Deer velvet: Sector takes the rough with the smooth

Velvet prices may have eased, but the industry remains solid.

Velvet prices have eased, but it appears business as usual in Asia despite the coronavirus crisis in China.

Feilding deer velvet farmer and former Central Region Deer Farmers chairman Craig Hocken said he had heard New Zealand exporters had talked to Chinese importers and they had advised it was business as usual.

Hocken was convinced the coronavirus outbreak, while hugely serious, was only a blip on trade with Asian countries.

"Prices appear to have come back 10 -15 per cent on last year and buyers are after a cleaner, tidier product rather than the more traditional trophy style cut," Hocken said.

South Korea had been New Zealand's biggest market, but Hocken said China had opened up more since this country's free trade agreement had been signed and velvet had met the criteria as a health food product.

North America was also taking New Zealand velvet, although Hocken said that was more the petfood grade.

"Super A grade velvet, depending on how it presented, is still fetching anywhere from $125/kg to $145/kg and I believe these prices are sustainable in the longer term. This is still a bloody good industry to be in.

"Our marketers are working hard in international markets," Hocken said.

Meanwhile, Dinz (Deer Industry New Zealand) marketing manager Rhys Griffiths reported on the organisation's website in December that concerns about the increasing supply of velvet had meant some importers were reluctant to commit to orders early in the season.

This was despite fundamental indicators remaining strong in key markets.

Exporters have worked hard to hold prices at levels similar to past seasons, but many of them believe the supply and demand relationship is more balanced than it has been for several seasons.

"After a decade of reasonable increases in prices and volumes, prices appear to have eased to levels similar to what was achieved the season before last. Last season, prices went up more than most expected, so this could be seen as a bit of a correction. This confirms what we always knew, that the growth in market demand is not limitless," Griffiths said.

Early in the season some buyers held off from taking a price position. Now most have come into the market, but are taking a cautious approach – committing to smaller volumes than at the same time last year.