US demand drives record venison prices

Stuff.co.nz, HEATHER CHALMERS December 6 2017

Venison prices have continued to rise, despite the seafreight European chilled game market ending.

Soaring demand from the United States for reduced supply is behind an unprecedented lift in venison schedule prices beyond the traditional peak, says Mountain River Venison’s marketing director John Sadler.

“We have the extraordinary situation where schedule prices have gone up in November,” he told a deer industry P2P field day in Canterbury. Traditionally venison schedules peak in September and October for chilled product to meet the European game season market. However, this year schedules have remained above $10 a kilogram.

“Everybody has been asking what is happening,” said Sadler, who has been responsible for marketing venison for the privately-owned Mountain River since its inception 23 years ago.

Growth in sales to the US had accelerated, a trend that had been occurring for the last three to four years. Up to 2010, the share of New Zealand exports to the US was steady at 5 to 7 per cent. From 2011, it started rising about 10 per cent a year, growing to nearly 26 per cent of sales this year. “So the US market has become significant and is a reasonable contributor to the current schedule.” As a result, sales to Europe had fallen as venison exporters struggled to supply long-term relationships.

Currency movements have also favoured exporters and farmers, with the Euro easing from 64 cents to 58 cents against the Kiwi dollar since the end of October. This added 20 to 30 cents/kg to returns.

The US market had three segments including a snack food market driven by paleo diets and healthy food. “There has been an explosion in demand for these types of products using bison, venison and wild boar, which have been quite successful.

“Ground meat and burger retail products are also extremely popular, which again is linked to the paleo diet movement and healthy eating.”

Another sector pushing demand was the pet food market promoting premium raw food for cats and dogs. As an alternative to dry food, several pet food companies are marketing a venison or game offering.

“With New Zealand venison production down it’s been a bit of a bidding war, so the price has gone up from $6/kg to $8 to $9/kg for meat coming off bones.

“Normally the end of seafreight chilled shipments means prices coming back, but the pet food demand and currency movements have lifted returns by $1.30 to $1.50/kg.

“It’s confusing for a farmer, but a good thing that the market is going away from a focus on September and October. We have been saying for a while that it is better to get more meat on your deer and get them bigger as we need more meat.”

While the industry as a whole sells about 25 per cent of its venison to the US, Canterbury-based Mountain River sells 35 per cent following a long-term commitment.

Another US success story was the company’s supply of 50 tonnes of steak to restaurant chain Arby’s for a limited edition venison sandwich. “Arby’s had a fabulous success. It wasn’t that they made money out of the burger, but had a huge social media impact equivalent to $10 million of social media free advertising.” Participating restaurants sold out within hours, leading to the promotion being repeated this year, placing the New Zealand venison sandwich on the menu as a limited time option at each of its 3228 US restaurants.

“This has told us that venison is something that works in the US. Previously it was considered that the US associate venison with Bambi. We can now go to chain restaurants and say this product works.”

Auckland-based Sadler said there was some risk with the pet food market. “Take it while it’s there.

“Pet food works on an annual cycle with a roll-over date in November. Next November could be the decider, especially with prices so high.”

Market diversification such as Cervena in Europe and growth in China are also assisting venison demand. “China is only 2 to 3 per cent of sales at the moment, but one day it will be a huge market.”

Products have also diversified, with restaurants using leg cuts instead of loins, so more of a carcass can be used in top-end food service. “This also means that venison is not too expensive that chefs take it off the menu.”

As growth in venison supply is expected to be gradual, the market should hopefully avoid the boom and bust cycles of the deer industry’s earlier years, Sadler said.

In the 12 months to August 2017, the New Zealand deer kill was 300,000, down 8 per cent on the previous year. Venison production was down 6 per cent to the lowest level in 20 years.

Deer Industry New Zealand said the average published schedule price for a prime venison carcass was $9.82/kg.This is 17 cents/kg more than the last price peak of $9.65 on October 25, 2008, when the euro and US dollar were much stronger, relative to the Kiwi dollar, than today.