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Fiber supply chain study

September 20, 2016
white horned sheep

Deciding what hat or sweater to buy might conjure criteria from warmth to fashionability. To local wool and fiber producers and consumers, considerations also include the impact on the landscape.

“If we help small landowners hold onto a few more animals, the impact on the landscape is really substantial,” said Erin Meier, Executive Director of the University of Minnesota Extension Regional Sustainable Development Partnerships’ Southeast region (Southeast RSDP).

“Diversity in the landscape is really important,” said Connie Carlson, RSDP’s New Crop Market Integration Specialist. “This is one piece of continuing toward that movement.”

But getting local wool into the hands of consumers is not simple. Farmers need economically viable ways to get their wool from farm to processor to retail outlet, and consumers need to understand the implications of their clothing decisions.

In 2014, Jean Mueller, a lifelong sheep farmer and founder of the Natural Fiber Alliance, approached the Southeast RSDP with an idea for a project that would research interest in local wool among suppliers – the processors and manufacturers that farmers depend on to reach consumers. After months of project scoping and development through the Southeast RSDP, other RSDP regions and statewide staff recommended use of RSDP’s Mary J. Page Community-University Partnerships Fund to support a graduate student researcher.

In fall 2015, Applied Economics doctoral student Zhiyou (Austin) Yang began researching the needs of players along the local fiber supply chain, and identifying opportunities to develop additional demand for locally produced fiber. The Central, Southeast, and Southwest RSDPs provided additional funding for Yang to continue his research in spring 2016 and design next steps in creating new markets.

Austin Yang touring the Faribault Woolen Mill
Applied Economics student Austin Yang tours the Faribault Woolen Mill.

Market research

Earlier research by Applied Economics Professor Hikaru Peterson indicated consumers are willing to pay a higher price for local, natural fiber. Yang focused on manufacturers and intermediate processors. As articulated in Yang’s research summary, “We believe that it is essential to attain the attitudes of the supply side about such consumer-driven demand and find out if the local wool industry can benefit from such unexploited revenues.”

Yang designed and implemented a survey of manufacturers and intermediate processors in the Upper Midwest wool industry (Minnesota, Iowa, Michigan, North Dakota, South Dakota and Wisconsin).  Twelve manufacturers and eight intermediate wool processors responded to the survey. “We need data to tell us that there’s a good possibility for markets out there, because if we don’t have the markets, we can’t sell it,” said project lead Mueller.

Survey findings supported that interest in local wool exists on the supply side as well. In general, surveyed manufacturers indicated they were favorable toward the market potential for Upper Midwest wool based on its local identity, and were willing to pay a premium of 15 percent or less for it. Although they perceived added value of Upper Midwest wool, respondents were mixed in their willingness to pay an additional premium for wool certified as organic by the U.S. Department of Agriculture (USDA). As articulated in Yang’s research summary, “It is still possible to exploit this narrower market, but properly designed marketing and awareness raising plans will be essential. In addition, a new set of organic standards tailored specifically to the wool or fiber industry will be of great help.” Results also suggested that intermediate respondents may operate under a narrower profit margin than their manufacturer counterparts.

Overall, Yang concluded that “further developing the local wool business in the Upper Midwest is feasible and promising.” 

According to Meier, Yang’s research has given wool producers and processors data that enable them “to start to build relationships across the market based on research.”

hand reaching through fence to pet a brown sheep
Natural Fiber Alliance Sheep and Fiber Farm Tour 2015.

Community-University connections

Meier credited the project’s success in large part to the breadth and strength of community-University connections cultivated by Mueller, who organized monthly meetings on the Twin Cities campus. Core project team members included Yang; Professor Peterson; a representative from the University’s Center for Urban and Regional Affairs (CURA) Community Assistantship Program (CAP), which administers the Mary Page fund; RSDP’s sustainable agriculture staff (Greg Schweser, Karen Lanthier and Connie Carlson); and RSDP’s Southeast, Central and Southwest Executive Directors (Erin Meier, Molly Zins and David Fluegel).

Mueller also created an advisory committee of stakeholders and specialists around the state who advised on the project, including Renewing the Countryside Executive Director Jan Joannides. Bob Padula of Minnesota Lamb and Wool Producers helped the team understand the commercial wool world. “Jean kept pulling in resources,” Meier said.

According to Mueller, “It was a great mixture of people, and there were people from the Natural Fiber Alliance who are smaller farmers.”

Next steps

With the help of Carlson, Mueller and partners are now approaching local clothing companies with a portfolio of information on the consumer-driven market to explore companies’ interest in selling locally sourced wool. Yang’s research, and earlier research by Peterson, provide research-based information on the opportunity to develop a market for local wool. The portfolio also provides information about the current wool industry and vision for the future.

farm land with trees and large hills in the background with sun shining through a light fog
Sheep farmer Jean Mueller's farm.

The Natural Fiber Alliance is also sponsoring the 1st Annual Wool Conference at the University of Minnesota. An important goal of Yang’s research was to put it in the hands of those who can use it, and he’ll be sharing his research at the conference. According to Mueller, “Research will be available at the conference … so you have a little bit of foundation to go in and ask for some funding for your fiber project. I’m excited about being able to provide that to people.”

The conference also features Professor Peterson speaking on consumer preferences for wool products, as well as presentations by Mueller, Padula and Melanie Pamp, President of Minnesota Lamb and Wool Producers. Following the conference, attendees have the opportunity to tour sheep farms and the Faribault Woolen Mill as part of the Alliance’s Sheep and Fiber Farm Tour.

“These small producers are thinking big,” Meier said. “They’re thinking about cross-sectoral ways to collaborate and ways to build markets. These are big questions.”

Caryn Mohr, September 2016

Caryn Mohr is the assistant statewide director of the University of Minnesota Extension Regional Sustainable Development Partnerships.

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