To combat the drift away from wool production in Australia, European luxury fabric and suit makers have set up Wool Excellence Clubs, rewarding what they say are the very best Australian wool producers with top prices.

Key points: The club set up by Italian fabric maker Vitale Barberis has 23 members

The club set up by Italian fabric maker Vitale Barberis has 23 members Vitale Barberis prefer wool from farms that do not mules

Vitale Barberis prefer wool from farms that do not mules Australian Wool Network is also offering some super fine producers, contracts and premium prices to supply it with wool

There are only 23 members in the club set up by Italian fabric maker Vitale Barberis and they have to meet strict conditions — their wool has to be from Saxon Merinos and have the right elasticity and density.

The Tasmanian southern Midlands property of Miena, owned by 91-year-old patriarch Des Manning, is one of the club's exclusive members.

"Now [that] Vitale Barberis is offering premiums for us to sell our wool, it's given us a lot more of a guarantee that we're going to be able to keep doing what we are doing," said one of the farm's current managers, Mr Manning's daughter Marie Boadle.

Australian sheep numbers, particularly those of the superfine variety, have fallen sharply in the past 50 years — from a high of 180 million in 1970 to a near record low of about 70 million today.

Many have been lured away from wool farming because of changing demands, the decline in profitability of wool, the increase in production of other fibres and good lamb, mutton and beef prices.

Mannings more 'confident' after wool prize

The contract with Vitale Barberis is a more lucrative proposition than selling at the weekly Melbourne Wool Auction, with the Italian company offering 20 to 30 per cent higher prices.

Marie Boadle classes super fine Merino wool. ( ABC News: David Fraser )

"Our sheep are mainly super fine Saxon Merinos — they've been bred over quite a long time because they've got a good frame and they do very well in this country," Mrs Boadle said.

"They have beautiful wool that is specifically what the Italians like for their suiting material. So, it's a very dense, high elasticity, very bright and white.

"We don't have a lot of vegetable matter, it's very clean country, so if we have a good year we can produce some beautiful very high quality wool."

The company prefer wool from farms that do not mules — the controversial practice where the skin from the sheep's backside is cut away to prevent flystrike.

"We have never mulesed here, so we actually do get a premium price for not doing that, that's what the buyers, the consumers [at] the other end of the chain are wanting, are demanding some of them," Mrs Boadle said.

The Mannings' three-year contract with Vitale Barberis comes off the back of winning the Italian company's Wool Excellence Award late last year for outstanding wool clip of the 2014-15 season.

"I think we are a lot more confident now than we were before we won our prize. I think the Italians want to make sure they have a constant supply of high quality Saxon Merino type wool," Mrs Boadle said.

The Italians have been buying our product year in and year out

The ABC is shown the AWN's factory knitting machine. ( ABC News: Fiona Breen )

Another Italian fabric and clothes manufacturer, Reda, is also worried about the shrinking super fine clip in Australia and has set up its own exclusive growers club with just 20 members — including the Beveridges in the beautiful Victoria Valley in Western Victoria.

The Italian's manufacturer's select few are also given prices for their wool clips, which are up to 30 per cent above the market price.

Third generation wool grower Alister Beveridge has just signed a new three year deal with the company.

"What they are looking for is the traditional superfine look, so its the crimp definition … it can't be cut too long … their sweet spot is 17 micron," Mr Beveridge said.

"The Italians have been buying our product, the majority of it, year in and year out for years.

"When Reda brought out these contracts they'd already been buying our wool in the auction system, that's why they approached us, to secure it because they are worried about the longevity of the product.

Contract with Reda keeps the Beveridges in the wool game

Allister Beveridge assists with drafting sheep on his property in Victoria Valley. ( ABC News: Fiona Breen )

With 10,000 merino sheep on 2000 hectares, Mr Beveridge is trying to breed a bigger framed merino more suitable for meat as well as wool.

"Like any enterprise you are trying to work on genetics and fine turning," Mr Beveridge said.

"I suppose that one of the main things for us, if we are trying to get that Italian-type stuff, you are trying to balance frame size carcass traits and obviously, wool cut is one of the main things, while trying not to compromise that style type too much.

"It's a challenge."

The contract with Reda keeps the Beveridges in the wool game, but it is costly and involves harder work to meet their strict conditions.

Reda, like Vitale Barberis, also requires wool from non mulesed sheep for some fabrics and for others they accept wool from mulesed sheep as long as pain relief is used, which is what the Beveridges do.

"They are at a premium over the market, it's not huge but it's certainly a step in the right direction," Mr Beveridge said.

"With a bit of luck it can be worked on over time because they've got to offer the incentive for people like us to remain producing it as opposed to an animal that just cuts more with a bigger bodily type."

Local demand for super fine producers

Ponchos made from super fine wool just are being made inside the Australian Wool Network's fabric factory. ( ABC News: Fiona Breen )

Local company Australian Wool Network is also offering some super fine producers, contracts and premium prices to supply it with wool.

The wool broker launched into manufacturing in 2014 and now it is expanding into a new factory on the outskirts of Melbourne and absorbing another Australian business, Hedrena, next to skin wool products.

"The Australian Wool Network owns a very large brokerage arm. It's serviced by clients and during my entire life we've talked to wool growers about where their wool comes from, where its going and what its going into," the Network's managing director John Colley said.

"It always seems to me we need to add value to wool growers and the only way to do that is to invest in manufacturing and retail."

The company has a group of regional superfine wool growers from kangaroo island sending its clip.

Other regional wool growing groups are due to come on board in the next six to eight months.

Watch the full story on Landline at noon this Sunday on ABC TV.