Less venison is more

Glenn Tyrrell, Duncan NZ
Glenn Tyrrell, Duncan NZ

Venison volumes have fallen, but that isn’t necessarily a bad thing as the industry starts a herd rebuilding phase, the effects of drought lessen and actions to reposition New Zealand venison take hold.

In line with lower slaughter numbers last year, statistics from Deer Industry NZ (DINZ) show that in the 12 months to end December 2016 volumes of venison exports fell by 16 percent on the previous year, while total value dropped 11 percent. Positively, however, chilled markets continued to grow as a percentage of total exports. Chilled venison volume, which accounted for 19 percent of the total shipped, dropped only by six percent over the same period.

On another bright note, the tighter supply and good demand in key markets also meant venison prices increased, averaging $12,650 per tonne over the year, a six percent increase over the year ending December 2015 (see table). At December 2016, chilled venison had reached an average of $23,000/tonne over the year, $500/tonne more than the 2015 average.

Average $/tonne, top 10 New Zealand venison markets by value (12 months to end December 2016)
2015 2016 % change
Germany  $11,627  $13,830 16%
USA  $11,085  $10,711 -3%
Belgium  $15,081  $16,970 11%
Netherlands  $19,348  $21,154 9%
UK  $9,694  $10,059 4%
Switzerland  $16,097  $18,458 13%
Finland  $6,861  $7,479 8%
France  $15,366  $15,375 0%
Sweden  $9,134  $10,561 14%
Canada  $10,245  $9,736 -5%
Others  $10,265  $10,285 0%
Total  $12,046  $12,647 5%

Source: Deer Industry NZ

Slaughter statistics record a reduction in venison production so far this season, with 17 percent fewer deer (100,052 head) going through the works in October to December – the first quarter (Q1) of this season – than Q1 2016.

As expected, exporters note that the lower supplies and higher prices are having an effect on customers with European retail processing companies unable to purchase the quantities of venison they have historically, or choosing not to pay the higher prices for New Zealand venison this year.

“This will have a significant impact on the supply of further processed venison items for European retailers,” comments Duncan NZ’s general manager marketing Glenn Tyrrell, who is a member of the deer industry Marketing Working Group (MWG). Tyrrell notes it may prove challenging to recover these accounts when production levels increase if price levels are maintained.

So, how are venison exporters and marketers managing the period of low supply to the New Zealand industry’s long-term benefit?

With market conditions firm in Europe and North America, priority is being given to supply customers whose vision for marketing New Zealand venison matches the New Zealand industry’s, says Tyrrell, which means reductions to some traditional market sectors.

Germany remains highly important for New Zealand venison, but venison marketers’ strategies are to diversify away from reliance on the seasonal European game market and continue to re-position New Zealand venison in new and promising market niches, he explains. This means some of Europe’s traditional markets may see less New Zealand venison even when volumes increase.

“Venison has moved away from some European markets that tend to be highly seasonal and rely on a three-month consumption period over the Northern Hemisphere autumn and winter,” he comments.

More New Zealand venison may also find a home in markets where it is not competing directly with European wild venison. This includes developing Cervena® venison as a premium summer option in Europe.

Exporters agree on the benefits of developing these new Cervena markets, such as Benelux, for chilled European summer sales from March to August. Four companies – Alliance Group, Duncan NZ, First Light, Silver Fern Farms – are supplying chilled Cervena to Benelux this year to introduce Cervena as a premium healthy summer protein.

Mountain River Venison is leading a project in China, another part of the Passion2Profit (P2P) Primary Growth Partnership Programme, where inroads are being made to new venison distribution channels.

Finally, growth is being achieved in the US and Canada, which benefit from a lack of domestic venison supply, explains Tyrrell. Duncan NZ has seen increasing demand in both North American markets that together showed growth of nine percent over the past year, with chilled venison up 16 percent – largely at the expense of Europe.

“New Zealand venison benefits from growing US and Canadian demand for natural grass-fed, high-quality, healthy proteins that do not have antibiotics, are not genetically modified and have no hormone growth promotants. All of which suits our production systems.”

DINZ P2P manager Innes Moffat remarks the venison marketing companies agree continued investment in market development activities is necessary during this period of lower supply to make sure customers exist that are ready to take increases in volume at current prices.

“A reliance on the inelastic seasonal European game trade would see prices falling as increased volumes are offered back to this market.  That’s why investment during this period on re-positioning New Zealand venison when volumes can be carefully managed will benefit New Zealand venison producers in the long term,” he explains.

This article first appeared in Deer Industry News magazine (April/May 2017) and is reproduced here with permission. Check out the magazine for more in-depth deer industry specific news.

 

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