Deer finishing tops livestock gross margin analysis

Returns from the country's venison breeding and finishing options are robust compared to most traditional farming enterprises currently, although this needs to be viewed cautiously as key markets come under some pressure in the recessionary climate reports Scoop. Southland farm consultant Graham Butcher from Rural Solutions has produced benchmarking data to update his 2008 comprehensive gross margin analysis, which rates current relative profitability across all major NZ farm enterprises. This is an in-depth and balanced way for farmers and their financiers to objectively evaluate land use. Based on a Southland model, the analysis compares bottom lines by taking all of the direct expenses associated with each enterprise type into account. The assumptions, which have also undergone rigorous input from deer farmers, can be applied across NZ. The most profitable land use options in this Southland-based system are the high powered early chilled season venison finishing enterprise at 25.2c/kilogram dry matter (kg DM) consumed (assuming peak season average prices are maintained at $9.00/kg), followed by typical Southland summer lamb trading, at 21.6 cents/kg DM consumed. This is closely followed by the more conservative venison production options. The finishing weaner red deer option is currently returning a conservative 19.6 cents/kg DM consumed (at $8.50 average schedule and a $5.20/kg ingoing weaner cost). Wapiti terminal sire breeding and heavyweight early finishing is behind at 18.8 cents/kg DM, while red deer velvet at industry average production and seasonal averages around $61/kg is returning 12.1 cents. Dairy is still viewed as the next most profitable enterprise behind deer farming enterprises, although comparisons are currently difficult due to the rapidly changing NZ dairy farm cost structure. An established dairy returned 15.0 cents/kg DM at the end of last year, and 11.9 cents for a recent Southland dairy conversion. Bull beef is returning 9 cents/kg DM, and this was followed by dairy heifer grazing as the next most profitable enterprise in New Zealand as at June 2009. Breeding ewes at 140 percent, 50 percent hogget mating offered the best sheep farming returns currently, at 10.9 cents/kg DM, then breeding ewes with no hogget mating followed by hogget grazing and store ewes at 8.4 cents, and winter lamb trading at 6.4 cents.