Buoyant deer farmers wary of currency

Deer farmers are eyeing increased profitability this year but have been warned not to rely on a low kiwi dollar reports Rural News. The NZDFA says venison producers have enjoyed good returns this season and the outlook for venison is encouraging. However chairman Bill Taylor says deer farmers must be aware of the effect of the weaker currency and the danger of continuing to rely on its low value for continued prosperity. "˜I'm confident, however, that the lower volumes of venison and velvet that will be produced this year will mean improved farm returns.' Venison production for the 12 months ending December 2008 was 591,000 deer, 6% down on 2007 and the industry expects a further drop in production this year. Venison exports last year reached $316 million, up $95m or 42% on 2007 despite similar volume of exports. The higher return was a result of higher market prices and a depreciating NZ dollar against the major trading currencies. The national average venison schedule last month was $8.42/kg, 26% above the same time last year and 66% above the 10-year average. However, the recent currency appreciation is expected to reduce the schedule.The NZ dollar appreciated 14% against the US dollar and 10% against the Euro through March and the first week of April. The industry estimates that every 1% increase in the NZ dollar shaves between 10-15c off the schedule. According to Taylor, the challenge facing deer farmers  will be growing the profitability and sustainability of the business without making too many of the mistakes of the past."˜I challenge farmers to take a more lateral view of how to sell their product,' he says. "˜The take-it-on-the-day auction system or cash at the gate for velvet, and playing one venison processor off against another for a small extra schedule on the day, must belong to the past.' Germany remains New Zealand's most important market, earning $114m in direct exports.