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Tuesday 13 July 2004
The Ministry of Agriculture and Forestry's (MAF) 2004 Farm Monitoring report highlights the challenging times for the deer industry, with prices for both venison and velvet plummeting.
The report is part of an annual process where MAF Policy monitors the production and financial status of farms in terms of their cash income and expenditure. Trends, issues, and sector concerns are also monitored.
The model reports reflect farmers' expectations and intentions, and the thoughts of those servicing the sector. The prices used are farmers' own expectations in May/June 2004. The model data is not MAF price or production predictions.
The two deer models are designed to best typify an average family deer farming operation within specific regions, representing the North and South Islands. Information for each model is drawn from 20 real deer farmers, and discussions with a wide cross-section of agribusiness.
Author Carolyn Chitty says venison and velvet returns hit an all time low this past season, with the record high venison schedule price of $10/kg in 2001 now a distant memory.
The North Island venison schedule peaked at $4/kg, finishing the season at $3/kg. The South Island schedule ended at $4.12/kg.
Around 90 percent of New Zealand's venison exports go to Europe. Prices of these exports peaked in the last three months of 2001 as a result of European consumer concerns over bovine spongiform encephalopathy (BSE) in cattle and foot and mouth disease in the UK.
"As these food safety crises have cleared, demand has shifted back to other meats and venison prices have fallen to levels well below historic averages," Miss Chitty says. "This combined with past consumer resistance to high venison prices and the appreciation of the New Zealand dollar has created the current slump."
The schedule drop saw the net trading profit on the North Island model decline from a peak of $98,400 in 2001/02 to a loss of almost $7,000 in 2003/04. Next year's outlook looks marginally better, with a net trading profit anticipated of $23,255.
Velvet returns also took a sharp drop, resulting in a 27 percent and 45 percent decline in velvet revenue for the North and South Island models respectively. The weighted average velvet price for the 2003/04 season sat at around $60/kg compared with $100/kg last season. Farmers forecast on-farm velvet returns to rise by 10 percent in the 2004/05 season.
"Key reasons for the large price decrease are the impact of the exchange rate, and the inclusion of Canadian velvet that flooded the Chinese market at the start of the New Zealand season," Miss Chitty explains.
The report finds the lower venison prices and volatile velvet prices have reduced the growth of the New Zealand deer herd. The 2003 Statistics New Zealand livestock survey places deer numbers at around 1.69 million, which is lower than earlier estimates.
Variable climatic conditions over the report period have had a mixed effect on the country's deer farmers. For the second year running, low pasture growth rates, coupled with the declining venison schedule, made it difficult to achieve target slaughter weights at traditional times.
The lower North Island floods in February 2004 caused widespread damage to regional infrastructure and farms. Damaged fences meant that many deer farmers experienced stock losses through escapes.
The launch of Deer Improvement at AgResearch, Invermay is a major step forward for the deer industry. The artificial insemination (AI) scheme was launched in November 2003 by its parent company, Livestock Improvement. AI still comprises a small part of the deer industry, and it is unlikely to replace natural mating, which is the preferred method of breeding. This new technology does, however, have the ability to revolutionise the deer industry, in the same way it did for the dairy industry, and farmers are adopting a wait-and-see approach.
The New Zealand Deer Farmer's Landcare Manual has now been completed. Over 3 years in the making, the manual was launched at the Annual Deer Industry conference in June 2004. This publication is one part of an integrated deer industry environmental programme, gathering together and documenting anecdotal knowledge of New Zealand deer farmers on the effects of deer on the farm environment, and their experiences of successful methods of dealing with these issues. The New Zealand Deer Farmers' Landcare manual is free to all known New Zealand deer farmers.
Deer Industry New Zealand is making good progress with its velvet removal research programme. The programme was given priority last year when the experimental compression technique failed to win approval from the National Animal Welfare Advisory Committee (NAWAC). The compression technique had originally been trialled as a potential replacement for lignocaine and xylazine as part of the industry strategy to move to drug-free velveting.
Carolyn Chitty, Policy Analyst
Phone: 0-7-856 1821 or 0-21-184 7782