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23 August 2010
The weather and the NZD-Euro exchange rate had a significant impact on deer farmers in 2009/10 with average cash surplus down by more than 60%, according to the latest Ministry of Agriculture and Forestry's farm monitoring reports.
The model results and commentary from MAF's deer monitoring reports were released this week and showed deer farms' net cash surplus per deer stock unit decreased 62 percent in the North Island and 65 percent in the South Island compared with 2008/09.
The main reasons for the decrease were variable climatic conditions and a reduction in the average price per kilogram achieved for venison - back around $1 per kilogram on 2008/09 levels.
In contrast, velvet had a positive year selling for $81 (North Island) to $91 per kilogram (South Island) a 47 to 57 percent increase respectively on 2008/09 prices.
MAF South Island Regional Manager Trish Burborough says that, despite the drop in average venison price to $6.86 per kilogram in the North Island and $7.34 in the South Island, those prices were better than the five year average. This meant deer farmers still broke even or made a modest cash surplus before off-farm income was taken into account.
"The continuing higher than average exchange rate between the New Zealand dollar and the Euro was a major contributor to the decrease in on-farm venison prices. Farmers also welcomed the return of velvet prices to the $80 to $100 per kilogram target price range," says Mrs Burborough.
A cool 2009 spring in the south and lingering drought in the north affected production, keeping it to around average levels.
Farmers in the North Island indicated that they were rebuilding numbers but, after consecutive droughts, they did not want to force the stocking rate too high. More dry stock gives flexibility to drop stock if it dries out and potentially a more profitable total operation. More farms increased their finishing operations as a result.
Both deer models reflected the higher proportion of deer now farmed on hill country rather than on fertile flats. This meant the models changed to larger units with lower stocking rates. Deer, like sheep and beef, competes with dairy and dairy support on land suitable for dairy conversion.
Deer farmers were cautiously predicting that venison prices in 2010/11 would be back only slightly and velvet prices would also soften but remain in the $80 plus range. The exchange rate of the New Zealand dollar against the major currencies venison and velvet are traded in will also be a significant factor in 2010/11 on farm product prices. Given average climatic conditions, average or better per head production should be achieved.
MAF's information for the North Island model is based on 20 deer farms in the Gisborne/Hawke's Bay and Waikato regions. The South Island deer model is based on 20 farms from Southland, South Otago and some Canterbury foothill properties.
A copy of the reports can be found on the MAF website: http://www.maf.govt.nz/mafnet/rural-nz/statistics-and-forecasts/farm-monitoring/
Peter Thornbury, Senior Communications Adviser, 04 894 5535; 029 894 5535;