Jul 19, 2024
Branded Four Seasons venison was promoted recently at a retailer distributor event, resulting in placement in a 17-outlet supermarket chain on the US east coast.
Venison companies are focused on extracting maximum value from the US market, following the launch of the SFF Futures co-investment project, alongside their other marketing work in the EU and Asian markets. While demand is steady, challenges continue. It is still early days, but exporters report that farmgate prices are expected to build on last year’s stability.
The North American project builds on work that started in 2020 to pivot venison sales to US retail customers, following the severe impact on foodservice during Covid. The US now accounts for around 39 percent of the returns from venison exports and returned around $59 million in export value in the year ending May 2024.
“The aim is to continue to expand the range of products to the affluent consumers of the North American market,” explains Alliance Group sales manager Katrina Allen.
“This market offers year-round sales and good growth potential, so the timing of this project is perfect for the rebuilding of the industry,” she says.
The US offers “year-round sales and good growth potential,” says Alliance sales manager Katrina Allen.
“Elk sales to the North American market continue to gain momentum with good signs that this niche market can grow into an important year-round revenue stream,” she notes.
There is a positive outlook for the overall 2024-2025 season for venison, says Allen.
“While the talk will always fall back to the shortages caused by lower deer numbers, it does provide the perfect environment to commit to, and establish, more niche markets,” she believes.
“New Zealand farmed venison is a unique protein choice and the push will be towards those who respect this and can celebrate its benefits compared to other proteins on offer.”
Good early demand for chilled venison in Europe
Around 28 percent of export value today is derived from Europe, where chilled venison volume and pricing discussions have also just started with customers for most exporters. While still early for marketers to confidently come out with indications of the farmgate contract prices they will be offering deer farmers this year, good demand is being reported.
While there are obvious concerns around the constricting supply, Allen says Alliance’s focus, “will be on supporting our in-market partners who understand the importance of offering a safe, consistent product, specifically raised for this market, and who are able to extract maximum value so as to gain the very best returns back to our farmers.”
Duncan NZ’s Rob Kidd says there’s been strong demand from European game season buyers this year.
Duncan NZ agrees there’s strong demand from European game season buyers to secure supply, says general manager marketing and operations Rob Kidd.
“It appears Europe now understands there is likely to be less supply available.”
Kidd expects negotiations will conclude with Duncan NZ’s customers later this month. From those early discussions, he sees the outlook for this season’s chilled EU prices, “being at least as good as last year, if not a little better.”
He’s “not surprised by the good level of demand,” but he is, “realistic that the law of supply and demand will not work as simply as we might hope. The price and availability of competing proteins, such as European wild venison, will all impact the price.”
EU retailers and the foodservice sector remain very price sensitive, Kidd noted: “as they look to ensure they have products they can move and make a margin on”.
One of Duncan NZ’s large German retail customers has decided not to stock game meat, including venison, this season, “as they are actively seeking cheaper non-game protein options.”
That shows him, “alternative proteins, priced more attractively, are key to shelf-space at retail level. We will be investigating this further on an upcoming market visit and paying close attention to see if this is just one retailer’s approach or possibly a wider European trend.”
All this tells Kidd, “We are right as a company and industry to continue to build demand in the non-EU markets such as North America and Asia/China.".
Global growth expected for venison
Globally, petfood items – offals and bones – along with deer skins are experiencing “generally steady demand.” That’s another positive for Kidd, “given the turmoil surrounding other meat species and suggests these speciality deer items are achieving some good differentiation.”
Having said that, Duncan NZ’s still keeping a wary eye on its co-products for the Asian market.
A lack of 20-foot containers, due to shipping supply chain disruption around the globe, and the threat of strike action in both US and EU ports as imports increase again, is adding to the now lengthy list of challenges for meat exporters. These include lower deer numbers, the impact of cost-of-living for consumers around the world, armed conflicts in Ukraine and the Middle East, elections for key trading partners, port congestion, port blanking and container stock imbalances increasing.
Despite these challenges, venison has bucked the overall trend for red meat, with the Ministry for Primary Industries (MPI) latest Situation and Outlook for Primary Industries (SOPI) projecting a rise in venison export value of 10 percent in the year to around $200 million in the year to end 30 June 2024.
Venison’s market diversification is expected to push deer industry growth further, with SOPI forecasting venison export revenue “to lift by a further nine percent in 2024-2025, with demand potentially exceeding supply.”
National published farmgate prices have averaged $8.70 per kg – above the five-year average – in the year to 30 June 2024, SOPI notes, and MPI is expecting them to “remain stable in the medium-term”. These have dropped back a little this week, as expected for the time of year, to around $8.61/kg.
Last year, deer suppliers for the chilled venison market niche received contracts from their processors at prices ranging upwards from $10/kg, rising to around $10.30-50/kg at the September peak.
