Wool levy could cost farmers $200-$300 a year

Sheep farmers will vote early next year on a proposed wool levy to invest in work that grows demand and value for New Zealand's wool clip.

Beef and Lamb NZ [B+LNZ ] and a new group, the New Zealand Wool Collective, made the announcement, with work now underway to encourage farmers to vote in favour.

Additional funds from industry and government would also be sought for specific projects.

"It varies by scale, the amount we're looking at is 2-3 cents per kilogram," Ross McIsaac, chief executive of New Zealand Wool Collective said.

"It's hard to define an average farm, but for a farm that maybe has 2000 sheep and produces about 10 tonnes of wool you're looking at about $200 to $300 per year."

The Wool Collective was formed in a merger earlier this year, taking over from the Campaign for Wool NZ and Wool Impact.

"It builds on the consolidation of the work being done by Wool Impact and Campaign for Wool NZ and the innovation and investment being made by individual wool businesses across the sector," McIsaac said.

"Momentum behind wool is evident in price lifts, brand activity and consumer interest. That momentum needs to be sustained and built on.

"We've worked with commercial wool businesses, with input from growers and brands using wool, to refine a programme of work that addresses foundational sector needs that underpin demand, while leaving commercial activity to individual businesses. This is the work that no one business or grower can do alone."

Farmers paid a wool levy for many years, to promote the sector, build markets and fund research and development.

But in 2003, wool growers voted the NZ Wool Board out, ending the levy, and since then, attempts at reinstatement have failed.

"Being part of B+LNZ would allow us to deliver dedicated wool work in a cost-effective way without doubling up on administration and overheads," he said.

"It's about securing the long-term financial backing needed to realise greater value for growers, industry participants and the wider wool sector."

B+LNZ chairperson Kate Acland said the levy proposal was a positive step forward to build profitability for sheep farmers.

"As a sheep farmer, keeping the wool part of our businesses profitable will be a critical part of our ongoing financial sustainability. Although values have increased recently, there are some great opportunities to do more. Collective investment in key areas will help grow and sustain stronger wool prices at the farmgate," she said.

"With funding for New Zealand Wool Collective coming to an end in late 2027, a grower levy will be essential to continue building on the work that is underway. It would also fund wool-specific activities behind the farm gate, ensuring wool is considered as part of the whole-farm system.

"Bringing wool-focused work into B+LNZ is a positive and practical step - it provides the most cost-effective way to undertake this work."

Money collected would be invested across both the strong and fine wool sectors.

If approved, the wool levy would likely start to be collected in December 2027 or early 2028.

PGG Wrightson national auction manager Dave Burridge said since the levy was done away with, there had been 25 years of poor returns for wool growers.

"It's the old saying of you do nothing, you'll get nothing."

Industry good practices had declined - with less resourcing for shearing and woolhandling training - and promotional spending was below what was needed to compete with synthetic fibres, he said.

He was pleased to see a levy proposal put back on the table.

"If growers were to get in behind, and industry, to put a fund together that all contribute, not just some but everyone's contributing, I think we'll get some real go forward."