Analyst Intel

23 July 2021

PULSE | Low farmer confidence drives a high venison kill

Sarah Friel 

Deer farmers’ confidence has been damaged by market uncertainty.

While there are positive indications from export markets, which support glimmers of optimism in the industry, processors are still proceeding with caution regarding spring contracts.

Last week, the New Zealand stag farm gate price was $5.57/kg, about $3/kg below the five-year average. The market is $5.65/kg below this time in 2018, when the farm gate operated at $11.20/kg.

Unfortunately, Deer Industry NZ (DINZ) are not expecting a big turnaround for prices this September, when the market normally peaks for the traditional game season. Indications from processors suggest this season’s market peak will not be much different to year-ago levels.

Last year, the North Island farm gate peaked at $6.20/kg in September, while the South Island price tapped out at $6.65/kg in October. Limited volume contracts offered more to suppliers but were only slightly above $7/kg. For reference, the NZ five-year average peak for the spring market is $9.70/kg.

Despite poor returns in 2020, there were some encouraging signs of demand.

Over 4400 tonnes of venison left NZ shores over August-November last year, the highest export total for that period in the past five years. This success is encouraging processors to increase capacity in 2021 chilled contracts to meet demand. 

However, it’s worth remembering that restaurant shutdowns and rolling lockdowns throughout Europe severely impacted higher-value chilled export volumes last year. Chilled venison only made up 24% of 2020 exports, the lowest contribution in the past five years. Paired with a five-year-low average export value of $12.34/kg, it's not surprising that the farm gate has stagnated.

Farmers are insulated from the downfall of venison prices by finishing lambs or cattle alongside deer. Unlike venison prices, lamb farm gate prices are at a five-year high for this time of year, with a national indicator of $7.80/kg.

Prime and bull prices are on par with the five-year average, with instances of over $6/kg being paid in the North Island. Lamb and beef farm gate prices are supported by year-to-date average export values being 69c/kg and 14c/kg above average respectively.

While stronger farm gate prices for other species are a bonus for farmers committed to venison farming, it is leading some farmers to forgo deer to increase beef or lamb production. This is evident in higher-than-average hind kill numbers.

In the year-to June, 100,563 hinds were processed. The South Island contributed 75% of this total and overall, slaughter is 8280 above year-ago levels and 17.7% above the five-year average. 

This hefty kill is concerning some processors and exporters, especially given the efforts being made to establish venison in new markets. 

In the past three years, exports have become more evenly distributed between Europe and the US, and China has entered the mix with a taste for venison. This, paired with marketing campaigns aimed at home cooks, is increasing venison’s export profile and demand, meaning we could find ourselves short-stocked if farmers continue to liquidate stock.

F Mangapurakau Station 069 1