Deer farmers “locking in” venison returns

Deer farmers “locking in” venison returns

Friday, July 27, 2018

Venison marketers say they are getting good uptake from farmers for the supply contracts on offer through to mid-November in the North Island and through to February in the South Island.

Contract prices and conditions vary between companies and islands but they generally peak in October before easing off as autumn approaches.

Deer Industry NZ (DINZ) chief executive Dan Coup says the contracts are designed to encourage farmers to supply deer in the preferred weight ranges at times when they are needed by markets.

At a recent meeting of the industry’s market working group, he says marketers stressed the continued importance of the traditional chilled season, from August to November, when European demand peaks. Beyond that, he says they are looking for a spread of supply.

Coup is encouraged by reports that farmers are responding well to the contracts on offer. “It makes sense for them to lock-in what are very good prices. It’s also good for our marketers who can match supply with customer demand,” he says.

“Marketers, supported by DINZ, have started establishing a number of year-round markets in recent years. To retain these markets and to keep prices stable, marketers need certainty of supply.”

Silver Fern Farms deer procurement manager Malcolm Gourlie says the traditional spring price premium is now around 80c/kg versus $1.50/kg in years gone by.

“The European game season has always been important to the deer industry and I dare say, it always will be. It is important that we look after it,” he says.

He says the game season premium has tended to be more important to North Island farmers, especially in warmer areas. In these districts, he says deer come out of their winter slow-down and start putting on weight from around 20 August.

“For many of these farmers, supplying venison animals in spring suits their farming systems. They can get their yearling stags away and free-up quality feed for their hinds.”

When Silver Fern Farms released their first Global Retail Contract through to February, Gourlie says it was to give deer farmers confidence to grow their deer out.

“In the past, processors used to be supplied with a lot of young hinds and poorly-grown stags in spring for slaughter at around 40-45 kg carcase to capture the chilled schedule. These were well below the weights preferred by the market,” he says.

Alliance Group’s general manager livestock and shareholder services Heather Stacy says farmers welcome contracts because it guarantees them a minimum price and processing space.

“They’re a one-way bet for them really. The downside risk to pricing is mitigated and they have the option to take the schedule on the day if it is higher.”

She says the company’s current contract for supply goes through to the end of February and the upper weight range goes to 100 kg.

“The prices and the weight ranges reflect demand from new markets. Having worked hard to establish these markets, we want to be assured of supply. Our contracts are structured so that we get the supply of deer we want, in the weight ranges we want, at the time we want so we can meet the expectations of our customers,” Stacy says.

She says the rapid rise in venison prices during the last two seasons has tended to cloud the market fundamentals.

“These fundamentals have not changed. Prices and demand for venison will always peak in the spring chilled season. Outside spring, marketers need to match supply with customer demand in order to maximise farmer returns.”

A traditional game season meal of venison in a traditional German game restaurant. Photo: Hotel Hirsch