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Innovative Funding and Creative Ideas are Key to Success for Mountain Meadow Wool

By Ross McSwain, NLPA Correspondent

Mountain Meadow Wool(Colorado Springs, CO, 2/23) -- Entrepreneurship is well and growing in Buffalo, Wyoming, thanks to the efforts and ingenuity of two women who have shared a close friendship and motherhood to 11 children for several decades.

Valerie Spanos and Karen Hostetler have established a modest-sized woolen mill in the heart of Wyoming’s historic ranch country that is helping keep fiber producers in business, providing quality hand knitting yarns to customers in 28 states and employment to some half-dozen or more persons in a rural town with a population of 5,600. Buffalo is in Johnson County, site of the infamous Wyoming Range War in the 1880s-1890s, one of the epic conflicts of the Old West.

Mountain Meadow Wool Co., Inc., was started in 2002 when the two women made a momentous decision; what to do after raising 11 children between them and volunteering at church dinners and other events. Valerie Spanos, the firm’s president, is the wife of Jim Spanos, an explosives expert who works with the mining industry. Her partner, Karen Hostetler, is married to Mike Hostetler, a forester for the State of Wyoming.

The women have extensive business experience, but operating a woolen mill is something they have had to learn every step of the way. Mrs. Spanos has worked in banking, insurance, real estate and pharmacy, while Mrs. Hostetler has extensive experience in natural health, having served as the local hospital’s childbirth educator for over 20 years. Each had sheep projects during their youth while members of the 4-H Club. In addition, Spanos has dabbled in organic garlic production, knitting and making quilts. Hostetler also has a love of crafts, making dolls, weaving and crochet. Before getting involved in the woolen mill, the women explored the possibility of a natural products toy store.

“One of our neighbors raised a large flock of sheep so we thought we would find out how we could get it (wool) made into something usable so that we might have Wyoming wool products,” Spanos said. At the time, Wyoming was the number two wool producer in America, but growers were facing challenges in marketing their wool. “We heard many claims: it cost more to shear a sheep than could be made on the wool; it was cheaper to send it to China for processing; it was easier to subdivide the land for houses than to keep on ranching,” Spanos continued.

The women learned later from one of their husbands about the Small Business Innovative Research program under which some 11 federal agencies are required to set aside 2 percent of their Research and Development budgets for small businesses. They investigated the SBIR further and found the program to be “highly competitive,” Spanos noted. “Small businesses are challenged to come up with solutions for those problems. We were under the impression that the program was more for technical inventions, but we found that the U.S. Department of Agriculture had a topic area called Rural Economic Development.”

After conducting a feasibility study in Phase I, the women received their first grant of $80,000 which allowed them to thoroughly research all possibilities in starting the woolen mill venture, including scale, regulatory requirements, markets and the opportunity to work with wool researchers around the world. When Hostetler visited her daughter in Australia, she visited a Phase I team member at Canesis, Ltd., formerly the Wool Research Institute of New Zealand. They came away from the study with a clear plan: a mid-sized, regional wool scouring and yarn mill targeting the hand-crafting industry. However, implementing the plan involved finding scouring equipment and other processing machinery at reasonable prices.

During Phase II of the SBIR program, a proto-type was developed, thus the wool scouring facility was established in 2006.

 “We had heard that such a program gives you just enough money to get in trouble, so there we were at the end of Phase II - half in and half out with a proto-type built of plywood and pond liner. It has worked for two years and now is being replaced with a five-bowl stainless model of our own making,” Spanos said.

While researching the first phase, Spanos recalled reading an article about the National Livestock Producers Association’s Sheep & Goat Fund.

 “Our application for funding was accepted and we were able to complete the rest of the mill set-up. The Fund helped us at an important stage of our business," she said. "The Fund was used to purchase used equipment from other mills: the opening line from Roddie Wool Scouring Co. in Brady, Texas, a Davis and Thurber carder from Canada, pin drafters from North Carolina, a 184 spindle ring spinner from Rhode Island and a plyer from a bow-string factory in Maine,” Spanos said.

Wyoming Senator Mike Enzi visits with PJ Camino, a member grower, and Gary Senier, Mountain Meadow's Plant Manager.

 The novice mill operators say their processing methods are undertaken with an eye for sustainability.

“We use a citrus-based detergent and water temperatures of 150 degrees. We have completed a study on the waste water stream and are in the process of applying for additional SBIR assistance to allow is to capture wool grease for resale,” Spanos said. Wool grease is used in industrial applications as a lubricant and can be refined into lanolin for use in cosmetics. “Once our scouring line and water treatment project are completed, we would like to add a comb and possibly some type of finishing equipment.”

Spanos said the firm’s plant is located just outside the Buffalo city limits in a 12,500 square-foot building erected in about 2004. The building is leased from the City and County Joint Powers Economic Development Board.

In the last year, the plant processed about 15,000 pounds of greasy wool, but as customer base grows, plans are to process 20,000 pounds in the next year. Greasy wool is currently purchased from growers in Wyoming and Montana.

“The type of yarn that we produce is considered semi-worsted, somewhere in between the woolen and worsted system. Our yarn is light and bouncy and has received rave reviews from some of the “rock stars” of the knitting world,” Spanos noted. “Our research has found that our wool yarn is best suited for apparel and next to the skin wear.”

The firm has basically two kinds of customers; small fiber producers seeking to process their fiber into roving and yarn for sale in home communities and at farm stores and on-line shops, and customers who purchase the yarns and rovings made with fiber from participants in our producer program, which accounts for about 60 percent of their current business. These customers are individual dyers selling on-line and through independently owned yarn shops nationwide. Currently, shops in 28 states and two foreign countries are buying Mountain Meadow yarns and the firm has had additional inquiries in Europe and Brazil.

Some select producers supplying wool to the mill are participating in a profit-sharing or value-added program that can be advantageous to both mill and grower.Hooo a single ply yarn.

 “We approached a group of growers with flocks producing a micron count of less than 24, who practice good animal husbandry and have an adventurous spirit. They own the wool until it is sold as yarn. They then receive 10 percent of the retail price and 20 percent of the wholesale price. The further the wool is processed, the more money they receive,” Spanos said. “We are currently able to pay about twice what they would receive conventionally. However, they must wait for the sale and we are not large enough yet to take more than a portion of their clips. This puts the mill in the position of advocating for the producers throughout the supply chain. We also are able to give them some feedback on issues relating to the wool, such as vegetable matter content, staple length and breeding, twine contamination and shearing. It also helps us to keep lines of communication open with growers to help us understand they challenges they face,” Spanos explained.

The firm markets their yarn products through its website and tradeshow participation. The National Needle Arts Association has been a most effective organization in their marketing, Spanos said. The company has trademarked the name Mountain Merino which also has helped to achieve an assurance of quality to manufacturing customers.

The mill’s operations are not limited to wool fiber. Several yarn products are blends of alpaca and wool and the firm is now involved in a joint project with the North American Alpaca Fiber Producers in creating a three-ply fingering weight yarn of 50 percent wool and 50 percent alpaca.

 “We are continuing to explore opportunities for wool use in other applications,” Spanos said. “We are speaking with vendors supplying the mining industry on the benefits of using wool and wool felt in place of man-made fibers and as a natural oil absorbent in sound and vibration mitigation.”

For more information about Mountain Meadows Wool, visit their website at

More information about the NLPA Sheep & Goat, including the application, descriptions of funded projects, news and industry links, please visit or contact Scharee Atchison at 800.237.7193, ext. 10 or via email at

 The NLPA Sheep & Goat Fund is available to qualified applicants at a competitive interest rate. (Please call for current rates). Some basic information about the Fund includes:

  • Loans are available in amounts up to $1 million per applicant.
  • Sole proprietors are ineligible, but most other legal entities are eligible (partnerships, corporations, etc.)
  • Rates and terms are determined during the approval process.
  • The Fund is delivered through either direct loans or loan guarantees – grants are not available.

Applications can be submitted at any time without subject to deadlines. There is a one-time, nonrefundable fee of $100.


The National Livestock Producers Association, founded in 1921, is an organization of livestock marketing cooperatives and credit corporations representing more than 150,000 livestock producers nationwide.

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