Bonanza time for Merino farmers

By Philippa Stevenson

Between the lines


The outlook for wool is fine - very fine and off the back of a Merino.

The bulk of New Zealand's wool industry is struggling to find a direction other than ignoring the coarser fibre and producing meat alone, but Merino farmers look to have struck a bonanza.

The 700 mostly South Island growers (500 of them big producers) have achieved amazing success since winning the right from the Wool Board to chart their own course.

Merino farmers and their champion, Merino NZ, have turned themselves from poor cousin to giant-killer of the Merino wool colossus - Australia.

With barely disguised delight the tiny New Zealand industry claimed recently that it was stealing the limelight from its big brother, winning higher prices (up 50 per cent on last year) and capturing some of the world's top customers.

As well, while the rest of this country's wool struggles with returns that barely cover costs, high-priced Merino is earning a place close to our fashionable wine.

In November, for instance, a single bale of 13.1 micron wool - believed the finest produced and sold on the world market - fetched around $120,000.

Merino NZ chief executive John Brakenridge hammered an important point when he said the world record bale was also a coup "as it focuses attention on the fact that New Zealand produces Merino fibre of an outstanding quality, which until recently completely lost its identity in commodity blends."

More than 1000 stores throughout the world now retail 100 per cent New Zealand Merino products, emphasising that is no longer the case.

Higher profiling moves include Team New Zealand in Merino clothing for the America's Cup, and New Zealand athletes parading at the Sydney Olympics in Merino gear for the first time at any games.

Not surprising then that Merino NZ won prizes at last year's TVNZ/Marketing Magazine marketing awards, including marketer of the year for Mr Brakenridge. It was the first primary sector company to win so well.

That all makes the latest progress report from the costly, $2 million McKinsey and Co study of the rest of the wool industry look glib and worryingly insubstantial.

According to the Independent Stakeholder Group overseeing the project, the three key steps identified so far by McKinsey are "stem the tide," "get ahead" and "reap rewards."

McKinsey principal Andrew Grant won the job after a pitch to the Wool Board annual meeting that slickly promoted his company but gave no hint that for all its apparent experience it had the remotest idea how to solve wool's problems.

Let's hope Merino farmers took enough time out from making money to make a submission.