Stags on a deer velvet farm in North Canterbury Photo: RNZ Maja Burry
Velvet farmers are having a horror season with prices back 20 percent on last year - meaning some are selling at below the cost of production.
This year, the industry and government officials fought for access to the vital Chinese market - after China changed import requirements - locking New Zealand frozen velvet out.]
Access was restored in October.
But Deer Industry New Zealand chief executive Rhys Griffiths said with all the uncertainty a major buyer in China stock-piled product, flooding the market pushing prices down.
"On 31 October, MPI notified us that we had clearance to export but less than 24 hours later we heard a report of a major buyer up in China starting to offload excess stock that they'd taken in.
"The buyer thought there was no way that New Zealand and Chinese government officials would be able to restore market access so quickly so they'd bought up a lot of velvet."
Griffiths said due to the flooded market, prices are back by about 20 percent which means some farmers will not make a profit this season.
He said some are holding onto product rather than accepting the lower prices while other companies are selling at the lower price.
"It really comes down to cashflow, I can completely understand where people may have had to offload product, sometimes it's a long time between cheques.
"But I am hearing that people are being offered prices below the cost of production which is unacceptable so some farmers are keeping product in the freezer until prices rebound.
He said while there are headwinds this season the outlook for velvet does remain positive.
"The annoying thing is that demand for our velvet in China and South Korea is really strong, it's simply a supply and demand issue at the moment.
"We're hearing at the retail end that people are still consuming New Zealand velvet for all it's amazing qualities so we know things will turn around."
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