The spring market for venison is not going to generate excitement this year.
While prices will peak, reflecting a small lift in chilled demand, the peak will be well below the five-year average of $9.60/kg as key markets grapple with covid-19 implications.
So far it is looking like any contracts will be in the low to mid $7/kg range in September, a lift of $1-$1.40/kg on current levels.
Unfortunately, despite any spike in farmgate prices through to September, the price farmers get for venison will quickly ease once the chance for ocean freight closes in time for the game season in Europe.
It is led by the airfreight cost being very high compared to usual this season, not making it a viable option. As a result, through October it is likely there will be strong easing in the farmgate venison prices. How far prices will fall is yet to be seen.
However, given the starting point was a lot lower than usual, any downside will push prices well below what most have farmed to in recent years.
The fortunate position is that Europe, a main destination for New Zealand venison, is starting to look positive in controlling the spread of covid-19 and getting back to normal. However, the risk of a second wave of covid-19, especially through the key European game season, will be on the minds of venison exporters.
The United States is an important market through its winter and our summer when venison consumption in restaurants is higher. Venison has a high reliance on the restaurant trade but the success of this market relies on strong economic activity. Therefore, any recession is problematic for the restaurant trade and venison.
Fortunately, China is allowing imports of NZ farmed venison, which is a win for the industry this year after the concern of the potential ban. However, the re-uptake of venison imports to China is said to be low because of very strict border controls on imported foods amid concerns covid-19 could be food-borne.
A more positive note is with the decrease in the venison prices pet food demand is improving. Pet food sales have not been affected by covid-19, an encouraging sign that market might provide some continued demand through the months ahead.
For farmers it will result in some not-so-impressive returns this season.
There is no easy way to avoid it so we must face the reality of the situation. A very tough summer and autumn is likely to have had an impact on deer growth rates in some parts of the country, pushing deer later to reach target weights. However, there is still demand for product and as restaurant activity picks up demand will pick up. Once that happens the venison price will, hopefully, improve to a profitable position for farmers.