China a slow burner for venison marketers

China a slow burner for venison marketers

Thursday, December 19, 2019

A dramatic increase in world meat prices in response to demand from China is likely to have a more muted effect on venison prices.

An outbreak of African swine fever (ASF) has resulted in half of China’s pig herd being killed since August 2018, pushing Chinese pork prices and meat imports to record highs. According to Reuters, Chinese meat imports will peak in 2022, before declining as domestic production recovers and prices ease.   

Image:There is no established demand in China for venison. So our marketers have had to actively seek out and develop niches where they can build sales

Deer Industry NZ chief executive Innes Moffat says that unlike lamb, there is no established demand in China for venison. Nor is it a natural substitute for pork. So any benefit for deer farmers will result from meat prices world-wide being driven up by demand from China for pork, beef and lamb.

“On the positive side, this means that the niches for venison that our marketers are developing in China are likely to outlive the short-term effects of the ASF outbreak on demand for other meats,” he says.

“Sales of venison to China have grown steadily in the last three or four years, to the point where it is emerging as an important volume market,” he says.

“The venison marketing companies with access are being very active. Some high-end hotel restaurants now have premium venison cuts on their menus. For lower priced products like venison trim, partners in China are developing interesting products that may develop some promising sales. These include venison rolls for traditional hotpot cuisine, kofta-style meatballs and so on.

“DINZ will be working alongside NZ marketers and Chinese chefs in the coming year to work out where else venison could fit into Chinese culinary styles.”

Venison prices to farmers are currently averaging $8.50/kg, about $2/kg back on the exceptional December schedule last season, and above the previous 5-year average of $7.69/kg for the month.

Moffat says the price peak in 2018 was driven by a spike in demand from American petfood manufacturers for processing grades, which in turn helped fuel a cyclical peak in prices in the German game meat market. In both cases expected demand did not materialise, leading to unsold frozen stocks, and the current price correction.

“Adding to this unusual set of circumstances, the 2018 game season in northern Europe was very disappointing. It started late because of a very warm autumn, leading to poor sales and the carryover of frozen stocks into 2019. The 2019 game season has been better, with particularly good demand for chilled cuts going to restaurants. But we await more news from European customers about frozen retail sales. Many retailers will have reduced their orders this year after disappointing sales in 2018. It may still take some time for the carry-over of frozen stocks to clear.” 

He says European buyers will be visiting New Zealand marketing companies early in 2020, with their orders for next game season based very much on how well they did in 2019.

The NZ venison industry has always relied on the European market to buy frozen venison for consumption in their late autumn and winter. While this reliance has been reduced, this traditional demand still exerts a big influence on prices to farmers.

“That’s why marketers and DINZ put effort into developing new markets to encourage consumption venison all year round. Every kilo that goes into a Chinese hotpot, for example, is a kilo that doesn’t get stored frozen in Germany for sale in the traditional game season,” Moffat says.

While New Zealand’s total venison exports have reduced in the last decade and a greater proportion is going into non-seasonal markets like the United States the gap this has created in European game season demand has been filled partially by imports from Spain, Poland and elsewhere in Europe.

“But the net effect is that long-run venison prices to farmers are much higher than they were a decade ago,” Moffat says.

Within Europe, the industry has also made progress with selling premium Cervena venison as a summer grilling item into Belgium, the Netherlands and Germany. This remains an unusual time of the year for Europeans to eat venison, so the development of this niche will take time.