Deer Industry NZ (Dinz) is expecting improved market conditions for venison in the coming year, with better prices assured for venison animals processed for supply in the European game season.
"In the next few weeks some venison companies will be offering minimum price supply contracts for the game season, for shipment of chilled venison during September and October," Dinz chair Ian Walker said.
"Contracts offered in 2020 were $7-$7.20 a kilogram, when Europe was gripped by Covid-19. This year we are seeing restaurants starting to reopen in North America. Also prices for all meats in major world markets have begun what economists expect will be a steady long-run climb.
"Despite all the disruption caused by Covid, the 2020 European game season went well, both at food service to restaurants and at retail. Importers were understandably cautious with their orders, but they sold everything and could have sold more, if not for airfreight disruptions.
"With mass vaccination programmes under way in Europe, demand from food service this coming game season could be even stronger. The only note of caution is the strength of the NZ dollar, which has firmed by about 10 per cent against the Euro and US dollar since last October," Walker said.
It was more difficult to predict demand outside the chilled season, when a lot of venison was frozen after processing. Demand for frozen venison came mainly from northern Europe, and now China.
In Europe it was stored until the following game season for use in traditional cold weather game fare.
"There are significant stocks of frozen venison, from New Zealand and other countries, in Europe from last game season. This will tend to have a bearish effect on prices for the next few months," Walker said.
"On the other side of the ledger, prospects in North America are improving and demand from China – a developing market for venison – keeps growing.
"The US restaurant scene is coming back as vaccination campaigns are rolled out and infection rates drop. The US is our biggest year-round market for chilled venison.
"Venison marketers have also been very active in North America in the last 12 months, building retail and home delivery demand for our venison, with some promising results. While this will take time to be reflected in meaningful volumes, every kilogram that is sold is a kilogram that is not sold frozen in Europe."
Meanwhile, food price inflation is gripping the world. Beef, pork and chicken prices are climbing on the back of the highest grain and soybean prices in seven years.
These are being driven by poor harvests – bad weather and droughts – at a time of growing demand, especially from China.
Westpac Bank senior agri-economist Nathan Penny, writing for interest.co.nz, said US bull beef and EU lamb leg prices had both jumped by about 10 per cent above 2020 prices.
Penny expected Covid vaccine rollouts would boost demand for New Zealand meat, first in the US – where the rollout was going very well – and then later in the year in the EU and the UK.
This boost would add to the demand strength already present in China, Penny said.
"That means venison prices, which have been hardest hit by Covid, are also likely to turn the corner as European (German) meat demand returns."
"We expect the farmgate venison price pickup to materialise from around mid-year."
Walker said Dinz was working closely with the five major venison marketing companies to build year-round demand for venison, particularly at retail and online for home delivery.
"We fully recognise that deer farmers need a schedule premium over lamb to make venison production a competitive land use. The industry was achieving that until the impact of Covid."
"Venison prices will improve. And hopefully none of us will have to deal with another pandemic in our lifetimes. Once is more than enough."
Walker said that because deer farmers can bank on getting better prices during the chilled season, they should target getting venison animals away before the end of October, if that fits with their farm system.
"Talk to your venison marketing company about their plans and consider locking in supply over this period."