Executive Summary

General
Following speculative days of the 1980’s during the two years from July 1999 to June 2001 the Australian deer industry experienced its most profitable and commercially successful period. However since 2001 the industry has endured more difficult times.

Although the 2001/2002 season saw record average venison prices the Australian industry was unable to exploit prices fully because it simply could not supply any more animals to the market. The 2002/2003 season provided two major difficulties for the Australian deer industry. One was a significant increase in the relative international value of the Australian currency that effectively meant international clients paid less Australian dollars for venison it purchased from Australia. The other was the extensive drought that meant a lack of feed available on most properties and very high prices of supplementary feed. As a consequence, many stock were underfed and production costs rose sharply.

There were about 6,000 more fallow deer processed during 2002/2003 than were processed in 2001/2002 while the number of red deer and rusa processed remained constant. Despite the increased kill, the total weight of venison processed in the 2002/2003 year was similar to that processed in 2001/2002 which reflects the lower average carcase weight of all stock processed which in turn reflects the lack of appropriate feeding caused by the drought.

Venison
The average price farmers received for venison during the 2002/2003 financial year was significantly lower than average prices received during 2001/2003. In fact, prices received during 2002/2003 were lower than at any time during the past five years. In 2002/2003 the price for venison fell dramatically from an average of $4.24 to $2.11 per kg hot carcase weight, a direct reflection of the appreciation of the Australian dollar and the depressed German economy.

The future venison prices is uncertain while the German economy remains depressed and the value of the Australian dollar remains high relative to other international currencies.

The number of stock processed in 2002/2003 was higher than previously estimated and this probably reflects unplanned sales, probably destocking, that are a direct result of the widespread drought coupled with the lowest venison prices realised by farmers for at least five years.

Many small farmers are unlikely to be able to continue if venison prices remain low and production costs relatively high so the national herd is likely shrink again.

This unexpectedly high number of stock processed, the likely low reproduction rate resulting from the drought and the likely reduction in the national herd size suggests that the number of stock available for processing in the next two or three seasons is uncertain but will be less than the number processed this season.

Despite the obvious effects of the drought, the percentages of deer processed that have carcase weights less than ideal hot carcase weight is a continuing cause for concern. Consumers still expect a consistently high quality, uniform product and will only pay premium prices for product that meets their specifications. Management of stock to produce ideal carcase weights that meet market specifications should be reflected in Industry extension programs aimed at improving average returns to farmers.

Velvet Antler
Velvet antler production in the 2002/2003 season was a little less than that recorded for the previous season The Australian Deer Horn and Co-Products Company (ADH) collected, graded and sold about 15 tonnes of fresh velvet in the 2002/2003 season out of an estimated total of 25 tonnes produced by the industry. ADH continues to be a major player in the Australian velvet industry, managing the collection grading and sale of approximately 60% of the Industry’s velvet.

Of immediate concern for velvet antler sales is the well document risk of war between the USA and North Korea. As Korea is still considered the country that has the greatest influence on velvet demand and price, any conflict is likely to have a significant, long-term detrimental impact on velvet antler sales.