Hope for more clip

Wool Partners says it wants to allow farmers more time. Photo / Glenn Jeffrey

The decision to extend the closing date of its offer to sheep farmers is not due to lack of interest, says the Wool Partners co-operative.

New Zealand's 12,500 wool growers were to decide by Tuesday whether they will take up the group's offer of $65 million worth of shares.

But on Friday the co-operative announced it had extended the deadline to December 17 to allow farmers more time to go through the process, particularly in cases where farms are owned by corporate and trust structures, it said.

"If the level of interest or volume coming through was very low we wouldn't bother," said Wool Partners chairman Jeff Grant.

The co-operative needs the support of growers of half the country's carpet wool output - or 65 million kilograms of greasy wool - to get off the ground.

Farmers will pay $1/share for every kilogram of wool they produce.

Wool Partners aims to consolidate the country's wool clip and earn better returns for farmers by marketing luxury wool brands to top-end consumers overseas.

"This level of support is essential to create an organisation that has size and market power to bring about change," Grant said.

The co-operative's marketing arm, Wool Partners International, has had recent success in the form of export contracts that are returning extra royalties to growers.

One of the more high-profile agreements is a deal to supply high-quality wool for a sustainable upholstery fabric called "WoJo", which will be used in Starbucks coffee houses.

This week it announced new deals with British trading house and textile supplier Sethia Enterprises, and United States custom-designed interiors company Stark.

WPI chief executive Iain Abercrombie said the contracts were earning Kiwi farmers a premium of up to $2/kg for their wool. Prices are currently about $4.75/kg.

Grant said the level of debate and discussion among farmers about the offer had increased dramatically in recent weeks.

Wairarapa grower James Falloon said he had decided to invest in Wool Partners because farmers needed to take back control.

On a recent trip to the US he saw Chinese rugs made of New Zealand wool in New York department store Bloomingdale's. He was told any customer concerns about the products being Chinese-made dissipated as soon as people were told it was New Zealand wool.

New Zealand farmers had done "a bloody good job" over the years to build up that kind of reputation. "And we're just not getting the return for it."

He said the Wool Partners investment was "a huge leap of faith" but farmers had to do something.

Anders Crofoot, another Wairarapa grower, said his cheque had also been sent in.

The Wool Partners model of a farmer-owned co-operative and marketing group was the clearest way forward, he said.

He had moved his clip over from the rival Primary Wool Co-operative (PWC), aligned with rural services company Elders.

PWC deputy chairman Howie Gardner said farmers did not have a lot of spare cash at the moment, and Wool Partners would be seeing a significant loss of clientele due to the compulsory aspect of its offer.

"That's certainly happening. We're picking up a very large number of new clips that we haven't seen before."

PWC had seen minimal losses, he said. He calculated that his own farm would have to put $170,000 over five years into the Wool Partners structure, but only $50,000 into PWC.