the roller coaster they’ve been on since the early 1960s. Over that period I was shepherded to a front seat in the roller coaster and was the last person to alight when it finally came to a halt. I’ve attempted to lighten this record of events by lacing it with personal observations, together with relevant, irrelevant and irreverent anecdotes.
I’m sure I will be judged to have overlooked important events and milestones. For this I can do no more than apologise – as I also do if I’ve offended anyone with my take on events and the players in them. By no means is this a record of all that has occurred in the industry in my time; nor is it a comprehensive record of the operations or achievements of the organisations I’ve worked for. But I feel it would be remiss if I were to leave an industry that was so good to me for more than fifty years, without contributing some insight into the rise and decline of what had been New Zealand’s dominant pastoral industry. This I do now from the comfort of a retrospective armchair, where everything seems so much clearer than it did at the time.
I have appreciated the encouragement of many in the wool industry to commit this record to paper, as I have the support of family and friends who have wondered what I did during my many absences. Your anonymity does not diminish my appreciation for the parts you played in getting me over the line.
But not everyone escapes with anonymity. I would like to acknowledge those who have reviewed drafts or sections of this book for their helpful comments and suggestions, and to others for their contributions to its production and marketing: to my wife Jean, to Helen Algar, Emma Buchanan, Bill Carter, Shelley-Maree Cassidy, Peter Chik, Kai Tovgaard, Anne White and Jo Wills – a big ‘thank you’.
I must thank, in particular, Bruce Munro for his support and for encouraging me to create a record of some of the Wool Board’s operational activities beyond those recorded in the 2003 publication, WOOL – a history of New Zealand’s wool industry. These include significant events that led to the Board’s disestablishment and the challenges that emerged during that process.
A very big thank you is also due to my former colleague now publisher, John MacGibbon, without whose assistance this book would never have materialised.
LITTLE TO CROW ABOUT
FIFTY-TWO YEARS is a very long time in any industry, let alone one that has been afflicted with the highs and lows experienced by the New Zealand wool industry. Industry structures and the modus operandi of most participants changed radically through the period – at times for the good, at times not. The sheep population see-sawed dramatically – initially up, then a steady decline. The number of businesses servicing the industry steadily contracted – reducing the number of ‘middlemen’ for wool growers to get steamed up about – and wool prices trended progressively lower in real terms, with a few positive price blips occasionally bolstering morale.
Everything has changed, but in many respects nothing has. The industry is as divided as ever, with as many views as there are commentators on what might best serve the future interests of wool growers and their fellow wool industry stakeholders.
As I reflect on the time I have spent in the industry I can find no better place to start my story than at its conclusion, with a stocktake of where the industry stands in 2012. Such reflection confirms the industry has had little to crow about through the past two-plus decades.
For starters, sheep numbers are now less than half what they were at their peak in the early 1980s and they produce roughly half the volume of wool they did then. This change can’t all be attributed to the failings of wool, but the fibre’s diminishing fortunes have played a part.
The markets for New Zealand wool have changed dramatically, with China now taking around half of our exports. In the face of this strong trend, there is still a hankering in some quarters to focus promotion on markets of the past, rather than where the growth opportunities really lie. The cultural and language barriers presented by non-Anglo Saxon markets have proved high hurdles some choose to shy away from.
The Meat and Wool New Zealand-inspired Wool Industry Network proposed a ‘Model for Change – realising the potential of New Zealand strong wool’. This resulted in the formation of Wool Partners Co-operative Limited. Like those who had made similar pitches to wool growers, it failed in its attempt to secure grower support for a strong wool marketing business.
The Wool Board no longer exists, being a creature of an earlier life when farmers saw producer boards as their salvation. The Board’s once sizeable reserves have been dissipated or, in part, distributed to wool growers. Its disestablishment was an extraordinarily protracted process, stymied as it was by a series of court actions, with the process not concluded until 2012. But there have been no barriers since 2003 to the industry charting a bold new course.
A successor organisation, Meat and Wool New Zealand, no longer funds industry-good programmes for wool, having failed in its attempt to renew a wool levy under the Commodity Levies Act. Growers had voted in favour of a levy in 2004 but declined to renew it five years later. Meat and Wool has become Beef + Lamb. Now there is talk of reintroducing a wool levy. The chance of this occurring seem less than 50:50, with the odds on sustaining the current meat levy not a lot better.
In 1994 the initially very successful ‘Wools of New Zealand’ (Fernmark) branding strategy was introduced, and an extensive international infrastructure was developed to support it. Now it has shrivelled drastically and the little that remains has been preserved courtesy of a trust supported by a few committed wool growers and small commercial revenues. As there is a real risk that Wools of New Zealand and all that it represents may disappear altogether, it is to be hoped recently announced attempts at revival will succeed.
In stark contrast, The New Zealand Merino Company stands as a lonely pharos, signalling what can be achieved when a sector charts a united course with shared ideals and a preparedness to fund their pursuit. But proposals that this model can and therefore should be applied to other sectors need to be approached with some caution. High value, designer and life-style apparel is a vastly more receptive market to seductive strategies than are high cost but utilitarian floor coverings.
The Wool Research Organisation of New Zealand (Inc) (WRONZ) sits in semi-isolation, no longer undertaking wool research but with investments of $30 million. The earnings from these investments are committed to R&D projects through a research consortium, but too frequently the outputs only provide new opportunities in tiny market niches. There are encouraging signs of greater commercial commitment to R&D, through the consortium, which may help bridge this gap.
The well-intentioned initiative of Wool Partners Co-operative, supported by PGG Wrightson Limited, failed to achieve the wool grower support threshold it had demanded in its prospectus. Like an accomplished but over-confident weightlifter, it set entry-point weights at a level it was confident it could lift, but lost form when it mattered and was eliminated from the contest. A subsequent effort by Wool Equities Limited to solicit additional capital from its grower shareholders reputedly had significantly less support.
A diverse committee appointed by the Minister of Agriculture in October 2009, with the same ‘profitability’ brief as McKinsey, produced a report that re-hashed well-worked concepts and strategies.
New Zealand’s largest wool exporter, Wool Services International (WSI) – which was established by the former Wool Board – is on the block. Unfortunately for WSI, its principal shareholders are subsidiaries of the seriously discredited South Canterbury Finance Limited, which is in the hands of receivers. WSI’s activities are unlikely to disappear, but the uncertainty surrounding their future permeates the entire industry.
A ministerial attempt in 2010 to bring cohesion within the industry and chart a pathway all sectors can buy into, has so far shown little discernable momentum. Significant ministerial intervention seems unlikely. The lift in wool prices through 2010 and 2011 reduced the urgency for collaborative action or reform, but the emerging economic crisis centred in Europe, and now falling wool prices, may well change all that. But regulating industry structures and practices has proved politically difficult even in times of crisis.
In January 2010 the Campaign for Wool, a generic promotional programme, was launched in the United Kingdom under the patronage of HRH Prince Charles. Views diverge on the merits of this very well-intentioned but in my view, misguided attempt to revive consumer interest in wool. The Campaign risks being a scantly funded reversion to the failed generic ways of the past. It comes up well short of past promotional strategies, which is not surprising given its very limited budget. Recovering markets that have been lost since growers voted to terminate promotional programmes is a huge task. One need look no further than wool’s share of the New Zealand carpet market for evidence of losses that have occurred during the past decade. It is to be hoped any expectation the Campaign for Wool will recover this lost ground and lead wool to nirvana does not end in tears.
If this is where the industry is at after my five-decade engagement with it, one might reasonably ask what satisfaction it’s given me as a career ‘woollie’. Certainly the industry’s relatively recent collapse is a disappointment but fortunately, the highs in my journey since 1960 greatly exceeded the lows. And how dull life would have been without the challenges presented along the way.
While much has changed and been attempted in recent times in particular, the water that flows under the bridge is still as murky as it was a decade and more ago. Views on where the industry came off the rails, on why it has spent much of the past two decades in the doldrums, are many and varied; all are subjective. So too is my view, but that doesn’t preclude me adding it to the mix in later chapters. I’ve seen enough mistakes of the past to recognise new flawed strategies when they poke their head above the parapet.
But before getting too far ahead of myself, I need to go back to the beginning of my story. With my early life being on a farm in the Manawatu, surrounded by sheep and their wool, it was perhaps not by chance that the wool industry would become my career. Relating the story of my childhood, with a potted family history, and telling the story of my career in wool, hopefully will establish the nature of my credentials before I pontificate in later chapters on the achievements of the industry, how it came off the rails and the future now available to it. So, to establish these credentials, let me go back to where it all began.