Apr 20, 2023
This season’s deer weaner market suggests prices are falling between $4.50-$5.20/kg carcase weight. These are “more than competitive” with current sheep returns and heading towards the $5.50/kg or more farm consultant Wayne Allan had calculated breeders need to out-compete other land uses.
Independent modelling carried out by Allan for Deer Industry NZ (DINZ) in March 2022 provided some benchmarking around what comparative returns were required for venison farming operations.
At the time, he calculated weaner prices needed to be between $5.30-$5.50/kg to compete with the, then, thriving sheep industry. However, with this year’s 20 percent drop in sheep returns, the competitive deer weaner price has correspondingly dropped to $4.00-$4.50/kg.
Having spoken with a number of deer finishers, who had already bought weaners at on-farm sales through livestock agents, Allan reported the early season prices were sitting between $4.50-$5.20/kg, up around $0.50-0.70/kg on last season, which means “deer breeders have made some gains.”
These levels have also been reflected “perhaps with a higher top end”, in the first sale of around 500 weaners at Mt Arrowsmith, mid-Canterbury in late March.
“[The prices] are now more than competitive with sheep farmers and hopefully heading towards the $5.50/kg or more they need to thrive, though the total venison pie will need to grow in value to achieve this,” says Allan.
Deer finishers need to make their margins
Deer finishing operations need to make their margins, Allan noted. All of the competing land-use options – lamb and beef finishing, dairy grazing and velvet operations – often generate well over 30c/kg dry matter (DM) and over 40c/kg DM in some instances.In order to compete with other finishing options at 30c/kg DM, Allan’s figures show a return of around $250 per weaner was required by the finisher.
Over the past year, some finishers would have managed to achieve the $250/head margin, but it was largely due to the post-chilled prices holding up better than forecast, says Allan.
“Given the weak gallery at one of the recent on-farm auctions, perhaps other finishers did not come close to $250/head margins and have decided there is less risk in pursuing other options.”
Venison is heading in the right direction
The aim of Allan’s modelling in March 2022 was to see what returns were required to achieve parity with other enterprises and then what would be required for industry to thrive.
At the time, his figures suggested a season average of around $9.50-$10.25/kg carcase weight was needed for venison breeding and finishing to be competitive with alternative land-use options.
Venison is heading in the right direction, Allan believes: “But it is not there yet. Revenue has improved over the past 12 months and returns for many are now comparable with other land-use options. While we are on a pathway to better returns, we are still currently some way from returns that would move the industry from competitive to thriving,” he says.