Meat Co-Ops look to wool

Wool Growers Holdings need for more capital will come to head  next month with a prospectus for more money.

How farmers will support this venture will be crucial in it's success, especially after their non levy vote with Meat and Wool NZ.

The  Meat Co-Op's support in principle and desire to increase farmers income from wool is heartening, as the sheep industry battles to retain market share in the land use stakes.

With a significant lift in wool prices that has been building all season, the timing of this prospectus release will be helpful.

The country's two meat processing co-operatives are considering investing in Wool Grower Holdings, but are waiting to see its long awaited prospectus. Both Alliance Group and Silver Fern Farms, which sell more than 50,000 bales of wool between them, have confirmed they will both consider putting money in the co-operative, provided the prospectus and business plan add up.

"We've got an open mind because we are anxious for farmers to have an alternative positive income stream to support the meat side of their business," Alliance chairman Owen Poole said. SFF's Keith Cooper said while a farmer-owned wool co-operative was consistent with the company's philosophy, the decision needed to be based on sound business principles.

Wool Grower Holdings chairman Jeff Grant said while there were restrictions on what information he could release, he confirmed the final prospectus would differ from that originally proposed. The plan is still to buy PGG Wrightson's stake in WPI, but it will now involve the purchase of strategic assets in the wool exporter, rather than all its assets.

Earlier this year, the Otago Daily Times reported that growers would be invited to invest up to $1 for every kilogram of greasy wool supplied in a year, with payments of 20c a kg a year spread over five years. There could be a maximum cap in the number of shares held, as 80% of livestock was owned by between 25% and 30% of growers.