In a letter to levy payers, Deer Industry New Zealand (DINZ) chairman Andy Macfarlane encouraged farmers to consider the views from recent board discussions before making a decision on the future of deer in their farming operations.
“The past year has been a disappointing one for farmers who are focused on venison,” he said. “Consequently, many of you will be thinking carefully about what part deer will play in your farming mix in the year ahead.”
At the traditional low point in seasonal pricing, the South Island schedules are at about $6.25 a kilogram and the North Island a little less.
That is down about 5% from prices in February last year, which were down about 15% from 2012.
Macfarlane told farmers DINZ directors, executives and exporters had met a number of European venison customers over recent weeks.
“We’ve listened to their views on how we have come to be in the situation we’re in and also how they foresee progress over the coming years,” the letter said.
“In short, your board believes that the global financial crisis (GFC) took longer than widely thought to impact on international venison markets.”
A complicating factor arising from the GFC was the added volume of lower-priced, wild shot venison moving into the northern European supply chain, he said.
That movement increased stocks until recently and in the past two years prices had been reduced to shift that stock.
One positive indicator was that last year’s chilled season had been good, with no chilled product needing to be frozen at the end of the game season.
The DINZ board’s outlook on venison was cautiously optimistic, Macfarlane said.
The European economy was showing signs of emerging from recession, with positive gross domestic product growth.
North America was recovering rapidly from recession and venison exports to Canada and the United States were growing. The US was the largest single market for chilled venison, with stable, firm pricing.
“The past year has been a disappointing one for farmers who are focused on venison.”
Andy Macfarlane
Deer Industry New Zealand
“We remain hopeful that we will receive processing plant approvals and therefore market access to China, a potentially game-changing market.
“We note that venison is not a meat traditionally consumed in China. As such we believe its future may be in a lower-volume, high-priced market rather than in a good market for lower-value cuts.
“We intend to test that thinking as part of the Passion2Profit (P2P) project.”
Macfarlane said DINZ’s preparation of the P2P business plan was well advanced, with confidence P2P would add $2/kg eventually to venison profitability through increasing the price of NZ product by differentiation and through delivering the tools to help deer farmers produce more venison per kilogram of liveweight farmed.
The increased $2/kg venison price from P2P was on top of the natural market recovery the board foresaw, he said.
South Canterbury deer farmer and NZ Deer Farmers’ Association (DFA) chairman Kris Orange said planning decisions onfarm were tough and it was difficult to form an outlook for all industry with the options available.
“The DFA has been telling DINZ over the past 18 months that things are not rosy,” he said. “We welcome such information as Andy (Macfarlane) and his board are putting out.
“It is assurance they (DINZ) realise the current situation is not acceptable, saying it is as low as they expect it to get and without getting too optimistic, telling us there are some bright spots on the horizon.”
Farmers were assessing continually how deer fitted into their business, particularly in mixed operations.
A trial he had done in his operation compared finishing deer to dairy grazing and finishing deer had proven competitive, coming out 2c/kg ahead.
Farmers running hinds on hill country were competing with the beef cow and sheep and if finishing themselves, the deer would be out-performing the beef counterparts, he said.
“But yes, at the moment farmers are looking at options and the reality is that there will be some leave the industry, or retire, and new owners won’t take on the deer.
“Some will realise they have to get bigger or get out.
“This letter is telling us from beyond the farmgate that while we are at rock bottom of the cycle there is light at the end of the tunnel.
“We all know where we sit, and what we have to do and how we have to work together and that is how the industry as a whole will improve.”
