Silver Fern Farms chief executive Keith Cooper said in a letter to shareholders that deer farmers had some tough decisions to make given that expansion and held their destiny in their hands through which company they suppliedwith deer.
Mr Cooper urged farmers to consider who they sent stock to, saying while it was everyone's right to supply who they wished, a procurement battle at the farm gate did not translate to long-term market stability and sustainable prices.
"Deer farmers themselves have to make some hard decisions. We are witnessing the fragmentation of our industry.
"We are witnessing a proliferation of exporters who will not have the volume or scale to seriously invest in the market or in advanced processing technology."
While prices had exceeded what was forecast, trade in venison was minuscule and therefore more vulnerable than other meat protein.
"The experience of 2001 convinces us that venison producers and current exporters all need to work together to avoid a similar scenario."
There were similarities with 2001, "with economies slowing and Brazilian beef hoping to regain access to the EU market".
Mr Cooper said new processors and exporters would not only compete for declining deer numbers, but they had not invested in the market structure and promotion which had helped that recovery.
"We now see entrance of other players to the venison exporting sector who have not invested in the market structure."