Pushing in support of strong wool

• Published date: 19 October 2021
• Publication title: Ensign, The

The strong wool industry is ‘‘broken’’ and two companies must merge to lift prices for farmers, company directors say.

A national roadshow about a proposed merger between Wools of New Zealand and Primary Wool Co-operative made its final six stops in the South last week.

Wools of New Zealand chief executive John McWhirter and Primary Wool Co-operative chairman Richard Young talked to farmer shareholders about a strategy to manufacture and sell woollen carpet which could compete with synthetic carpet on price.

The roadshow stopped in Mossburn and Invercargill on Monday, Balclutha and Gore on Tuesday and Lawrence and Palmerston on Wednesday.

More than 40 farmers attended the second-to-last stop on the national roadshow at Lawrence Golf Club.

Mr Young said a merger, using the recognised Wools of New Zealand brand, would change the game and demand a good price for wool.

‘‘We’ve got to give you the confidence we’ve got a plan to try and lift the price of wool because we need two income streams off sheep — to keep the pine trees off the country and to keep our rural communities vibrant — so it’s hugely important that this comes off.’’

The companies traded 37% of the wool clip in New Zealand and wanted to increase its share to 50%.

‘‘We just need to get the vote over the line and get on with it.’’

Mr McWhirter started his speech by asking anyone to stand if they were happy with the price for strong wool.

Everyone remained seated.

Mr McWhirter said he could understand why farmers wanted more than $2 a kilogram.

The volume of strong wool being produced had been dropping for decades, but demand for the wool was falling at a faster rate.

That combination was causing a surplus of stock, reducing the price.

About 10,000 farmers were growing wool for about 10 companies to buy at auction on behalf of international spinners.

Mr McWhirter wanted to solve the problem faced by the strong wool industry by creating in the wool market the same dynamic as the current housing market was governed by, in which there was ‘‘buyer tension’’ because of supply not meeting demand.

The issue of the oversupply was highlighted by the fact that of the wool sold by auction in 2019, [which constituted 78% of the cut or more than 570,000 bales] 1700 bales failed to sell.

Of the rest of the 2019 clip, 6% (or more than 40,000 bales) was sold for carpet production in New Zealand or bought direct (11% or about 80,000 bales).

The rest, (about 43,000 bales) was oversupply and there was no buyer.

‘‘The...