US mink pelt prices skyrocket with demand in China

3/21/2013 12:30 AM
By Associated Press

SHEBOYGAN FALLS, Wis. (AP) — A decade ago, fur rancher Bob Zimbal had about 34,000 mink at his three southeastern Wisconsin farms. He was in survival mode, struggling to compete with farmers producing cheaper pelts overseas. Then the recession hit and prices tumbled again.

But Zimbal came through the hard times and prospered. These days he's got 54,000 breeding females, 26 miles worth of cages and an on-site feed plant that towers over the snow-covered fields along the Lake Michigan shoreline.

His business is no longer about serving the rich and famous in Hollywood and New York. Now the main market is China, where demand for higher quality furs among the newly wealthy has helped push pelt prices to record levels and shielded U.S. farmers from the sluggish economy. Animal rights activists, who have worked to make fur unfashionable in the U.S., are turning their attention to Asia, but thus far, American fur farmers are reaping greater profits.

"The international market has protected U.S. producers," Zimbal said. "Right now, in China, their consumption is growing faster than the supply. ... They're driving the market right now."

The U.S. fur industry has been a volatile one over the past 15 years. Mink pelt prices sank to about $25 each in 1998 and hovered around $35 over the next few years as farmers in other countries found cheaper ways to produce fur.

Dozens of American fur farms went out of business. According to the U.S. Department of Agriculture, nearly 440 farms were operating in the United States in 1998; by 2005, there were 275. In 2011, the year for which the latest statistics are available, there were 268. Of the 3.1 million pelts they produced, a third came from Wisconsin farms.

Zimbal, a third-generation mink farmer, scrimped through the hard times. Some workers quit for better-paying jobs after he couldn't afford raises, and members of his family took over their chores, feeding the mink and cleaning cages. Zimbal nursed old equipment instead of replacing it, and when he had to swap something out, he bought used instead of new.

"We bought used pick-up trucks and used tractors," he said. "You've got to lean down as much as you can. We did what we had to do to survive."

Prices rebounded in 2006 and 2007, but then the recession struck. Americans struggling to hold on to their jobs and homes stopped shopping for furs. U.S. retail prices hit a 10-year low in 2009.

Enter China. The nation has become the largest fur producer and processor in the world. Chinese consumers flush with cash bought more than half of the fur coats sold globally in 2010, according to the China Leather Industry Association. Chinese fur retail sales for 2012 haven't been officially tallied yet, but the China Chamber of Commerce of Foodstuffs and Native Produce predicts they could top $6 billion.

The country's homegrown furs, however, have been marked by low quality resulting from in-breeding, high feed costs and ensuing poor nutrition, according to a 2010 report from the USDA's Foreign Agricultural Survey.

As a result, Chinese manufacturers have turned to foreign farmers for high-quality pelts. China imported nearly $126 million worth of U.S. mink pelts last year, making it the second most lucrative mink export market for American fur farmers behind South Korea, according to FAS. The North American Fur Auction, which touts itself as the largest fur wholesale auction house in North America, said nearly three quarters of the 700-plus buyers who attended its Toronto auction in February were Chinese.

"The fur coat happens to be one of the trappings of success. ... People in the Far East and Europe see American TV and see us wearing it, they all want to wear it," said Michael Whelan, executive director of Fur Commission USA.

Zhang Yiren, a 25-year-old medical magazine employee, tried on a fur coat in a Shanghai shopping mall recently with her parents.

"I have had two fur coats and bought them for myself," she said. "The angora one cost me 1,600 yuan ($250), and I love the style. It is beautiful and keeps me warm."

Shoppers like Zhang have helped send U.S. wholesale prices surging; mink pelts averaged a record $94 in 2011, up from $41 in 2008, according to the USDA.

The boom has attracted the attention of animal rights activists. Most opposition to fur sales in China has been led by foreign groups, but homegrown activism is growing and some Chinese celebrities have publicly rejected fur, including Hong Huang, a magazine publisher and commentator, TV star Sun Li and talk show host Li Jing.

"Every life on earth is precious — not only human beings but animals too. So I hope people could say no to fur," said Sun in a video posted on the popular Sina Web portal by the animal rights group PETA. "It's really not that beautiful when you sacrifice others' lives for your beautiful look."

But the anti-fur efforts haven't had much effect thus far. Industry groups predict robust growth in China, perhaps by as much as 14 percent per year, in the near future.

That bodes well for U.S. fur farmers like Zimbal.

"In 2009, when the whole world economy was really poor, we still had a profitable year," Zimbal said. "That's when it became clear that China was for real . . . any business that is exporting into China is doing very well."

___

Associated Press writer Kevin Wang in Madison, Wis., and AP researchers Yu Bing and Flora Ji in Beijing and Fu Ting in Shanghai contributed to this report.


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