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Furs fly as Chinese consumers drive boom in U.S. mink farming

By P.J. Huffstutter

CHICAGO (Reuters) - Battered by the economic downturn and years of animal rights activism in their own backyard, American mink farmers are now in a different sort of quandary: scrambling to keep up with China's demand for all things fur.

Driven by a hunger for high-end clothing and luxury home goods among China's burgeoning middle class, U.S. exports of mink pelts to China jumped to a record $215.5 million last year - more than double both the value and volume shipped in 2009.

That Chinese consumers are clamoring for fuzzy-trimmed backpacks, ermine-edged coats and mink-covered office supplies comes as a welcome respite for the U.S. mustelidae world.

The industry's fortunes had chilled in recent years, with farms shuttering and prices slumping amid the past two recessions and mounting criticism of the fur trade by U.S. and European animal rights groups.

Now, prices of farmed mink pelts are soaring to all-time highs. South Korea and Russia, too, have contributed to a surge in demand that led to shipments of 11.8 million pelts worth $479 million worldwide by U.S. farmers, trappers and auction houses last year. That was nearly triple the level in 2009.

BITTER COLD MEANS GOOD BUSINESS

Weather has kept the demand piling on in recent months. Both Russia and China experienced unusually cold winters late last year. The bitter temperatures half a world away were something to celebrate on Ron Gengel's mink ranch.

For three generations, the Gengel family has raised minks in a northern Illinois farm for furriers around the world. They've survived competition from overseas rivals, slumping prices and an American consumer more interested in fakes than the real pelt.

Such down times have made the Gengels cautious of the current boom and quick to adjust to shifting trends. When international buyers began talking about white fur being considered more chic than black pelts, the family started raising more white mink - and fewer black.

"You have to keep track of so much, from what's happening to the Russian currency to what's the weather forecast in China," said Justine Gengel, Ron's daughter-in-law. "You have to know what the buyers want."

For now, at least, Chinese buyers and manufacturers are flocking to fur auction houses in Seattle and Canada by the droves. At a recent sale held at North American Fur Auctions in Toronto, the demand drove black male mink pelts to an average price of more than $141 each.

Two years ago, similar quality pelts were selling for $98.

"We had over 700 registered buyers and the majority were from China," said Nancy Daigneault, communications director for NAFA. "It was jammed. We've never had that many buyers before, ever."

Chinese consumers bought more than half of the fur coats sold worldwide in 2010, and China's retail sales of fur-related goods - ranging from full-length mink coats to ermine-covered toilet paper holders - were forecast to hit $6 billion in 2012, according to data from the China Chamber of Commerce of Foodstuffs and Native Produce.

Few people understand the mink boom better than Zhang Lingli, manager of Shanghai Zhichuan Garment Co. Ltd. Inside her cozy shop, on the sixth floor of a downtown Shanghai mall, mink pelts are stacked in hues of black, blue and silver. Mink fur, Zhang said, has become particularly popular among those who have the extra cash to spare.

The demand for mink pelts has been increasing every year in the past few years, Zhang said, and so has the price. But her customers simply shrug that off - and pepper her with requests for higher-quality furs from the United States, Canada and Europe.

"They just want fur products," she said.

(Additional reporting by Reuters Shanghai newsroom; Editing by Claudia Parsons)

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