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Background to the NZSTX project

Over decades, New Zealand has faced declining profitability in the strong wool industry and uncertainty for fine wool growers. To help tackle this, the New Zealand Sheep Industry Transformation Project (NZSTX) was launched in September 2010.

NZSTX was a 7-year Primary Growth Partnership (PGP) programme between New Zealand Merino and the Ministry for Primary Industries (MPI).  The programme wrapped up in 2018. 

NZSTX was the first of its kind. It was a significant government and industry innovation partnership with its sights on boosting outcomes for New Zealand’s fine and mid-micron sheep wool industry.

Find out more about NZSTX

NZSTX had bold aspirations

The programme partners wanted to take proactive steps towards:

  • addressing the issues faced by the industry
  • building both a foundation for growth, and long-term resilience.

This programme had bold aspirations. Its aim was to increase the production of sheep with attributes driven by the market. In doing so, it aimed to shift the balance between New Zealand strong and fine wool production towards the latter. It also wanted to generate better grower returns for fibre, meat, and other products.

Evaluation reviewed NZSTX achievements

As part of its governance process for PGP programmes, MPI commissioned the independent evaluation. The objectives of the evaluation were to determine:

  • the programme’s achievements
  • what its legacy was likely to be
  • any learnings.

NZSTX evaluation report [PDF, 988 KB]

What the evaluation found

Overall, the independent evaluation concluded that NZSTX:

  • will have a positive effect on New Zealand’s fine wool industry
  • has helped the industry to become more economically sustainable
  • delivered a number of important wins and successes.  These included growing demand for fine wool and premium-branded merino meat products, enabling better animal health outcomes and delivering better returns for New Zealand farmers.

It also found that some of the positive, longer-term outcomes from the programme will be delivered, but later than originally expected.

Recommendations from the NZSTX evaluation

The independent evaluation made some recommendations, which MPI and New Zealand Merino (NZM) have reviewed. MPI and NZM have implemented relevant recommendations into another PGP programme – W3: Wool Unleashed.  W3: Wool Unleashed is a programme between New Zealand Merino and MPI focusing on the strong wool industry.

Find out about W3: Wool Unleashed

The partners are optimistic the foundations laid by NZSTX will continue to bear good outcomes for the fine wool industry and support its long term growth and sustainability. This is already being seen with a significant volume increase in wool since the programme ended.

MPI will continue to monitor progress towards meeting NZSTX’s longer-term outcomes. 

NZSTX achievement examples noted by the independent evaluation

  • NZSTX has been instrumental in growing the number and value of contracts to supply New Zealand fine wool at premium prices, worth tens of millions of dollars. 
  • Over the 7 years of the programme, contracts have delivered average premiums for wool farmers of $2.53/kg extra over auction for New Zealand growers.
  • NZSTX has delivered important genetic outcomes, such as the development of a genomic breeding value (gBV) for foot rot resistance in fine wool sheep.  The gBV for foot rot resistance means farmers can reliably select rams based on their susceptibility to foot rot.  This is a big step forward towards reducing this condition. Foot rot is estimated to cost New Zealand fine wool farmers millions of dollars every year.
  • NZSTX has established nucleus breeding flocks focused on improving both animal health and productivity traits for the industry. These are enabling more resilient and fit for market fine wool sheep.
  • NZSTX helped to develop the ZQ brand to grow demand in fine wool. The evaluation concluded ZQ is “valued by the market”, and has “given New Zealand an edge in its global marketing of premium-priced fine wool”.
  • NZSTX has been “pivotal in pioneering premium-branded merino meat products”. This has created a new market for New Zealand. The evaluation also concluded that the future for merino meat is “looking good with reasonable prospects for further growth in sales.”
  • Demand for Silere merino meat developed under NZSTX is showing promising growth. Orders in one major market are expected to triple in the next season.
  • NZSTX has provided the wider primary industries (via the Te Hono Movement) with access to practical examples, case studies, and experience. These demonstrate the benefits possible from taking customer-centric approaches towards the production, marketing, and sale of New Zealand’s primary products.

Main recommendations made in the NZSTX evaluation

The independent evaluation identified some areas for improvement.  These include:

  • ensuring better separation between the programme’s governance and management
  • improving metrics to give better visibility of programme progress
  • ensuring relevant expertise on programme steering groups
  • conducting more assessment and due diligence on the nature of the challenges and risks associated with delivering the growth in demand and supply proposed by NZSTX
  • ensuring better documentation of assumptions and calculations.

The evaluation concluded that NZSTX encountered challenges in the extension and adoption workstream of the programme. It was not able to get the traction necessary to advance this as far as intended.

New Zealand Merino has since established the capacity to tackle this. It has developed, and is wholly funding, a new programme that focuses on achieving wider adoption of fine wool farming systems by coarse wool farmers. 

The aim is to enable farmers to fulfil the demand created by the programme (fine wool performs much better in the market than coarse wool). 

New Zealand Merino has recruited additional staff for this new programme, which will provide useful support for the extension part of the W3: Wool Unleashed programme.

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