New Zealand production for July was down 37% compared to July 2015 and reports indicate the decline through August might be greater.
The national deer kill this year was down 25% on last season leaving exporters challenged by the lack of product to market, with many importers left without.
The shortage of product had enabled exporters to ask higher prices in the market but they remained wary of pushing prices too high and seeing venison priced off the menu, Deer Industry NZ (DINZ) Passion2Profit manager Innes Moffat said.
At the same time the shortage of supply was keeping significant procurement pressure on farmgate prices.
Schedules were sitting at $8.10-$8.30/kg, well above the $7.40 of this time last year.
Exports to Germany had fallen and importers were warning that prices were too high and unreliable year-round supply could risk venison falling off the menu.
Moffat said NZ exporters had been selling to diversify away from the German market for many years and by definition NZ would lose market share.
The industry had signalled to all venison importers there would be a reduction in volumes because of hind retention.
Farmers would be maintaining that policy this season so less venison would be available.
But the retention would pay off with a gradual increase in the national deer herd and more venison available for export in the next two years.
As production began to slowly increase it should not have much of a dampening effect on prices, Moffat said.
“Exporters have created higher-paying markets with less seasonal reliance and price volatility.”
Innes Moffat
DINZ
“Clearly, NZ has to manage the increased volumes we will have in 18 months’ time but the exporters have created higher-paying markets with less seasonal reliance and price volatility.”
Those markets included the United States, Britain and some Asian markets.
Venison price was driven by circumstances beyond the control of NZ and much of that volatility in the trading product was driven by European buyers.
“Nobody wanted to lose customers and it’s not much fun for long time venison buyers to not get what they want but exporters were looking to sell their product at the highest price.”
Moffatt said there were buyers prepared to pay the higher price and while some indicated it was too high, the lack of product left buyers with few options.
In saying that, frozen stock in Europe and the chilled export now was not yet eaten so the test of the higher price was yet to come, he said.
The long term was about avoiding the boom and bust that had traditionally characterised NZ meat exports.
DINZ’s latest venison production and exports update showed production for the 12 months ending June 30 was 18,644 tonnes, down 13.8% on last year.
Total volume of venison exports for the 12 months ending June 30 was down 8.6% but currency conditions meant value increased by 4.8%.
Chilled exports had grown 4% with value up 16% or $8 million, making up 18% of total venison exports.
Sales into the US continued to perform positively over the past 12 months with volume up 13.5% and value up 25.9%.
On the chilled export front, US exports were up 13% and 29% in value. Germany was also showing a significant increase with chilled volumes up 22%.
