Premium Merino clip earns an extra $40m

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CHRISTCHURCH - Merino growers will bank about $80,000 more each this year, says their lobbyist and promotion agency, Merino New Zealand.

Spread over an estimated 500 big growers, it also puts the Merino industry further up the country's export industries - close to our burgeoning wine export trade.

Ninety per cent of the clip has been sold and Merino NZ's projections are that returns will be $40 million (57 per cent) more than last season.

Chief executive John Brakenridge said the figures were conservative.

"We tend to work on the fact that there are 700 Merino properties, and a large number of those are small holdings. There are probably fewer than 500 of what we would call serious Merino runs, so you can imagine what this means for the bigger properties' returns."

This month, only 1000 bales - 20 per cent of normal February levels - would be offered because farmers had taken advantage of good prices and sold as soon as the sheep were shorn.

Mr Brakenridge said there were several reasons for the positive pricing, including demand from Italy and Britain, and China's re-entry to the market. Chinese interest in higher-value wool and investment in spinning frames and weaving for the finer end of production was also helping.

"There is an upswing in their economy, and around the world people are going for lightweight, finer products. It used to be in the 22 to 23-micron range. Now they want 19 to 20-micron and finer fibre."

That was good news for producers because 85 per cent produced 20.5 micron fibre and finer. It also gave New Zealand an edge over Australia. Availability of finer wool in Australia had dropped, lifting prices on both sides of the Tasman.

Meat and Wool Economic Service director Rob Davison said prices were sustainable because of world growth.

NZ PAC's world-first product advancement and Merino centre in Ferrymead, conceived by Merino NZ, has just completed its research and development stage. It will be assessed in the next three weeks.

- NZPA