Merino growers met last year in the wake of the rejection of Meat & Wool NZ’s wool levy to consider a separate impost for fine wools. While they opted not to roll out a new levy, work has continued behind the scenes to find a way to ensure the fine wool industry has the support it needs. Meat & Wool was forced to slash about $11m of programmes including shearing and wool handling, with current funds set to run out in April. Merino growers expect replacement funding for fine wool to be sourced from marketing group the NZ Merino Co, big shearing companies and growers themselves.

Merino growers are awaiting the report from the Wool Taskforce convened by Agriculture Minister David Carter (after the Meat & Wool levy was shot down last August) before making a final decision. Carter has been a keen supporter of reinstating a levy but wants to tread carefully given the level of frustration among growers, especially of coarse wool, who watched prices collapse while continuing to pay their levies. Wool Partners International has taken flack for proposing a 3% levy to fund marketing. Carter has already seen the draft wool report, which pushes for cohesion in a fragmented industry and “suggests growers have to reconnect back with the purchaser of wool products.” He expects to have the final report by the end of January.

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Carter says “it’s a useful document for me to use to try to get some unity back into the industry.” Merino took a battering along with coarse wool with the global downturn, though the pain was softened by the certainty of Icebreaker-type contracts. There are signs demand may be returning. At the final 2009 sale by Cape Wool in South Africa its merino wool indicator was up 25% from a year earlier and the company is bullish on prices through 2010.

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