Wool Grower Holdings director Mark Shadbolt said last week that if there was no resolution by the end of this month, his company intended finalising its prospectus which it would release in the coming months.
A merger or some other working relationship between the two farmer-owned wool co-operatives, Wool Grower Holdings and Primary Wool Co-operative, was being brokered by former Meat and Wool New Zealand chairman Jeff Grant, but the sticking point appears to be the motives of their respective commercial partners.
Mr Shadbolt said Wool Grower Holding's (WGH) business partner, Wool Partners International (WPI), was set up by growers so they could have control and ownership of a marketing company.
WPI is jointly owned by WGH and PGG Wrightson.
Mr Shadbolt said PGG Wrightson had agreed to reduce its shareholding should growers want it to.
The forthcoming prospectus would be based on growers owning WPI outright, Mr Shadbolt said.
Primary Wool Co-operative has a joint venture with Elders, Elders Primary Wool, but Mr Shadbolt said the point of conflict was that Elders was using the relationship with growers to procure wool and sell other farm products and services and there appeared little likelihood of growers owning that wool business outright.
"This is a fundamental difference and they [Elders] have said they don't see grower ownership and control as important."
But Primary Wool's chairman Bay de Latour said, when approached, that such remarks were unhelpful.
He was still keen for the co-operatives to merge, but said such comments made it difficult to maintain a working relationship.
Mr Shadbolt told about 60 growers in Lawrence that both his company and Primary Wool Co-operative were keen to form a single grower co-operative that would own the Just Shorn, Wools of New Zealand and Laneve brands.
While he supported work Elders was doing in the market, Mr Shadbolt said the two groups could not continue talking forever.
If there was no progress in the two co-operatives joining forces by the end of May, he said WGH would start finalising the details of its prospectus.
His opinion was that the chance of the deal being completed was finely poised.
Mr Shadbolt told South Otago wool growers the future of the industry was in their hands.
He was part of a group of 19 Banks Peninsula wool growers who have formed Banks Peninsula Farms, a company aiming to market their own wool.
Mr Shadbolt has said growers needed at least $6 a kg, a figure wool manufacturers told him could and would be paid, but was not paid because of the fragmented way wool was sold.
"We were told to go home and fix up supply issues.
If we do unify, we will quickly see this industry turn around," he said.
Banks Peninsula Farms was working with WPI which has said it would take three to five years for the investment in marketing to pay dividends.
But Mr Shadbolt said the way farmers sold their wool would determine how quickly or indeed if the wool industry turned itself around.
WPI chief executive Iain Abercrombie presented figures which showed more than half the country's strong wool clip was supplied to private wool merchants and the balance was sold through the auction.
Mr Abercrombie said WPI would soon release details of new selling options which will include the auction, contracted wool under its Laneve brand which met quality control standards and another, yet-to-be-released option but which would allow growers to spread their exposure to risk over time.