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NZ venison prices rise amid tight supply

NZ NewswireNZ Newswire 7/07/2016 Tina Morrison

New Zealand meat processors are having to pay more to secure supply of local venison to service their overseas contracts as farmers retain their breeding hinds to rebuild herds.

Spot prices for a 60-kilogram AP stag have hit $7.85/kg, up from $6.60/kg this time last year and the highest level for this time of year since 2011, according to AgriHQ.

Venison production dropped 36 per cent in May from the year earlier month, and is down 23 per cent in the processing season so far, from Oct.1 through May 31, according to AgriHQ.

New Zealand deer numbers have almost halved over the past decade and are at their lowest level in 26 years as farmers switched to more profitable sheep and dairy farming. However, recent weakness in dairy and sheepmeat markets is stoking renewed interest in the deer industry, where an improved outlook for venison is prompting farmers to retain their breeding hinds to rebuild their herds, creating a shortage of supply for meat processors and pushing up prices.

"What's happening now is we are seeing the venison profitability much higher than competing land uses," said Rachel Agnew, an agricultural analyst at AgriHQ's iFarm. "That's triggered people to want to get back into the industry so we have seen a large reduction in the number of hinds being slaughtered which is having an impact on overall production.

Agnew said venison exporters were wary of avoiding the previous "boom bust" cycle seen in 2011 when prices rose higher than buyers were prepared to pay, causing a slump in the market.

"It's great for farmers, they are getting some fantastic prices," Agnew said.

"But if you are looking at the big picture, while it's really good for farmers, there is a battle going on at the market end to preserve those prices and make them sustainable as opposed to seeing what we saw in 2011 where the prices got too high and the market collapsed."

Agnew noted an appreciation in the kiwi against the European common currency following the UK's decision last month to leave the European Union was also likely to squeeze processor margins for venison.

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