Level of Supply Response
The level of supply response is determined by the number of animals available to provide breeding hinds, venison and velvet. The factors influencing breeding stock levels are the price of breeding hinds, relative to their venison value, and the comparative gross margin between deer breeding/finishing operations compared to other livestock enterprises. The main factor determining the growth of the stag herd is the price of velvet
The number of deer available for venison production from either the stag or hind herd is influenced by changes in breeding hind values, velvet prices, venison returns and the relativities of these returns with those of other livestock enterprises.
As noted in Figure 6 the deer numbers and production graph the rapid change in prices over the 1991-1993 period resulted in substantial increases in venison and velvet production, and a significant fall in livestock numbers.
Growth in Hind Numbers
The hind herd which makes up about 65% of the total herd, grew by about 26% pa from 1981 to 1990. While returns from breeding were high, few hinds were slaughtered, so the age of the breeding herd increased. The live sales, venison values and slaughter rates for hinds over the 1980 to 1993 period are shown in figure 8.
Demand for breeding hinds kept prices above their venison value through until 1991.
Nominal (real) prices peaked in 1985 at over $3,500 ($6,000) per head. A significant fall
in the venison schedule price reduced industry confidence in 1991, and hind values fell to
around their venison return. It was this fall to their venison value that caused hind
slaughter to increase dramatically. It grew from 7,000 hinds (300 tonnes) in the 1989 June
year, to peak at just over 224,000 hinds (9,000 tonnes) in the 1993 June year. The 1992/93
increase alone was up 40% on the previous season.
Apart from the fall in value and the ageing of the breeding herd, this high hind kill was
driven also by a loss of confidence in the industry after venison prices fell sharply
during the 1991/92 season.
FIGURE 8: HIND VALUES & VENISON PRODUCTION (Real 1992 Prices)
As the growth and reproductive rate of the deer herd is dependant on the availability of hinds, the hind herd is expected to continue to grow so long as the live value of hinds is greater that their venison value.
Stag Herd Growth
The stag herd growth averaged about 17% pa between 1986-1988. As velvet prices rocketed in 1989-1990 stag herd growth increased by around 23% pa to peak at around 435,000 in June 1992.
FIGURE 9: STAG VELVET PRICES & PRODUCTION
The main influence on stag herd growth is the price of velvet. As shown earlier gross margins from velvet operations were higher, even than dairying through until the 1992/93 season.
Unlike other animals, stags grow velvet each year, and the quantity produced increases annually until they are six years of age. Provided they are healthy, stags continue to produce good heads of velvet until at least ten years of age. While the ageing of a stag improves velvet weights, it reduces the stags attractiveness for venison production. In older stags the venison texture is tougher and the flavour is stronger.
As can be seen in Figure 9, when velvet prices increased rapidly from $120 to $250/kg for A2 grade, venison produced from this source fell. Higher velvet prices resulted in farmers retaining additional stags many of which were poor velvet producers. After low prices for two consecutive seasons, farmers culled poorer producing stags. As a result the stag kill increased by 80% in the 1992/93 season.
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NEW ZEALAND
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