Fiona Walker and Janet Smith judge wool at the New Zealand
wool handling championships in Balclutha last year. The
price of wool has climbed to a 22-month high. Photo by
Volatile returns for both meat and wool over many years
highlight the need for change and a more collaborative approach
from ''farm to floor'', Wools of New Zealand chairman Mark
In the company's annual report - the first since the
company's capital raising was completed in February - Mr
Shadbolt said some would say the capital raised was small but
they ''got started''. The company has reported an after-tax
loss of $340,437 for the year ended June 30.
The industry's primary concern had to be with price
volatility. When there was a price spike, manufacturers
switched away from wool, eroding demand and fuelling further
volatility, he said.
At an estimated production cost of $4.50 a kg of greasy wool,
crossbred wool growers had only two years of profitable
returns over the past decade, continuing a 30-year downward
Wools of New Zealand had developed a stable pricing model
designed to stabilise prices for growers and customers alike,
which, over time, would provide incremental growth in demand
and ultimately returns at the farm gate, he said.
Two six-month stable price contracts direct with customers
had been developed and had operated successfully.
''To our knowledge, this is unique in the industry and will
be a mechanism used widely as Wools of New Zealand
develops,'' he said.
Mr Shadbolt thanked the 720 shareholders who ''dug deep'' and
invested $6.05 million of capital. Those shareholders
produced about 14.5 million kg of strong wool annually and
there were a further 300 supportive growers who produced
about 5 million kg.
The company was seeking a means of simple transfer of shares
between farmers, such as for farmers who sold their farm, and
would offer that opportunity shortly on a willing buyer
willing seller basis. Future shareholding would be discussed
over the coming months but no further capital was required by
Wools of New Zealand in the short term. Further capital
raising was not envisaged until at least 2015, he said.
Wools of New Zealand had openly expressed a willingness to
collaborate with participants in the New Zealand wool
industry, Mr Shadbolt said.
''Fruitful discussions'' had been held with New Zealand Wool
Services International, Cavalier Woolscourers Ltd, spinners
and AgResearch and the company continued to talk to Primary
Wools Co-operative as a ''like-minded'' grower-owned entity
towards the aligned goal of merger, he said.
Wools of New Zealand chief executive Ross Townshend said New
Zealand wool should not be pitched against New Zealand wool,
when the ''real enemy'' was synthetic fibre.
The latest ANZ commodity price index posted a fourth
successive monthly increase, rising 1.3% in October, with the
price of wool increasing 10% in the month, climbing to a