Brilliant velvet, weak venison prices

Deer Industry NZ
MEDIA RELEASE
16 January 2015

Brilliant velvet, weak venison prices

It has been a tough start to the year for many non-velvet deer farmers, with dry conditions and a disappointing venison schedule combining to put pressure on pastures, budgets and patience.
Deer Industry New Zealand (DINZ) chair and Mid Canterbury farm advisor Andy Macfarlane urged deer farmers to remain proactive in managing both the feed situation and their budgets.

“I’ve been revising a number of feed budgets over the last couple of weeks, and many deer farmers will be doing the same," he says.

“While high velvet prices have velvet producers smiling, we’ve also been keeping a close eye on the venison schedules and they don’t make pretty reading. It’s really disappointing to be in the $6.20 – $6.45/kg range again, as we were last year.

“Our take on the market is that there are no major supply or demand issues – indeed it is fundamentally more sound than it was a year ago, when a supply backlog had to be cleared.”
The venison industry is unique in New Zealand in its very heavy exposure to Continental markets.

“About 70 per cent of New Zealand venison is sold in Euros so the latest unforeseen round of European economic jitters and associated currency weakness has flowed through into venison schedules.”

The NZ dollar is today buying just under 67 Euro cents, up from about 60 cents this time last year and up about 5 cents in the last four weeks. The impact of this on the schedule over the past year is about 55 cents per kilo and over the past month about 32 cents, but this will vary depending each company’s European market exposure.

“The underlying market improvement is illustrated by the fact that schedules are on a par with last year despite the strong negative impact of a very weak Euro, relative to the NZD, USD and British Pound.

“The exchange rate movement over December also accounts for the difference between the current schedule and what several exporters had predicted in November last year.”

Macfarlane noted that while underlying demand in Europe was firm, with a satisfactory chilled sales season just completed, the impact of the Euro weakness demonstrated the industry’s urgent need to diversify markets.

“While we have good and loyal customers in Europe, it is critical for the industry to diversify its market risk. Our marketing companies have been selling increasing volumes outside of the Continent, and DINZ is supporting that diversification through the new market development component of our Passion2Profit strategy.

We believe that work will begin to bear fruit over the year ahead and, together with some hoped-for relief from both rain and currency, will mean a happier year ahead for deer farmers.

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