Wednesday, July 6, 2022

Europe’s recess hurting NZ venison prices

“RECESSION weariness” is eating into our venison schedule prices as some European chefs substitute venison with cheaper wild game increasingly available from Spain. The farmgate price for AP stag (60kg) is about $6/kg CW, compared with $7 at this time last year, down about 14%. Deer Industry New Zealand (DINZ) says the average schedule price last year was $7.52/kg and in 2011 it was $8.23. “The venison market has done a good job over the past five years to obtain consistently high prices out of reduced European consumer demand for higher-priced proteins,” DINZ venison marketing services manager Innes Moffat said. “The trend is for chefs to use cheaper products and alternative game meats, which we have to counter with active marketing of the NZ venison qualities, along with diversification into Scandinavia, the UK and the US,” he said. Spain has quite a large deer herd, kept on estates for a tradition of hunting parties. However, the recession has chopped the hunting demand and so the estate owners have sent more deer direct to slaughter and improved the venison quality, while substantially undercutting NZ prices.

Last year Spain sold about 3000 tonnes to other European countries.

New Zealand annual exports are about 15,000 tonnes, of which Germany takes 35%, Belgium and the Netherlands about 10% each, Finland and the US 8% each and France, Switzerland and the United Kingdom about  5% each.

Deer Farmers Association executive member John Somerville, from Southland, said the Germans were teaching the Spaniards to prepare venison and compete on generic “game meat” markets.

He also asked whether the large losses made last season by NZ’s major exporters were having an impact on their ability to be strong in a tough marketing environment.

Are deer farmers paying the price of lamb procurement wars?

Silver Fern Farms chief executive Keith Cooper said deer schedule prices, as with all species, were market-set and there was no cross-subsidy.

“Yes, we made a loss last year but we cannot offset future profits against last year’s loss.

“There are three venison-only processors out there, so there is organic market governance on pricing.

“The current values are very market-related, principally driven by currency and the economic conditions in Europe.”

Cooper and NZX Agrifax said the European loin reference price was about €14/kg and the boneless shoulder reference price was €4.70, both about 18% down on a year ago.

Although the NZD and Euro cross-rate is comparable this February with last February, it has moved around during the 12 months.

Cooper said currency hedging was done on a mix of exposures, not at any specific time, nor could it be directly related to the meat schedule on the day.

He described the European venison markets as weak and slow because of the plentiful, cheaper hunted venison and wild boar, lack of confidence among importers and the economic situation, leading to a tight supply chain.

Moffat said DINZ would stick to its marketing efforts to educate chefs from the main markets, some of whom are brought to NZ to see deer farms, processing plants and to work alongside our venison chefs.

“The good news is that we are hearing of European chefs who have tried the Spanish or other game alternatives and are coming back to NZ venison for its better qualities,” he said.

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