Making More from Sheep Australian Wool Innovation Limited Meat & Livestock Australia
MODULE 2: Market Focused Wool Production
Tool 2.5
Previous Index Next

Recent AWI international consumer research shows a mass trend toward a lifestyle of health and sustainability, with approximately one in three consumers preferring natural/organic fibres for their clothing. This means demand for organic (or otherwise environmentally assured) food and fibre is quickly growing from niche to mainstream markets. At the retailer level, AWI research has confirmed that major brands and manufacturers are widening their interest in the production and marketing of environmentally friendly apparel such as organic/eco-wool.

Wool is well positioned to meet this growing market with excellent ‘natural’ credentials – it is a natural, renewable, biodegradable protein, produced in extensive grassland ecosystems. However, assurance of these environmental credentials at finished product stage requires proof of compliance to certain standards through the supply chain. There are two major emerging standards: certified organic/biodynamic, and the EU Eco-label.

Organic wool

‘Organic’ food and fibre is produced to a set of standards related to issues such as chemical use, animal welfare and sustainability. The principle behind organic farming is to produce food as ‘naturally’ as possible. Biodynamic farming is a form of organic farming, using preparations made from farm-sourced materials to enhance soil structure and nutrient cycles, hence improving plant and animal growth and development.

Around 300 tonnes of clean certified organic/biodynamic wool is currently produced in Australia – about 0.06% of the national clip. The major certifications used are the Australian National Organic standard (EU 2092/91 compliant) and USDA NOP standards (US Department of Agriculture compliant).

It costs sheep producers about $1,000 – $3,000 annually to comply. This is due to costs of compliance and certification, changes to sheep management practices associated with disease control and potentially higher sheep mortality as a result. Most organic wool producers in Australia are in the low rainfall areas, as their management practices are highly compatible with the organic standards.

There are currently five certifying bodies for organic wool in Australia. Visit their websites at:

EU Eco-label compliant wool

There is an increasing probability that chemical residues left on wool at sale will lead to loss of markets, price penalties or both. At present, only the European Union has published environmental standards for chemical contaminants. These took effect in October 2007. It is expected that environmental standards similar to those of the EU will gradually become a feature of other export destinations.

On the positive side, there are opportunities to capitalise on wool’s natural image by exploiting ‘eco’ marketing niches. The European Union Eco-label provides one such voluntary opportunity. The EU Eco-label is a scheme by which products are certified for their ‘kindness to the environment’. In the case of wool products, this includes chemical residues on raw wool falling below certain prescribed levels.

The EU Eco-label provides a set of standards for residue levels in greasy wool that wool producers can aim to meet by following some simple rules about chemical use. There is no compulsion to try to meet these standards, but they may provide a small price premium if wool is sold through a supportive broker or selling method. Wool can also be tested by AWTA to provide objective evidence of compliance. Contact AWTA for further details

The AWI-funded pesticide residue survey of sale lots in Australia estimates that 41% of the national clip is potentially compliant with the EU Eco-label, although currently only 1% of the national clip is tested to demonstrate compliance. The new EU Eco-label criteria introduced in 2010 includes dicyclanil (an insect growth regulator used in some flystrike prevention treatments), this will result in a significant reduction in the % of Australian wool that is EU Ecolabel compliant.

Producing wool compliant with the EU Eco-label

Wool is not compliant with the EU Eco-label if:

Wool is compliant with the EU Eco-label if:

Sheep have been treated with:

  • any synthetic pyrethroid product

  • any triflumuron product

  • any diflubenzuron product

  • any dicyclanil products

at any time since last shearing.

Or, if sheep have been treated with any diazinon product within the 7 months leading up to shearing. Note: This varies with method of application.

Sheep have not been treated with an external parasite product since last shearing.

Or, if sheep have been treated only with:

  • any cyromazine product

  • any dicyclanil product

  • any macrocyclic lactone product

  • any magnesium fluorosilicate product

at any time since last shearing.

Or, if sheep have been treated with any diazinon product, provided treatment was more than 7 months before shearing. Note this varies with method of application or for other products they must be used with a certain wool harvesting interval (WHI).

- Australian wool harvesting intervals (WHIs) must still be observed.
- Wool harvesting interval (WHI) has replaced the term “wool withholding period” (WHP). The definition of WHI remains the same as for WHP: “the time from application of a chemical to when the wool is shorn”. Wool producers are advised to contact their wool broker regarding market requirements relating to residues.

Wool producers can also declare the residue status of their clip at sale by completing a voluntary vendor declaration in the woolclasser’s specification. This declaration, however, provides only minimal information to the buyer, with the only options being ‘Nil’, ‘Low’, ‘High’ and ‘Not applicable’ in reference to residue risk.

A properly audited broker’s scheme or objective residue test is more likely to attract serious buyers of low-residue wool and enable the broker to declare a clip/lot as EU Eco-label compliant in an auction catalogue.

Environmental Management Systems (EMS)

There is growing interest from consumers interested in knowing more about the conditions that their wool is grown under, if there are good animal, environmental and sustainability management on farm. There are a number of EMS programs currently being used by producers but the important aspect for customers is that it is externally audited and meets international standards such as ISO 14001. The most effective program will cover all enterprises run on the property. Currently there are the following EMS programs available.

There may be other programs moving from a self assessed EMS to external auditing so investigate the options if you wish to pursue an EMS.

Carbon Neutral Wool

Growing concern regarding climate change has resulted in the development of market opportunities for Carbon Neutral Wool. Presently there are limited opportunities for wool producers to offset their wool production and market the clip as Carbon Neutral. The opportunities tend to be occurring further downstream with the buyer, processor or end use customer offsetting the product through the purchase of carbon credits.

In Australia the Carbon Farming Initiative will commence from July 2011 and is a scheme designed to give landholders opportunities to participate in the voluntary Carbon Market this may well open up further markets for wool. Presently only The Merino Company TMC offers a commercial product related to balancing the carbon offset and further information can be found at