New Zealand Wool Prices Hit Highest Levels Since 2011 Amid Tight Supply and Surging Demand
Strong competition and tightening supply have seen wool reach its highest prices paid at auction since 2011.
But Wool Levy Group vice-chairman Derrick Millton says Wools of NZ was one of two grower-owned companies that “scuttled” the wool levy, which would have achieved that leadership. Now those companies must show what they can do in the absence of a levy, he says.
But Millton also believes there may be other ways of raising funds from growers for industry-good activities.
Shadbolt told Rural News the rejection of the wool levy leaves the future of wool in the companies’ hands and “that is probably where it should be”. Commercial efforts such as Wools of NZ with its branded strategy or Primary Wool Cooperative’s Just Shorn brand – rather than a levy – will bring benefits to the bottom line.
But he wants the parties to talk soon about an industry leadership group to look at issues such as education.
“I would support an industry leadership group as we promoted as an extension of WIRL (Wool Industry Research Ltd) or something to that effect.
“There has been discussion throughout the levy campaign as to ‘if it doesn’t happen, what will we do next?’ I don’t support the levies obviously, but we need a leadership group, and extension of WIRL with blinkers off will be beneficial.
“I’m trying to take a forward looking position because anybody who takes on something in the industry realises how hard it is and that’s why I commend the effort of the levy group.” He says the result was a reflection on the history of levies rather than the future.
Levy group vice-chairman Millton says the group was tasked with presenting a levy proposal to farmers. “We did our best but clearly it was not what the majority of farmers wanted.”
Millton says the proposal was scuttled by two grower-owned commercial companies that convinced some wool growers not to vote for the proposal. The onus is now on those companies to show what they can do in industry leadership and to articulate that.
“In my view the chair of NZ Merino [Ruth Richardson] stating that a wool levy was a dumb idea was irresponsible when the business represents such a small slice of the wool industry.”
He claims it is not realistic to believe a post-harvest research business, WRONZ and its subsidiary WIRL, can “morph” into an industry-good organisation.
Millton believes there are alternative ways to collect funds for industry-good activities but they must be collected evenly across the industry. But it would require companies to step up to the plate.
“For Mark Shadbolt to suggest we now need an industry summit to find a way forward is too late, the pan-industry wool levy review group has been operating for three years to bring unity to this industry.
“We have to settle and see what is now required. But wool growers have no collective industry voice. What do we do about education, innovation and communication? How do we fund and promote these things in the future.”
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