- Outlook for 2003/04 to 2006/07
- Latest situation and outlook
- Table 9: Venison and velvet situation and outlook
- Table 10: Venison schedule prices: baseline and alternative exchange rate scenarios
Deer
Outlook for 2003/04 to 2006/07
Production
Latest situation and outlook
Statistics New Zealand released their provisional 2003 survey results in February 2004. Total deer numbers increased 3 percent to 1.69 million. Hinds make up 70 percent of total deer numbers. Numbers are projected to fall out to June 2006 and then start rising again reflecting improving venison schedule prices. At the present time, farmer confidence is waning due to ongoing below average venison returns, and some are down sizing or exiting the industry. Alternate production systems, especially lamb production, are currently more competitive.
Farmed venison production for June year 2004 is estimated to rise by 18 percent because of a 10 percent rise in stag slaughter and a 23 percent rise in hind slaughter. Production is projected to fall over the outlook period to June 2007 in line with the decline in herd numbers. Velvet production is estimated to be up 4 percent for June year 2004 but will fall over the outlook period.
Significant changes from SONZAF 2003, and reasons for the changes
Venison and velvet production are both higher for the year ending June 2004. However production is predicted to fall off over the outlook period because of a projected decline in deer inventory numbers out to June 2006.
Exports and product prices
Latest situation and outlook
Export quantities follow the trends in production of venison and velvet. Around 90 percent of venison is exported to Europe with Germany the main market. South Korea is the dominant market for velvet. Over the outlook period, favourable indicators for venison are the increased access to the French market, positive responses to marketing initiatives in traditional markets and the increased demand for venison on the New Zealand domestic market.
International venison prices are approximated by FOB prices. FOB prices for June year 2004 are down 8 percent because of stronger exchange rates. Prices are projected to rise slowly over the outlook period from this low.
Velvet prices are projected to rise over the outlook period with increasing demand in South Korea and China.
Significant changes from SONZAF 2003, and reasons for the changes
Export volumes are generally lower because of a change from inventory growth to decline. FOB prices are lower because of stronger exchange rate assumptions.
Producer prices
Latest situation and outlook
Schedule prices for venison follow the trend in FOB prices. Over the outlook period, AP2 stag schedule prices will be significantly lower than prices paid during the boom years of 2000 to 2002. Velvet pool prices are projected to rise from a low base in June year 2004, when weighted pool prices are estimated to have tumbled 40 percent, due to weaker demand and exchange rate appreciation.
Significant changes from SONZAF 2003, and reasons for the changes
The main reason for the change in venison and velvet prices from SONZAF 2003 has been stronger exchange rate assumptions.
Table 9: Venison and velvet situation and outlook
| June year | Units | 2002 | 2003 | 2004e | 2005f | 2006z | 2007z |
|---|---|---|---|---|---|---|---|
| Mated hinds (opening)1 | mil | 0.816 | 0.891 | 0.896 | 0.885 | 0.883 | 0.893 |
| Total deer (opening)1 | mil | 1.56 | 1.64 | 1.69 | 1.68 | 1.65 | 1.65 |
| Velvet | |||||||
| Production | t | 522 | 528 | 550 | 511 | 468 | 444 |
| Exports | t | 629 | 456 | 553 | 500 | 423 | 422 |
| Pool price2 | $/kg | 96 | 99 | 59 | 68 | 70 | 80 |
| Venison | |||||||
| Stag kill | 000 hd | 274 | 297 | 328 | 323 | 319 | 315 |
| Hind kill | 000 hd | 182 | 231 | 286 | 279 | 261 | 263 |
| Total kill | 000 hd | 456 | 528 | 613 | 602 | 580 | 577 |
| Production3 | 000 t | 25.0 | 28.0 | 33.0 | 33.0 | 32.0 | 31.0 |
| Exports4 | 000 t | 16.0 | 16.2 | 20.1 | 20.8 | 22.6 | 21.8 |
| NZ FOB | $/kg | 13.4 | 9.74 | 8.94 | 9.31 | 9.72 | 9.91 |
| Schedule price - baseline 5 | $/kg | 8.08 | 4.77 | 4.40 | 5.03 | 5.55 | 5.66 |
| NZD/Euro baseline scenario | Euro | 0.481 | 0.497 | 0.531 | 0.524 | 0.494 | 0.490 |
Sources: Statistics New Zealand, Deer Industry New Zealand and MAF
1Opening numbers are as at 30 June.
Statistics New Zealand census data as at June 2002 and provisional survey data as at June 2003.
MAF estimates, forecasts and projections for other dates.
2Weighted average pool price.
3Production in carcass weights and excludes feral deer.
4Exports in product weight and includes both farmed and feral production.
5Average schedule price AP2 stag.
Figures may not add or reconcile due to rounding.
Alternative exchange rate scenario analysis
Exchange rate volatility is a major cause of variation in export prices for venison products and the schedule prices received for livestock presented for slaughter. The main currency used for the venison trade is the Euro.
Over the period 2004 to 2007 the baseline AP2 schedule price is projected to rise by 29 percent. In the high exchange rate scenario, the AP2 schedule rises by 25 percent over the same period, while in the low scenario the AP2 schedule rises by 36 percent.
Table 10: Venison schedule prices: baseline and alternative exchange rate scenarios
| June year | Units | 2002 | 2003 | 2004e | 2005f | 2006z | 2007z |
|---|---|---|---|---|---|---|---|
| Venison schedule price - baseline exchange rate scenario | |||||||
| NZD/Euro higher scenario | Euro | 0.481 | 0.497 | 0.531 | 0.524 | 0.494 | 0.490 |
| Venison schedule price1 | $/kg | 8.08 | 4.77 | 4.40 | 5.03 | 5.55 | 5.66 |
| Venison schedule price - higher exchange rate scenario | |||||||
| NZD/Euro higher scenario | Euro | 0.481 | 0.497 | 0.533 | 0.533 | 0.510 | 0.511 |
| Venison schedule price1 | $/kg | 8.08 | 4.77 | 4.40 | 4.98 | 5.43 | 5.50 |
| Venison schedule price - lower exchange rate scenario | |||||||
| NZD/Euro lower scenario | Euro | 0.481 | 0.497 | 0.531 | 0.514 | 0.472 | 0.460 |
| Venison schedule price1 | $/kg | 8.08 | 4.77 | 4.40 | 5.09 | 5.70 | 5.98 |
1Average schedule price AP2 stag.
Comparing the high and low scenarios to the baseline in 2007, a 4 percent appreciation of the NZD/Euro indicates a 3 percent fall in AP2 schedule price, and a 6 percent depreciation indicates a 6 percent rise in AP2 schedule price.
Comparing the low and high scenarios over the outlook period, on average, a one cent (of a Euro) change is equivalent to an eight cent rise in schedule price.
Contact for Enquiries
Monitoring and Evaluation
PO Box 2526
Wellington
New Zealand
