Saturday, December 2, 2023

Venison continues to buck red meat trend

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Market recovers, with chilled segment holding up in Europe.
Deer specialist Ron Schroeder says breeders coming off the back of two hard years are now connecting with a softer finishing market.
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The chilled venison market continues to hold up in Europe with marketers reporting strong demand for New Zealand venison, which is supporting contract prices up to $10.50 a kilogram.

Despite a slow spring season, farmgate prices are expected to settle at off-season levels reflecting the venison market’s recovery. 

Lower numbers of animals through the wet and cold weather of September and October made it the latest spring finishing ever seen by some processors across much of NZ.

The slow growth has limited supplies this spring, meaning some customers have missed out on volumes.

Venison specialist Duncan NZ general manager marketing and operations Rob Kidd reported through Deer Industry NZ (DINZ) that the company has achieved sales agreements for expected volumes and prices at the start of the season but deadlines to get venison sea-freighted to Europe by Christmas have passed, meaning the marketer will have to make up any balances by air.

This could be around 10 times the cost of sea freight.

Orders have now been filled, but the additional cost will not be possible to recover from customers, as prices have already been agreed, Kidd said.  

Silver Fern Farms (SFF) also reports that the market is buoyant, “to the point that we’ve actually ended up having to turn away some of the volume enquiry because it’s been above what we’re able to supply”, SFF global sales operation manager Glen McLennan said.

SFF chilled prices had been up on average about 5% on last year, which McLennan said can be taken as a positive long-term sign. 

SFF recently added air-freight shipments to supplement volumes, which McLennan noted as a sign of demand. He reiterated that air freight rates from NZ have not eased as much as they have in other parts of the world.

SFF, Duncan NZ, Alliance and First Light were among the NZ venison companies represented at the giant trade show in Cologne, where crowds were well up, with more than 140,000 trade attendees from 200 countries in attendance.

Looking ahead, marketers report the outlook for venison remaining sound now that chilled shipments are finishing and premiums are coming out of the contract top-ups with expectation venison farmgate prices will settle at off-season levels that reflect the continued recovery of venison markets.

Nationally published schedule prices for AP stags continue to average at $8.82/kg, around the five-year average for this month, as they have for most of this year, with one marketer offering contracts at $9.40/kg through to the end of the year. 

While the international meat commodity markets remain tough, for lamb in particular, McLennan said the market is still positive for venison, the least impacted of all the red meats.

Warmer weather in Europe has given a slightly slower start to winter and held back the traditional game-season demand for frozen venison.  

Buyers tend to wait to see what happens with chilled demand and hold off until the New Year to purchase. 

Venison marketers expect to start selling frozen venison in earnest from late November/December onwards.

Conversations with buyers for SFF and Duncan NZ have picked up their short-term issues of an underlying nervousness across all proteins because of ongoing geopolitical uncertainty, the global cost-of-living crisis and inflationary pressures.

Kidd also noted there is a current glut of beef and sheepmeat on the market because of drought in the United States, but said another real concern has raised its head for the first time – an expected decline in the meat supply in coming years, citing as an example the US cattle herd now being the lowest in history.

Another key theme picked up is that retailers are increasingly more interested in supplier stories with branded products, and sustainability messages are more prevalent than in previous years.

In addition, value-add through further processing is still front of mind for buyers.

While these concerns could affect the short-term outlook for frozen venison in early 2024, marketers remain optimistic about the medium- to long-term outlook.

“Balancing global tensions in a forecast lower deer kill and so lower venison volumes may help underpin export pricing of both venison and co-products,” Kidd said.

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