Livestock Market Update: Velvet market showing good signs for deer farmers
Velvet sales meeting good demand amid disruptions
Although venison sales are severely impacted by the Covid-induced global closure of restaurants, the velvet market is providing deer farmers some confidence.
By volume PGG Wrightson’s velvet sales this season are 20 per cent ahead of 2019/20. While prices are around 15 per cent back, improved production means most deer farmers are receiving much needed cashflow.
Historically, six to 12 months after the 2003 SARS pandemic, velvet sales rose markedly, based on the value Asian cultures place on its capacity to boost immune function. Growing demand for deer velvet is again indicated. In addition, velvet is finding increased use as a healthy food ingredient, reducing reliance on practitioners mixing it into prescribed medications, shifting the focus to finished, branded, easy to consume products such as extracts. These products can be readily obtained online, helping the deer velvet market overcome lockdown disruption.
Due to strict rules around removal, hygiene and safety of deer velvet, New Zealand producers sit far ahead of competitors in China, Russia and North America. New technology coming this year via UHF chipped tags and paperless recording will further enhance traceability and provenance.
Demand is keeping pace with increased production: from the same or lower stock numbers, deer farmers are achieving better results in quality and weight, and positive market trends should boost further returns. That said, velvet is a specialised product with passionate farmer growers who respect the systems and importance of animal welfare. Seasonality increases product pressure, meaning funding is required to keep returns afloat.
PGG Wrightson, alongside larger, loyal suppliers, has used minimum price contracts to underpin prices for the last three seasons. Relationships are the key to future growth, especially in healthy foods: PGG Wrightson is seeking partnerships in this sector in South Korea and China.