Good prices, strong demand and low stock boded well for solid and sustainable markets and returns across both the venison and velvet sectors, Deer Industry New Zealand (DINZ) Passion 2 Profit (P2P) manager Innes Moffatt said.
The strong decline in hind slaughter was pleasing to note.
“Hind slaughter down 25% in the first six months of this year is a strong vote of confidence from farmers increasing their deer herds,” Moffatt said.
Venison export receipts were up on last year, largely because more product was sold chilled to markets such as the United States and China and less was traded as a frozen commodity.
The NZ dollar sitting below the Euro for most of the past 12 months had also helped increase export returns.
The benefits of new models for farmer engagement were emerging with 20 well established Advance Parties working very successfully from Southland to Northland, he said.
“The success is such that we are setting up three more.”
The Advance Parties programme run by DINZ was based on farmers learning from farmers.
The concept was an innovative approach to encourage the uptake of new technology focused on performance and management systems aimed at improving profitability.
Given the positive results being reported the programme remained strong and integral to the industry’s sustainable future.
On the market front DINZ and exporters were working hard to increase returns from the whole carcase by increasing demand for new cuts.
Venison production to April this year was down 20% on the corresponding period last year, driven by the herd rebuilding, but market development activity around the sale of more venison outside the traditional European markets was returning encouraging results.
DINZ was supporting company initiatives to reduce the reliance on the spring peak by growing sales in non-seasonal markets and in new markets promoting value-added items.
Food service promotion, rather than retail, was aimed at chefs.
“Where the chef was enthusiastic about it, the passion filtered through to diners,” Moffatt said.
“Where venison is just on the menu it was seen as just a traditional winter eating item.
“So it’s about using common messages to the food service sector about venison being an ideal meat for outdoor summer eating. That’s been the real push in the first year of trial,” Moffatt said.
Based on the first-year results the companies, Alliance, First Light Foods and Silver Fern Farms, supported by Mountain River Processing and Duncan NZ, were repeating the promotion this European summer.
While the increase in volume of venison sold through the Cervena promotion was significant, it was not yet enough to increase farmgate returns.
“Hind slaughter down 25% in the first six months of this year is a strong vote of confidence from farmers increasing their deer herds.”
Innes Moffatt
DINZ
“But as part of the overall longer term plan the trial results are substantial towards a manageable trade over the summer months,” Moffatt said.
A second branded Cervena trial market was planned for overseas but where that would be had not yet been decided.
It was not expected that Britain’s exit from the European Union would affect venison markets.
“Venison is not subjected to tariff conditions so it’s not expected there will be any change of access conditions into EU or the United Kingdom,” Moffatt said.
“Obviously there will be some changes to meat access for some other products and we will be observing that.”
The industry’s short-term concern was currency and in the longer-term any wider economic impact from actions that might be taken as a result of Brexit.
“But the EU is still our biggest market and with 500 million reasonably affluent people there is no plan to abandon any markets, particularly Germany, one of the strongest economies in the world.
“We are fortunate to be aligned with Germany and its very solid economy and while we seek new markets and trade opportunities, we will always respect and look after the good we have got,” Moffatt said.
With the hind kill down 25%, the average stag venison schedule stood at $7.55 a kilogram, compared to $6.67 a year ago.
Moffat said further currency appreciation could knock the top off the spring schedule, despite the impact of the reduction in supply.
Frozen venison stocks in the EU market were cleared in 2015, stimulating the higher prices received last year.
A big part of the challenge was the widening price gap between venison and other premium proteins.
South African ostrich, a game season substitute for venison, had regained access to Europe.
While there was clearly a limit to what customers were willing to pay, culinary fashion might help.
DINZ consultant chef Graham Brown said there was a growing trend for chefs to incorporate cuts from the shoulder, neck and brisket, even offals such as hearts, livers, sweetbreads and tongues, into their menus.
“Braised and slow-cooked meats are very fashionable and they provide chefs with a challenge and a point of difference,” Brown said.
Meanwhile, with venison supply falling and velvet supply increasing, it was important to keep venison processors and velvet buyers well-informed on production intentions in the new season.
While individual farmers would make decisions based on what they believed was best for their farming businesses, exporters would benefit from knowing how much venison and velvet was coming down the pipeline and when it was likely to arrive, DINZ chief executive Dan Coup said.
“This will give exporters the best chance of managing supply to customers and maintaining market stability.”
Velvet remained steady as the developing story for NZ velvet in mainland China continued.
NZ velvet in China had a record year with health product manufacturers, helped by a reduction in volume from other global suppliers, improving demand for NZ velvet.
“But still, before deciding when to cut and when to kill, it would pay to ask your buyers how they see world markets,” Coup said.
