Relative economic value of wool processing parameters for New Zealand strong wool between 2003 and 2007
Price trends for a total of 147,416 lots of wool in the strong wool segment of the New Zealand clip sold at auction between 1 July 2003 and 30 June 2007 were analysed by multiple regression analysis to determine the effect on price of five key characteristics known to affect wool processing performance. Changes in exchange rate were allowed for by covariance against the exchange rate of the US dollar on the day of the auction. The residual standard deviation within the data set was 20.4 c/kg clean. Mean values of the slope of the regression, or relative economic value, were 0.4 ± 0.2 c/ kg clean/mm change in barbe length, -1.9 ± 0.9 c/kg clean/μm change in mean fibre diameter, 2.5 ± 0.5 c/kg clean/CIE Y value change in brightness, -5.0 ± 0.6 c/kg clean/CIE Y-Z value change in intensity of yellowness and -16.8 ± 3.0 c/kg clean/% change in vegetable matter contamination. These estimated values align closely with values estimated in 1991 for the New Zealand clip as a whole confirming that despite the significant changes that have occurred within the wool processing industry the economic significance of individual wool characteristics to wool processors have not changed.
Relative economic values of wool processing parameters
The wool described by the New Zealand Wool Board's auction data may be considered to be a vector space defined by axes which are the wool processing parameters. Analysis of this wool vector space gives indications of the relative economic values of the wool properties. Data from 1984 to 1990 has been analysed to give relative economic values and, ahbough short term values vary considerably, them appeartobesomelongertermtrends.WoolbulkaspredictedfromNZWBtypeshowsageneralincreaseinprium,andwoolcolour,~sc~~ by objectively measured yellowness and brightness, has shown increased importance for determining wool price, with brightness taking over from yellowness as the mote important of the two. 'Ibe correlation between parameters in the range of wools offered at New Zealand auctions not only makes it difficult to determine the relative economic importance of the wool properties but limits the range of blend specifications a wool processor can work with. Hence, altboughpremiumsamnotalwaysobvious,it isimportanttotheprocessorthatextremesofwoolpropertiesareavailabletoallowthem~um flexibility when making up parcels of wool for processing.
38—THE APPLICATION OF SOME STANDARD TECHNIQUES TO THE OBJECTIVE SHORT-TERM FORECASTING OF WOOL PRICES
The application of some standard forecasting techniques to wool prices is considered. It is shown that these methods lead to the conclusion that a convenient forecast for the next month's price is the current month's price, and limits of error for this forecast are given.