Betting on a Co-Op a new strategy for wool

I will stick my neck out and predict that before the end of the year we will see most strong-wool growers joining together to sell their wool to their own co-operative reports Jon Morgan from the Dominion. Then, just maybe, wool returns will start climbing out of their 20-year trough. The latest attempt to breathe new life into the industry can be traced back to the setting up of a task force in 2005. This farmer-initiated effort proposed bold action - tear down the old structures and rebuild them with farmers in charge.This incensed the wool merchants and exporters who had run the time-honoured auction system, and harsh words were exchanged. But recently tempers have cooled. The farmers' rejection of a levy to pay for research galvanised the Government to action late last year. Another task force was set up, and this time some semblance of unity was glimpsed. The merchants and exporters still weren't happy but were prepared to wait and see what developed. The Government appointed former Treasury boffin Murray Horn to see if he could get all the factions working together. It's still too early to gauge his success. In the meantime, a couple of commercial entities have grabbed the opportunity to claim the wool of farmers dissatisfied with the old system. They are both Kiwi companies. PGG Wrightson bankrolled the marketing arm of a proposed new farmer co-operative - the new structure envisaged by the 2005 task force - and Elders, already allied with the small Primary Wools co- operative, announced its own marketing operation. This is all a bit too confusing for farmers. Some have committed their wool to these new entities but most are waiting to see proof of the claims they are making about breaking into the European and United States markets and whether this means increased prices for their wool. They had a part-answer last week when the Elders Primary Wool venture announced a $1.30 a kilogram bonus on wool wanted for a trial shipment to a Californian carpetmaker. The Wrightson-backed Wool Partners International is also reporting a great deal of interest in its brands and traceability scheme from manufacturers and plans to present details at a series of meetings around the country later this month. At the same time, auction prices have shown a 20 per cent rise as manufacturers build up stocks in a cautious recovery from the global recession.So, while there's talk of promising international market gains, there's still confusion around the procurement of wool within NZ. Growers have several options and aren't sure which one to take.