Venison in mix spreads the risk

Venison in mix spreads the risk

Thursday, February 13, 2020

Deer Industry NZ chief executive Innes Moffat says venison sales have not been seriously affected by the disruption to the Chinese market caused by the novel corona virus outbreak. Deer processing plants are working at normal capacity for this time of the year, with product flowing to major markets.

“China takes 50 per cent of New Zealand’s lamb and beef, nearly all of our mutton, but only 10 per cent of our venison. Our main venison markets are northern Europe and the United States. South Korea is our biggest velvet market, followed closely by China,” he says.

“Over many years, the deer industry has actively sought to diversify its markets in order to reduce the impact of disruption to any one market. We’ve done pretty well, but if there was a crisis of some sort in Germany or South Korea, deer farmers would still be exposed.’

Moffat says marketers expect recent volatility in world markets to continue beyond the impact of the corona virus. Living with this volatility is a challenge for farmers and well as marketers.

“Many drystock farmers opt to have a mix of livestock classes, including deer, on their farm. They’ve learnt over the years that when one product is struggling, another product is often doing well.”

He says prices for lamb and beef reached giddy heights before Christmas in response to demand from China for meats to replace pork production lost to African swine fever. The Chinese government had just put in place measures to reduce prices of imported meats when the novel corona virus struck.

“Lamb and beef prices came off those highs in the last month. We saw a similar venison price spike in 2018 when demand for trim from pet food companies peaked. We’re still in the price correction phase for that, with some distributors in Europe and pet food manufacturers in the United States holding stock of manufacturing grades that they paid high prices for in 2018,” Moffat says.

“After a price spike markets often over-shoot.  Companies holding expensive stocks might try to recoup some margin by holding off ordering in the hope of a lower price. It can take a year or two before high-priced stocks are cleared and a better market balance is achieved again.”

The venison price to farmers, based on the published schedules for 60 kg stag, now stands at $8.09 a kilogram, back about $1.50 on February 2019. It’s nevertheless the third highest price on record for this time of the year.

But Moffat says that no-one is happy with where prices have gone to this year. The average value of venison exported from New Zealand in the last months of 2019 was down about 15 per cent on 2018, which was reflected in the prices paid to farmers.

Prices on-farm keep rising and farmers and marketers need to be rewarded for the additional efforts being made to meet consumer expectations, he says.

Demand for chilled venison is continuing to grow in North America. In continental Europe, demand for game meats appears to be relatively stable, but with continued signs of the change in market preferences away from frozen products, in favour of fresh.

“Our marketers are working with some very savvy partners in Europe and they are developing different presentations to add value to frozen venison including novel retail applications and more portion controlled items.”

Manufacturing grades of venison were once all destined for Europe, but in recent years small goods manufacturers as well as pet food companies in North America have been taking useful quantities, as was China in the months leading up to the corona virus outbreak.

With access to China problematic at the moment, marketers are looking to further expand demand in the United States.