The New Zealand Sheep Industry Transformation Project (NZSTX)

Key facts

chef preparing SILERE alpine origin merino meat

Programme start: September 2010
Programme end: June 2017
PGP funding: $16.8 million
Industry funding: $16.8 million
Crown funding paid out: $16.47 million
Estimated economic benefits to NZ: $250 million a year by 2025
Commercial partners: The New Zealand Merino Company Ltd

Programme outcomes

Expanded market opportunities for fine and mid-micron wool growers based on branded contracts. For example, New Zealand Merino and Reda Successori released a $45 million contract for superfine merino wool, which is used in Allbirds wool shoes.
Commercialisation of SILERE (a differentiated brand of merino meat) in a joint venture, initially with Silver Fern Farms and then Alliance Group.
Established the Southern Cross nucleus breeding flock to develop a new fine-wool sheep genotype (with improved carcass, reproduction and animal health). In early trials, Southern Cross lambs outperformed traditional strong wool breeds in grower returns.
Developed tools to help farmers address barriers to production of fine and mid-micron wool. For example, the FeetFirst project successfully developed a genomic breeding value (gBV) for predicting resistance to footrot in fine-wool sheep.

Background to the programme

Allbirds runners made with Merino wool — Superfine New Zealand merino wool is used in Allbirds Wool Runners.

Prior to NZSTX, profitability in the New Zealand sheep sector had been declining with:

an over-reliance on volatile commodity markets
a lack of product differentiation.

This had resulted in a significant drop in the number of sheep farms, as farmers moved to other land uses. Despite this trend, the fine-wool sector was performing relatively well and there was a need to increase production to meet future market demand.

The NZSTX solution

NZSTX aimed to shift New Zealand sheep production to 'fit-for-market' fine-wool sheep production by:

removing barriers to increasing fine-wool sheep production
making connections throughout the value chain, from producer to consumer
using product differentiation and direct supply contracts to get better grower returns.