Slump hits venison price hard

By LIAM DANN

As the rising kiwi dollar and global economic uncertainty start to hit farmers in the pocket, few are hurting as much as the nation's deer farmers.

According to Ministry of Agriculture and Forestry estimates, the average North Island deer farmer's pre-tax net profit has fallen from $98,380 to just $23,640.

It is expected to improve only marginally next season.

Only dairy farmers and those in drought-affected regions of the North Island have fared worse in this latest agricultural downturn.

Over the past five years, farmers' prices for venison steadily improved, then boomed, and have now been hit by a huge slump.

The average price of venison over the past five years was $5.76/kg.

At the peak of the boom in 2001 it was $10/kg. It has since plummeted to just over $4/kg.

The volatility deer farmers have faced in the past 18 months had to be put in the context of some dramatic world events, said New Zealand Deer Industry chief executive M. J. Loza.

The problems started in 2000 with the BSE and foot-and-mouth outbreaks in the European beef industry, he said.

Europe accounts for about 80 per cent of New Zealand's venison exports. Germany alone takes 50 per cent.

The irony is that, as consumers panicked and moved to non-traditional sources of protein, venison prices soared.

Before then the market had been growing steadily and sustainably for two years, Loza said.

Importers began to speculate, and took positions based on the very high prices.

Then, as quickly as it had risen, demand fell.

Consumer concern about the beef-related diseases eased and at the same time Germany lifted its quotas for Argentinian beef.

The market was flooded with cheap beef, leaving high-priced venison stranded.

A lot of the big importers got burned, Loza said.

Last season farmers bore the brunt of the losses that importers had felt the season before.

Deer Farmers Association president Errol Croad said it had been difficult for farmers to budget with prices fluctuating so dramatically.

Things had been grim, but there was optimism at the industry's recent national conference that things could only get better.

"I would be disappointed if prices went any lower," he said.

Deer farmers still believed passionately in their product, he said. It was exactly the kind of low-fat, high-iron product that modern consumers wanted.

It was just a matter of getting the message out.

Said Loza: "I guess if there is good news on the horizon it's the fact that we've got all industry players in New Zealand around the table."

"We do have a strategy in place for marketing and building demand for venison outside of the traditional season."

The challenge was to cultivate health-conscious modern consumers who valued assurance and safety, consistent tenderness and the New Zealand image, he said.

"All these things which are inherent in our product are valued by our new target market," he said.

So ingrained is the European attitude to venison as a seasonal dish that it is actually illegal in France to market it out of season.

France is our fourth-largest market, so there is great potential for growth if the rules can be changed.

The New Zealand industry, with help from the Government, has lobbied hard and recently had an assurance that change was on its way.

In the meantime, deer farmers will have to watch prices slowly crawl back into a more normal range.

That would happen, Loza said. But it was likely to take between nine and 12 months.