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Fur markets hit by downturn

“It’s going to be a bit of a challenge this year to market the fur.”

– Dave Bewick

After a number of good years, trappers and fur farmers may be heading back into a lean spell, as tumbling stock markets around the world signal the arrival of a major economic downturn.

With less cash in their wallets, consumers may shy away from shelling out large sums to put warm fur on their backs.

“Last year was probably one of the best years that we’ve had in many, many years,” said Dave Bewick, vice-president of wild fur operations for North American Fur Auction. The company, whose trading activities go back to the formation of the Hudson’s Bay Company in 1670, has a receiving depot on Henry Avenue in Winnipeg.

“Everybody was looking forward to this year and then, boom, the wheels fell off. We’ve got to struggle through this year and see what happens.”

Demand from cold countries, especially Russia and China, where fur garments are highly prized for their warmth, had been soaring in recent years in line with their booming economies.

Competition among buyers for wild and ranch furs at global auctions pushed prices for good-quality coyote and beaver pelts up to around $50 each after more than a decade of dismal sale results.

Current prices may fall to $25-$30 for coyotes, said Bewick. Beaver, which last year averaged $30, may be down by 30-40 per cent, he added.

The latest fur auction results in Copenhagen, Denmark, and Helsinki, Finland, have lopped off some 20 per cent off recent highs, and now all eyes are on the upcoming sale results this week in Toronto to see if prices will fall as steeply as they did in 1987, when a stock market collapse in the United States signalled a long slump in the demand for fur.

In recent years, the industry was able to gradually overcome by marketing more aggressively in the Far East and Russia.

Crunched for credit

“It’s going to be a bit of a challenge this year to market the fur,” said Bewick. “It’s a big question mark, everything is still up in the air.”

Tighter access to credit may also be affecting bids at auction, and sellers must be cautious about who they agree to sell to, he added.

Like farmers, trappers have learned to cope with the feast-and-famine cycles of their industry. Apart from those with registered traplines in the north who depend on their seasonal occupation for the bulk of their annual income, many trappers, especially part-timers in the south, weather market downturns by seeking other employment, he said.

Doug Asselstine, 47, a part-time trapper from Oak Lake, who set his first trap at the age of eight, still plans to go out with his daughter to catch a few beaver in coming weeks, regardless of where prices are headed.

“I’m pretty much just showing kids how to do it. If they want to learn, I’ll show them. But I’m getting too old now to set too many traps out,” he said.

“I don’t make any money at it, but it’s something I like doing.”

Asselstine often gets calls from landowners who want help removing nuisance animals such as beaver and coyotes, but the economics of putting gas in a half-ton truck limit how much he can do, he said.

Bounties offered by some R. M. s aren’t high enough to be much of an incentive, he added, and he has never bothered to try and collect the extra money.

“My daughter, she’s all grown up and married now, but every winter she likes to come out and go for a Ski-Doo ride, trap and be with her dad,” he said.

Short-haired fur such as mink has been the market leader in recent years, but long-haired pelts such as coyote and fox have lately gotten a boost from stronger demand for fur trim on parkas and coats.

No marketing board

Fur farmers, like their counterparts in the hog or cattle industry, don’t have the option of laying low during the bad years.

Norman Baldwin, a mink rancher for five decades, said that the fur farmers just have to take the good times with the bad.

“We don’t have supply management or a marketing board or anything like that,” said Baldwin, adding that like wild fur, ranch-raised furs are sold at major auctions that are held two or three times a year and cater to international buyers.

In recent years, his sons Kerry and Kelly have taken over the family operation that began in 1929 near Starbuck. They own 2,000 breeding females and also run a mink feed production plant serving the province’s half-dozen other fur farms.

In the past month, prices for ranch-raised mink have fallen some 20 per cent from the five-year average of roughly $55 to $60 per pelt, he said.

As in other agricultural sectors, fur farmers are price takers, he noted. Even though Canada is almost as cold as Russia, where everyone wears fur, local demand for fur garments is not large enough to support a local value-added processing industry, he said.

The “Wal-Martization” trend that has seen labour-intensive jobs in many sectors migrate to the Far East has affected the fur industry as well, he added.

“Winnipeg used to have a lot fur garment manufacturing, but that’s all gone now. Except for some furriers in Montreal, it’s all been moved to China,” said Baldwin.

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