Deer Industry News #36 June 2009 - Deer Industry New Zealand

VenisonMarket ReportClouds loom on the venison horizon in the shape of reduced demand and an appreciating New Zealand dollar. Whileprices are expected to hold firm in main markets, a decrease in restaurant orders and supermarket sales is causing someconcern.ScheduleIn week 23, the average publishedschedule for 55-60kg AP stags was $8.73.This is $1.50 up on the same week in2008 and $3.30 above the three-yearaverage (2005 to 2008). The schedule is36% above the 10-year average.ProductionProduction in the first six months ofthe season, from October to March, of331,000 head is down 11% on the sameperiod in 2007/08. The proportion ofhinds in the national kill fell to 37% forthe first six months, down from around43% in previous years. Slaughter inApril-June is understood to be downsubstantially on previous years, with bigfalls in the hind kill, indicating both thereduction in available animals, but alsothe beginning of national herd rebuilding.ExportsExports of 17,825 tonnes in the 12months ended March 2009 were 16%less than the same period a year earlier.The total value of these exports was $305million, up 20% on the year earlier. Theaverage FOB value has increased from$12,000 to over $17,000 per tonne.New Zealand exporters are concentratingon supplying customers who will both paythe higher prices, and provide solid longtermbusiness for the future.CurrencyNZD returns are being eroded by theappreciating New Zealand dollar. It hasclimbed 8% against the USD and 9%against the Euro since the beginning of2009. With stable prices, this effectivelymeans 70 to 80 cents offthe schedule. The currency,at 0.64 USD and 0.45 Euro,$12.00is about the same as theaverages over the chilled$10.00season 2008, but as Europeanprices seem unlikely to reach$8.00the highs achieved last year,it seems unlikely that the$6.00venison schedule will exceedthe levels seen during thespring peak of 2008.$4.00Market conditionsEuropeEuropean importers haveconcerns about sales of$/kg$2.00$-expensive venison in the coming months.While the reduced volumes have meantthat manufacturers and wholesalershave snapped up cheaper cuts from thefore and hind quarter, the outlook forrestaurant sales in our main markets iscausing some concern. Consumers arereducing discretionary spending and mealsout are often not a necessity. Chicken,pork and South American beef are allcheaper than they were in 2008, so chefswill be examining their menus, seekingthe value options.Venison as a seasonal speciality is lessaffected by price elasticity of demandthan everyday commodities – consumersand chefs who are buying quality meatfor special occasions are unlikely to reallyremember what they paid last year, soare more likely to put up with the pricedifference between venison and cheaperproteins. However, if the price gap is toolarge, they won’t buy the venison.United StatesExports in the first three months of 2009are down 47% on 2008 because of weaksales to the restaurant sector. Chefs arebeing restrained by owners and managersand forced to examine every cost on everyplate. The situation is even more seriousfor chain restaurants, or restaurantsbelonging to major corporations – afteryears of chef celebrity, where chefs’whims and expectations of using only the“finest ingredients” were accommodated,the power has swung to the accountantswho are demanding the maximummargins on every serving.This bodes ill for expensive, low-turnoveritems like Cervena® venison. Venisonis an optional extra on most restaurantAverage Schedule. 55-60kg AP Stag1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51weekmenus. Chicken, pork and beef are lowercostessentials, and chefs are replacingtheir expensive exotic dishes withhigher margin, more common proteinalternatives.Food service promotionsIn order to remind chefs that New Zealandvenison is available, and is still goodvalue for money, New Zealand venisonmarketers will be implementing a shortpromotional programme in Germany,Belgium and the Netherlands this comingNorthern Hemisphere autumn. Manychefs will be familiar with New Zealandvenison as a seasonal staple, but withpressure on revenue, remembering howhigh prices got in 2008, and plenty ofcheaper protein options, they might beinclined to reduce their venison orders.In order to avert downward pressure onprices, New Zealand venison marketershave agreed that promotion to the foodservice sector is necessary. A programmelinking exporters, wholesalers andfoodservice media with purchasing chefsis currently being designed.New Zealand nutritionfocusVenison is a low-fat, nutrient-densefood, ideal as part of a healthy balanceddiet. DINZ will, over the coming months,continue to spread the word amonghealth professionals and consumerswith the production of new literature.Registered dietician Amanda Johnson haswritten two booklets on the nutritionalbenefits of venison. A consumer versioncontains easy-to-read messages and easyto-cookrecipes; a second, more detailedbooklet aimed at medicalprofessionals examines thebenefits of venison as partof a healthy diet.2005 2006 20072008 2009In addition, DINZ willonce again be presentingvenison to New Zealand’sdieticians and nutritionistsat the annual Dieticians’conference. This year,having venison productsfeaturing the National HeartFoundation Heart Tick willadd weight to the “venisonas a healthy meal” message.24Deer Industry News