Elders says deal can double wool pricel

Members of the Elders Primary Wool team, Bob Peffers, left, and Karl Johnson at the launch of the Just Shorn brand at Mystery Creek last week.

15-06-2009 | Tim Fulton

Elders Primary Wool believes it can double the value of wool at the farm gate with the launch of a new carpet label for the United States market.

The Just Shorn New Zealand carpet brand will be marketed by Elders' new-found retail associate, CCA Global Partners and launched in the big carpet retailer's US stores in January 2010.

Firstly however, Elders must secure the strong wool it needs from New Zealand growers, to meet the specifications of its five US manufacturers.

Elders NZ managing director Stuart Chapman says growers hoping to double their existing wool price will be familiar with these specifications already.

"An outcome with regard to quality will be along the lines of what all growers know is already good carpet wool: Three to four inch strong wool with a crimp suitable for carpet, good colour and low vegetable matter."

Speaking at a launch at the National Agricultural Fieldays last week, Chapman said there would be enough of this wool available to meet CCA's initial retail requirements but conceded that the standard of the NZ strong wool clip was generally below par.

"We will need to lift our quality in a lot of circumstances. There are a lot of farmers that still genuinely believe in quality but there is (also) a lot of farmers that have lost the ability to meet good practice standards because there's been no incentive."

Elders was working toward a goal of price parity with synthetics, which currently had "40%" jump on the value of wool. That differential was a "disgrace", Chapman said.

Elders expects to offer its first contracts to growers by the end of July, for supply of wool "that will link directly back to manufacturers".

Preference will be given to current Elders suppliers but ultimately the critical requirement will be meeting those manufacturer specifications. This group could potentially consume a volume of wool equivalent to a quarter of the NZ strong wool clip, Chapman said.

As important as it is to have a market for the wool, Elders says the vital link in its venture is its link to CCA, which will be the sole marketer of the Just Shorn brand.

The man charged with developing the label, Karl Johnson from US-based Brand Content, said the advertising for it would emphasise everyday aspects of NZ sheep farming, the aim being to remind retail customers of the natural characteristics of wool in contrast to synthetics.

The promotional material would be "gritty" rather than surreal as it might be for a high-fashion woollen garment, but ultimately the Elders/CCA strategy was about creating demand for a luxurious, sustainable product, he said.

NZ Romney and the Perendale Sheep Society will have their own modified versions of the Just Shorn brand.

The Perendale Society's link to Elders Primary Wool was agreed informally early this month and will offer growers a premium for their wool in return for putting their clip through Elders, provided it meets specifications.

Growers will not be charged a fee for their involvement but they would be "strongly encouraged" to join the Primary Wool Co-operative, a 50% owner of Elders Primary Wool.

Chapman said for Elders the advantage will be to form a relationship with select growers who might choose to use other Elders services.

Romney NZ already has a relationship with Elders through a Nepalese rug venture.

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