With import prices for chilled New Zealand venison up 10-15 percent this year, customers are sounding warnings of price resistance among chefs in Europe and the US, says Deer Industry NZ (DINZ) chief executive Dan Coup.
Current prices are being driven in part by a reduction in supply from New Zealand and other sources, he says. In the 12 months to August 2017, the New Zealand deer kill was 300,000, down eight per cent on the previous 12 months. Venison production was down six percent, the lowest level in 20 years.
“With strong demand and reduced supply, marketers have obtained price increases for middle cuts and manufacturing items in the main European markets,” Coup says.
“All premium red meats in Europe – game, beef and lamb – are expensive. Prices for roe deer venison, which normally sells at a premium over red deer venison, are also high, but the gap is closing. We have heard of some cases where the prices asked for New Zealand venison are higher than for roe, which is unusual.”
He says the European game meat season is now in full swing, but many historical buyers of New Zealand venison will not be buying it this season because of the high price.
“Marketers observe that the European market is finely balanced between supply and demand, with a reduced supply currently balanced by higher prices.”
According to Coup, the deer industry has always sought to reduce reliance on the game season. In the past few years, marketers have succeeded in creating demand in new markets such as the US, New Zealand retail and Scandinavia, plus summer sales in Europe.
“This means marketers now have some more choices about when and where they sell their venison. While the European game season remains vitally important to New Zealand, other markets provide a more stable return because they are not as affected by competition from venison from other suppliers,” he says.
“When European food manufacturers are producing items based on game meat, they can substitute good quality European venison for New Zealand if the European price is lower. In contrast, food manufacturers in the United States can – for legal reasons – only use New Zealand venison if they want to produce a venison item.
”At the moment, we are experiencing very strong demand for manufacturing venison in the US where exotic meats are currently fashionable. For this reason, as well as the reduced overall supply, sales to Germany are down 51 per cent in the last year, compared with the US, which are up 126 per cent.”
The average published schedule price for a prime venison carcase is currently $9.82 a kilogram. This is 17 cents a kilo more than the last price peak of $9.65 on 25 October 2008, when the Euro and US dollar were much stronger, relative to the Kiwi dollar, than they are today.
Coup says that favourable prices are encouraging many deer farmers to retain more young hinds in order to build their breeding herds. Greater retention of hinds in the last 12 months has accentuated the fall in New Zealand venison supply.
“With continued retention, we don’t expect to see a major change in New Zealand venison production volumes in the next 12 months, so that bodes well for stable pricing into next season. We will have to wait and see if the strong demand conditions hold up as well.”
Although reduced supply is a major driver of prices to deer farmers, Coup says the other big driver is market diversification. This is the result of many years of work by marketing companies seeking to diversify their customer base.
“In due course supply will recover. In the meantime we encourage farmers to continue to support their marketing companies’ activities that require a long-term commitment to developing markets and adding value to New Zealand venison,” he says.