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Positive signs for deer industry – MAF report

7 August 2006

Positive signs for deer industry – MAF report

The coming year looks to be a more promising one for the deer industry than previous years, with farmers remaining positive, but saying more price stability is needed before they’ll increase their herd numbers.

That’s according to the Ministry of Agriculture’s (MAF) latest farm monitoring report on the deer sector.

The deer report is part of a series of annual reports that look at several different primary sectors, monitoring the production and financial status of farms and examining trends, issues, and sector concerns.

The reports are based on model operations designed to typify average farms and use information drawn from real farmers and a wide cross-section of agri-business. The deer report is based on two models – for the North and South Islands.

Report co-author, Policy Analyst Deborah Hackell, says the review of the 2005/06 year shows the North Island model experienced a seven percent increase in gross farm revenue to $110,632, reflecting a small increase in venison returns.

Revenue for the South Island model dropped a further 1.4 percent to $142,508.

The report shows an increase in income generated off farms - an indication of farmers under pressure in both islands.

Ms Hackell says the 2005/06 average price for velvet was static in both models, and the industry has reported a move away from velvet due to increased compliance costs and poor financial returns. “This is emphasised by an estimated reduction in the national velvet heard of 26,000, leaving a velvet producing capacity of around 530 tonnes,” Ms Hackell says.

“In fact, the latest agricultural production statistics, collated by Statistics New Zealand, show a three percent decrease in overall deer numbers nationwide in the year June 2004 to June 2005, down to 1.705 million.”

The report shows the industry has managed to diversify significant product volumes away from the European Union and particularly Germany, which currently takes 40 percent of New Zealand’s export volume, with the Australian and Asian markets taking a significant volume of lower value cuts and manufacturing products. This has helped prevent overburdening the United States and European markets.

The report notes industry has also made a considerable effort to expand overseas consumption periods and develop new markets. A particular focus has been promoting New Zealand farmed venison over game trade venison as it is expected buyers will increasingly seek more assurance about the origin and safety of their venison.

Looking to the future, the report projects venison prices are expected to increase in 2006/07 due to a drop in supply of better-weight animals and shifts to improved management and marketing strategies.

Some in the industry have commented that deer farmers are beginning to understand the Cervena market, and there is optimism that farmers will be able to get much higher returns in the future.

The North Island model expects about a 10 percent increase in venison returns, with a 14 percent increase forecast for the South Island for 2006/07.

The net velvet price is expected to increase to $49 to $50 per kilogram, an average increase of about 14 percent. Ms Hackell says while this provides hope, it is still only about half of previous years’ returns. She says a proposed new velvet selling organisation should aid in a return to better velvet prices and could have significant impact on how velvet is viewed by the industry.

ENDS

To view the report in full, go to:
www.maf.govt.nz/mafnet/rural-nz/statistics-and-forecasts/farm-monitoring/2006/deer/index.htm

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