While China takes 50% of NZ’s lamb and beef and almost all its mutton it takes only 10% of venison with the main markets being northern Europe and the United States.
South Korea is NZ’s biggest velvet market, followed closely by China.
Despite coronavirus deer processing plants are working at normal capacity with product flowing to major markets.
“But if there was a crisis of some sort in Germany or South Korea deer farmers would still be exposed,” Moffat said.
Marketers expect the recent volatility in world markets to continue beyond the impact of coronavirus.
“Living with this volatility is a challenge for farmers as well as marketers.
“Many drystock farmers opt to have a mix of livestock classes, including deer, on their farm.
“They’ve learned over the years that when one product is struggling another product is often doing well.”
Lamb and beef prices reached giddy heights before Christmas in response to Chinese demand for meats to replace pork lost to African swine fever.
The Chinese government had just put in place measures to reduce prices of imported meats when the coronavirus 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 US holding stocks of manufacturing grades that they paid high prices for in 2018.”
After a price spike markets often overshoot and companies holding expensive stocks might try to recoup some margin by holding off ordering in the hope of a lower price.
Moffat said it can take a year or two before high-priced stocks are cleared and a better market balance is achieved again.
The February venison price to farmers, based on the published schedules for a 60kg stag, was $8.09 a kilogram, back about $1.50 on February 2019.
While still the third-highest price on record for this time of year no-one is happy with where prices have gone, he said.
The average value of venison exported from NZ in the last months of 2019 was down about 15% on 2018, which was reflected in the prices paid to farmers.
Demand for chilled venison continued to grow in North America and in continental Europe demand for game meats appears to be relatively stable, albeit 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 to add value to frozen venison including novel retail applications and more portion-controlled items.”
With access to China problematic marketers are looking to further expand demand in the US, Moffat said.
Manufacturing grades of venison were once all destined for Europe but in recent years small-goods manufacturers and pet food companies in North America have been taking useful quantities as was China in the months leading up to the coronavirus outbreak.
