Ten South Island farmers committed 2800kg of 31-32 micron wool to the project.
The wool was processed into worsted yarn in New Zealand then made into high-quality jerseys in China.
The farmers are selling the jerseys through their Dunedin firm Agwool.
Founding member Ken Algie says the return was achieved in part because there are no wholesalers, retailers or traders taking margins.
The other element is product quality.
The jerseys sell for $184 but Algie says they could conceivably sell for $300 or more in a shop.
The move lifted the value of a 180kg bale of greasy wool from $650 to more than $7800.
Farmer and Agwool director Rick Cameron says when pricing the jerseys, for the first time in his farming career he had to consider the price he would seek for a product from his farm.
“If we don’t seek quality and restore wool to where it should be then we won’t get proud consumers happy to buy wool again.”
Cameron doesn’t claim this will be the savour of the crossbred wool industry but in a small way it is raising awareness and the potential of wool while also coming up with a new model to replace one that is not working.
“The principle is each product is a pool on its own and all the proceeds go back to the growers.”
The success of this pilot project has encouraged Agwool to expand the product range and it is looking at other wool garments such as socks and bush shirts, insulation using bellies and pieces and carpet.
It could also arrange the manufacturing of products to order.
Cameron says the Chinese jersey maker is enthused by the project and it could generate more orders and new products for crossbred wool.
That Agwool model is built on the frustrations at the parlous state of the wool industry of Cameron, a former Wool Board director, and Algie, who spent 40 years in wool sales and design.
Together they created Agwool, which is constructed on the model used in an earlier venture they established, Agmatch, an on-line selling platform.
Agmatch is a member only entity through which Algie negotiates buying deals for members for farm products as diverse as houses and nails and even veterinary-only items such as dry cow products.
Algie says the key to both ventures is to keep costs to a minimum. He is the only employee and instead of paying a commission on sales Agmatch’s 550 members pay an annual fee.
Cameron says Agmatch’s negotiation and collective clout with more than 2500 businesses saves him at least $5000 a year but in one deal a member saved $150,000 in fertiliser and another $20,000 in insurance.
Algie says they soon discovered the obstacles and costs were too great for the wool pilot to be contracted out and realised they had to do it themselves.
Knowledge accumulated from 40 years in the wool trade told him the degree returns were being eroded by margins at each step in the chain.
“To change that, you have got to take control and do it yourself and you have got to cut some of the fat out.”
Algie used his knowledge to oversee the process, which included designing the jersey, creating the brand and negotiating processing, shipping and manufacturing contracts.
The other key was quality.
Crossbred wool is seldom turned into worsted yarn, the highest quality yarn, but by keeping costs low it is possible to use it to produce competitively costed clothing and create garments with the look and feel of Merino fabric.
Farmers were invited to supply wool to strict specifications but they had to take on the risk and pay $68/kg up front for processing and testing.
For that they received a consignment of jerseys to sell but, just as importantly, the pilot highlighted issues, obstacles and processes they can avoid for future ventures.
The next product will be easier to process and the timelines shorter but Cameron believes the Agmatch model can be used for a variety of products and services from banking to selling fresh produce.
