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Summary of full report
November 2000
RIRDC Publication No 00/172
RIRDC Project No DIA-2A
Executive Summary
The future of the Australian deer industry is dependent, at least in part, on the development and maintenance of stable domestic and international markets for Australian venison. The Australian deer industry’s most important output is venison (if there is no commercial market for venison, the collection and processing of other commodities in isolation is unlikely to be profitable while the industry is more likely to be able to survive if there is a profitable market for venison and other products are unsaleable).
The marketing of Australian venison has evolved principally through individuals and companies identifying opportunities for profit from the sale of venison. From the beginnings of the industry in the 1970’s until the mid 1990’s those involved in purchasing animals, contracting their processing and selling venison produced was relatively profitable.
Venison market research and development work undertaken by Lynelle Tume combined with promotional information produced during project work during the early 1990’s helped expand market opportunities for Australian venison and encouraged interest in venison marketing and an increase in the number of groups involved in venison marketing.
However most of those involved in the international and domestic trading of venison had little or no capital and financial infrastructure and support and farmers only received their payments after product was sold. The lack of infrastructures meant that most trading of venison could only be described as selling rather than marketing as little or no investment was made in the development and maintenance of trading markets.
Until the mid 1990’s, the Australian venison industry has generally targeted European markets that are competitively supplied by the world’s biggest producer of farmed venison, New Zealand.
Downward pressure on international prices caused by within industry competition for market access led to decreasing farmer returns, an increasing time between sale and payment and continuing production of poor quality stock.
Both venison and velvet prices declined sharply in 1998 and in response to this the Deer Industry Association of Australia (DIAA) and The Deer Industry Research and Development Advisory Committee elevated the priority of market development research from its seventh to its second rated priority.
Both groups recognised that the stimulation of sustainable market demand for venison had been frustrated by a number of issues including a lack of continuity of industry programs or campaigns to assist market development. The recognition of these issues led to support for this project to investigate and initiate European venison market opportunities that would increase and help stabilise farmer returns and subsequently encourage the expansion of the Australian industry.
The project has assisted the initial negotiation of commercial, potentially long-term venison marketing business relationships between Australian deer farmers and a European venison marketer. An initial shipment has been made and negotiation of a second shipment is almost complete. The European client identified by the project has indicated their interest in obtaining venison from the Australian industry during periods of traditional annual demand downturns. Provided negotiations with the selected European partner continue to develop and reach a satisfactory end point, this market outlet will contribute to the stability of demand and price for Australian quality assured product across normal supply cycles.
Information gathered by the project has also demonstrated that clients do exists who are willing to purchase venison directly from international suppliers rather that through traditional importers. These importers suggest that they are concerned about the dominance of venison importing by traditional venison importers and the obvious control that the dominance imposes over their own businesses. However, the ongoing development of this commercial opportunity and establishment of mutually acceptable business relationships must be undertaken directly between the project partners and in a commercial environment unfettered by inefficiencies imposed by reporting requirements of this RIRDC project.
Further, the RIRDC project DIP-3A reported that venison consumption in Australia appears to have remained stable and that available information suggests that a significant percentage of venison that is consumed is imported from New Zealand.
In the short term Australian venison marketers are unlikely to have the financial ability or profit incentive, compared to immediate opportunities from international markets, to compete with New Zealand venison marketers in the development of the Australian domestic market. Industry managed projects similar to this project that aim to investigate and develop ‘niche’ domestic market opportunities for Australian venison based on regular supply of quality assured product appears to offer new market opportunities for the Australian industry.
Objective development of domestic market opportunities and control of supply to those markets that ensures consistent availability of quality assured products should improve returns to farmers and rebuild domestic consumer confidence in the Australian deer industry. If the industry is unable to quickly develop market outlets for its products that give price confidence to its farmers, its immediate future is in doubt.
The ongoing development of opportunities identified by this project should give farmers improved confidence in the availability and accessibility of new markets and subsequently encourage confidence to investing in the Australian deer industry’s future. Farmer contracts that result from this project will encourage adoption of the industry quality assurance program by rewarding those who produce to specifications and penalise those who do not.
 
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