1 The words "All", "Many" and "Few" rank the importance of an issue in terms of the proportion of votes it received by the workshop members.

This model is representative of deer farms in Southland and South Otago. It is based on a farm running only deer and the base numbers are 520 mixed age breeding hinds with 120 rising 2-year hinds (Tables 8 and 9). Seventy of the rising 2-year hinds are retained as breeding herd replacements. A herd of 90 mixed age stags is run for velvet production. Progeny from the breeding hinds that are not required as replacements in the breeding or velvet herds are sold for slaughter. Most are slaughtered at 10-18 months with final culling of replacements at the two-year-old stage. Not all rising 2-year hinds are mated. The model is based on running predominantly red hinds in the breeding herd.

* Forecast at May 2000

The South Island deer model (MAF, 2000) was used as the base on which to examine the financial implication of addressing the major constraints to organic venison and velvet production. The assumptions and changes made in stock policy, production levels and timing of supply are considered in the next section.

In the construction of the organic South Island deer farm system, changes and assumptions were made to accommodate the constraints identified by the focus group including:

• Effective area: a quarantine area is required which reduces the effective grazing area by 2.8 percent (5 ha).
• Stocking rate is reduced from 11.86 to 9 su/ha. This lessens stress on stock and results in better animal health, growth and social behaviour, etc.
• Levels of venison production remain the same because of the lower stocking that reduces stress on stock giving better animal health, growth and social behaviour, etc. on the organic system.
• Reproductive performance is the same, as are the numbers of culls and deaths.
• In the organic system calves will be weaned later (May/June), compared with 75 percent weaned pre-rut in the MAF base system.
• A high proportion of adult stock aids animal health. Velvet production per head will be similar given the same feed level per head. The effect of compression acupuncture on subsequent velvet growth may be a factor that needs to be considered.
• Velveting will be carried out on organic properties based on non-chemical antler removal e.g. compression acupuncture anaesthetics.
• Slaughter dates maybe slightly later in the organic system, but have no effect on price.
• Grazing of outside stock: 100 cattle from another farm must be grazed for six months to control pasture surplus and maintain feed quality on the organic system (100 cattle for six months. 180 days @ 0.7 kg lwg/day = 126 kg lwt. Carcass wgt = 65.5 kg @ $3:00/kg).
• Less work involved with animal health. More work associated with controlling pasture, controlling weeds, and monitoring.
• Stock purchases: organic producers will want to source stock that is suitable for this system. As there is a small pool breeding for organic production, the costs may increase. Stock may also come from further away.
• No difference was made in the percentage of stock or product produced to BIO-GRO or CERTENZ specification. There is a small difference in the cost of the certification systems.

• Conserved feed: more supplements are made to control surpluses.
• Fertiliser: the chemical fertiliser used in the MAF base system will be replaced with RPR and elemental sulphur. Trace elements will be the same if reason their for use is shown. Liquid fertilisers will be used. More monitoring and testing will be needed to keep soil health up. Slightly less lime used. No change in costs.
• Pasture management as a result of the lower stocking rate will require more mechanical topping to maintain pasture quality.
• Organic deer farms are likely to have more shade and shelter trees.
• Organic forage and grain supplements are not easily purchased so will need to be made on the farm.

These changes, along with the cost structure listed in Table 10, have been incorporated into the organic deer model.

The organic system sells $31,800 of velvet. If a non-chemical, ethical method of removing velvet is not found or it is banned on philosophical grounds, this also changes the analysis. Velveting stags would be replaced with hinds, and breeding stags only would be run.

The financial results (Table 11) are based on the changes discussed above and the costs reported in Table 9.

Based on changes to the MAF base model and in the absence of grazing, the organic systems cash farm surplus is reduced by $228/ha. The reduced stocking rate drives this, rather than a drop in per head performance. A number of costs are the same even though stock numbers are reduced. These include wages, electricity, re-grassing, rates, sundry, repairs and maintenance, and administration. To maintain pasture quality in the organic system, however, additional grazing must be included in the spring and summer to maintain the viability of the systems. If the value of grazing is included then the organic system returns improve by $109/ha.

Grazing is based on using young cattle (yearlings). Venison price per kg under an organic system would need to be an additional $2.11/kg (a 29 percent premium) to achieve the same value as the MAF model venison sales. This provides an indication of the premium required by the organic system in the absence of grazing income to generate the same gross farm income generated by the MAF base model. If grazing is included in the income of the organic system, the premium required drops to $1.03/kg (a 14 percent premium).

Velvet would need to be an additional $17.25/kg (a premium of 20 percent) to achieve the same value of velvet sales.

This is a guide only, as each farm needs to do its own analysis of returns under an organic system.

The additional costs between BIOGRO and CERTENZ are insignificant and the production is assumed to be the same.

Reducing the stocking rate will reduce stress not only on the animals but also on the operator. Time originally spent on administering animal health may now be taken up in non-chemical ways of reducing weeds.

No account is taken of the expected environmental improvement under an organic system resulting from the lower stocking rate and the lower levels of chemical use. Existing organic farmers also appear to have a greater goodwill factor from the wider population that organics is a "better" way to farm.

Contact for Enquiries

Kay Brown
Sector Performance Policy
MAF Policy
Ministry of Agriculture and Forestry
PO Box 2526
Wellington
NEW ZEALAND

Phone: +64 4 894 0695
Fax: +64 4 4 894 0746
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