Federated Farmers says it will support the reintroduction of a compulsory wool levy, but only if there is a sound plan of action.
Without that plan, the industry was facing "death by a thousand cuts", Federated Farmers meat and wool chairman Miles Anderson said.
"My fear is that the next time there is a downturn in sheep meat prices, we'll lose a critical amount of breeding stock from the sector and, ultimately, we could see a hollowing out of rural economies, with mass tree-planting on productive farmland," he said in a statement.
This week, the rural lobby organisation's meat and wool council voted to support a levy, provided the Wool Working Group came up with a "clear, practicable and compelling" blueprint for lifting the fibre's profile and returns.
The group, made up of 20 wool producers, processors and other industry representatives, was formed last year and charged with developing a pan-sector action plan.
It already had assurances of government support for an initial period to set up a governance and staff structure to bed in an industry-agreed plan.
The council's vote to advocate for a levy, on a proven plan and structure, was to show farming leaders were committed to the cause, Mr Anderson said.
In the past decade, two farmer votes on a levy were not successful.
The more recent one was in 2014. That followed extensive work by the Wool Levy Review Group, a pan-sector group established in 2012 to investigate collective grower investment.
Federated Farmers believed there was widespread recognition among farmers that there was now urgency for the entire sector - farmer through to manufacturer - to "get on the same page" and win the market share the fibre deserved, Mr Anderson said.
The council also voted in favour of Federated Farmers advocating for the Wool Research Organisation of New Zealand (Wronz) for additional research and development to be funded for strong wool, and greater transparency on funded projects.
At yesterday's South Island wool sale in Christchurch, prices for almost all wool styles and types were largely unchanged from the previous sale.
Despite the current market levels, most growers had favoured meeting the market, reflected by the good clearance in the sale room, PGG Wrightson Wool's South Island sales team said.
A range of prices.-
Est E T Beattie & Son (Outram), nine bales Perendale second-shear AA, 35.8 micron, 80.7% yield, 254 greasy, 315 clean; R Ruxton (Outram), 22 bales crossbred AA, 37.6 micron, 80.4% yield, 269 greasy; 335 clean.