Deer farmers who specialise in velvet production are on a winning ticket at the moment.
Photo: 123RF
Prices for the antler product, used in Asian traditional medicines, have lifted by about 25 percent on a year ago, continuing what is believed to be an unprecedented six-year run of rising prices.
Deer Industry New Zealand's chief executive Dan Coup said that was unusual for a trade that's got more of a reputation for being volatile.
'If you had a good year it would be followed by a bad year, and the other way round, so six years of stability, or in fact firming, I think would be unprecedented, and it's certainly very welcome.
"Our exporters have quoted numbers for the season just gone and are talking about $125 per kilo average for velvet, so that would hide some higher grades of velvet getting substantially more than that. That's more than we've seen for the past few years, for sure."
Mr Coup said the rising demand from China had played a major part.
"The industry used to be heavily reliant on South Korea. Now there are really significant exports to China and Hong Kong, as well. The other factors are that some of the other velvet producing areas, particularly North America and Russia, are probably reducing their production, so there's some global dynamics going on.
"But then the population in our target markets, in Northern Asia, particular China, are becoming progressively wealthier and able to afford what are effecively luxury products a lot more frequently, so we think there's growing demand there as well."
He said the deer industry thought most velvet exports were now going to China, but a lot of unprocessed frozen velvet sent there was being processed for re-export to Korea, which remains the biggest consumer of New Zealand velvet.
Mr Coup said velvet makes only about 10 percent of income for the average deer farmer, but that rising prices would provide a little bit of compensation for farmers who have seen no improvement this year in the low returns for their biggest earner, venison.
Although prices and demand for venison have picked up in the main European markets, exchange rate movements from the fall in the euro have prevented the benefits of that from flowing back here.
