News that meat processors are likely to be paying more for deer this spring was welcomed by farmers at the annual Deer Industry Conference in Methven last week.
Silver Fern Farms, one of the two biggest venison exporters, announced its spring chilled contract prices on the third day of the conference.
National deer manager Malcolm Gourlie said farmers who entered a contract this spring would be able to lock in a minimum price similar to last year’s fixed contract prices. This season, however, there was the potential to earn up to 50 cents a kilogram above this, if market conditions and the exchange rate allow.
Firstlight Foods, a smaller exporter that operates in new markets, also confirmed that its 2014 base price for year-round supply was more than 50c a kilo higher than 2013.
Deer Farmers Association chair Kris Orange said this was news that many farmers wanted to hear. “These are benchmarks around which other exporters are likely to cluster.”
He said the consensus of farmers at the conference was that the farmgate venison price needed to be $2 a kg more than lamb, to make venison farming competitive. At present, the margin in favour of venison is only a matter of cents per kilo … the lowest it has been in many years.
“While the contract prices on offer don’t promise what we want, they are a step in the right direction and a signal of market confidence that farmers having been looking for.”
Deer Industry New Zealand chief executive Dan Coup told farmers that there was a pretty consistent view among marketers that traditional European markets were improving and that we have probably seen the bottom of the price curve. The supply pipeline is now empty and no stocks are overhanging the market.
“No-one is predicting where the market will peak this season. That depends on competitors and the exchange rate, but contracts are now on the table that enable farmers to budget,” he said.
Coup said the deer industry had been trying for many years to break free from its reliance on the traditional game meat commodity trade in Europe. The future, he said, lay in creating a brand for the New Zealand product which would attract a premium price and year-round demand.
“This takes time. It will also require farmers to commit their animals to that branded marketing programme, regardless of what happens in the commodity trade.”
Already some exporters are making good progress in niche markets. Conference goers heard that Mountain River Venison has created a premium brand in Sweden, where venison is traditionally consumed year-round. In the Netherlands, Firstlight Foods and Silver Fern Farms are working with a major food service company to build year-round demand for chilled product branded as New Zealand farm-raised venison rather than game.
But the big hope lies in the proposed launch of the premium Cervena brand in Europe and potentially China, driven by the five largest venison exporters. Coup said DINZ venison marketing manager Innes Moffat was currently overseas getting market feedback on the concept.
Alliance Group marketing manager John Rabbitt said he was an enthusiastic supporter of Cervena in Europe.
“Our venison deserves a premium for its superior quality, but at present it is largely sold to the commodity market and you can’t differentiate a commodity. We have to move New Zealand venison up the value chain by differentiating it through a premium brand.”
He said New Zealand venison was an ideal product to target at discerning customers who can afford to buy quality.
“The supply is limited. And we offer all the quality and traceability bells and whistles, something that our competitors can’t offer. These are increasingly important assets when you are selling to top-end retailers and food service.”
Coup said creating a market premium for venison was a key element in the Deer Industry New Zealand Passion2Profit strategy which is the subject of an application for Primary Growth Partnership funding.
Material supplied by DINZ.