The announcement that Wool Partners Co-operative was unable to get half the national wool clip signed up wasn’t unexpected.
It was always a big ask and the continued extensions to closing day showed the co-op was struggling to get the support it needed.
Opposition from other players, which included misinformation didn’t help, and rising prices might have persuaded some that the co-op wasn’t needed.
However, the loss of this battle doesn’t mean the campaign is over.
Bruce Wills, Federated Farmers Meat & Fibre spokesman said the co-op is down but not out.
“To be successful, truly successful, a cooperative has to be built from the bottom up. What I take heart from is that despite some of the worst years for profitability, so many had shared up.
“Yet wool growers have now spoken and the requirements of the WPC prospectus have not been met so we need to move on.
“Federated Farmers is determined to make certain that we don’t look back on this day as an opportunity wasted.
It’s why Federated Farmers is keen to talk with Wool Partners International and all industry players about a grower owned model. I’m still personally convinced that together in a cooperative we can make things happen for our industry.
“Consolidation and unity is important to wool growers as is much closer involvement in the selling of our fibre.
“There have been many reports into wool but most conclude that farmers should remain owners of their fibre until at least the end of first stage processing. There’s something fundamental about that.
“WPC put up an option that they felt might meet this requirement and got the largest voluntary capital raising the wool industry has ever seen, with 40 million kilograms committed.
“That tells me a sizeable minority of wool growers want a cooperative. They put their money where their mouth was.
“Doing nothing isn’t an option for farmers or the meat and wool industry. Wool is integral to the sheep industry’s long term prosperity.
Although the meat industry has got most of the blame for poor returns in recent years, low prices for wool, pelts, tallow and other by-prooducts was also responsible.
A shortage of sheep and rising demand for wool is giving much better prices this season but unless there are some fundamental changes to the way wool is marketed we can’t rely on them holding up.
WPC chair Jeff Grant offers some hope for those who want to see some changes:
WPC planned to raise $65 million to buy assets and use the commitment from growers to supply half the country’s wool clip, to have a greater influence on the market.
They planned to secure contracts with carpet retailers in Europe, United Kingdom and the United States and use brands linked to New Zealand’s and wool’s natural, sustainable environment and production systems to command premium prices and grow market share.
At present, most coarse or strong wool is sold at auction or directly to merchants with little or no use of those attributes, which Mr Grant said were increasingly being demanded by discerning customers.
But efforts to change the way strong wool is sold may not have died out, with backers of WPC saying there was sufficient interest from farmers to see if an alternative structure can be salvaged.
WPC had some good ideas to add value to wool and ensure farmers got more for their clip.
The directors won’t be able to do all they’d planned with a lesser amount of wool but I hope they have a Plan B which enables those farmers who are prepared to commit to them to do so and share the better returns.