Supply contracts are "gold" for farmers.
That is the message from the New Zealand Merino Company before its conference in Christchurch on Monday.
As commodity prices started to slide, the primary industry was once more reminded that commodity complacency was a "huge risk" to the country's economy.
That, and the power of collaboration, were key topics to be addressed at the conference, which has attracted registrations from more than 500 growers and industry partners.
The ASB New Zealand commodity price index declined once again in the week to April 13.
Declines in global prices, along with a slight pick-up in the NZD/USD, resulted in a 1.3% decline in the NZD index.
NZD commodity prices were now almost 18% below levels a year ago.
Contracts had transformed the merino industry over the past 15 years, with international brands such as Icebreaker and SmartWool committing to the model and establishing long-standing relationships with the farmers who supplied their fibre, New Zealand Merino chief executive John Brakenridge said in a statement.
Through NZM, the merino sector now had about $100 million of forward contracts in place, insulating farmers from drops in the commodity market and protecting brands from price spikes.
New brands were now also recognising the value of contracts and NZM had established supply contracts with companies in China, Japan, the United Kingdom, Italy, the United States and New Zealand.
"Commodity complacency is a big threat for New Zealand. The primary sector is the real economic engine room of this country, but we can't forget that we are small players on a global scale.
"We need to be smart about how we tell our story to the world in order to amplify our competitive advantage," Mr Brakenridge said.
Collaboration was key to the future success of the primary sector, and the opportunities provided by the Government's primary growth partnership had emphasised the power of collaboration.
"Our partnership with Silver Fern Farms is a good example where we translate the strengths of both companies into measurable results for our farmers," he said.
The Alpine Origin Merino partnership aimed to unlock additional value for the merino industry through establishing new markets for meat and co-products such as leather and lanolin.
Canterbury Employers' Chamber of Commerce chief executive Peter Townsend will be guest speaker at the conference, and will outline how agriculture and technology are key to the rebuilding of Christchurch.
