A "massive" fall in the venison kill in the first quarter of this year is creating some major issues in both processing and marketing in the industry.
Addressing the deer industry conference in Dunedin yesterday, Deer Industry New Zealand chief executive Dan Coup said the retention of hinds was great for the industry long-term, but it created some "short-term headaches''.
Last year, there were a lot of hinds killed but, in the first three months of this year, that had turned around quite drastically''.
Farmers started holding back a lot of animals, particularly hinds, which should get the industry on the recovery track following declining numbers.
However, it created some major headaches in venison processing and marketing structures, including issues in markets with continuity in supply, Mr Coup said.
Marketers were having to make some tough decisions "on who gets product and who doesn't'', he said.
DINZ board member Dean Hamilton, who is also chief executive of Silver Fern Farms, said the severity of the reduction had "caught everybody a bit by surprise''.
Everyone was now struggling with whether it was a short- or medium-term issue and it appeared it would continue for at least the next 12 months.
Silver Fern Farms processed about 40% of New Zealand's venison and, as a significant processor with multiple plants, it needed to look at how to handle the reduction.
Some weeks, the kill was half what it traditionally had been and it was very challenging in a fixed-cost business such as processing.
While he did not anticipate plant closures, it would depend if the cuts went deeper. There might be issues with staff retention and that would be challenging if the company started losing skilled staff.
In-market, the company was ultimately trying to create a series of year-round client relationships. It was having to drop customers it had supplied for many years.
The real worry was the consumer; the challenge for the industry was how to maintain consumption when it had to drop customers, Mr Hamilton said.
Fellow board member Danny Hailes, who is company secretary at Alliance Group, said the shortfall in supply was having an impact in terms of how the company operated its plants.
Alliance Group, which processed 30% of venison in New Zealand, was looking at what it did to cope with that, including configuration of shifts.
It was a "real challenge'' to keep customer confidence up.
"One of the things ... customers like is continuity of supply. If they can't get product, they start looking around elsewhere. We need to continue to work closely with customers and make sure they stick with us,'' Mr Hailes said.
Looking forward, DINZ chairman Andy Macfarlane said success in the deer industry would come from a "culture of discipline'', including adhering to the industry plan, which would come under pressure if product was restricted or traditional supply chains were challenged, and good communication.
Industry communication had improved dramatically in recent times but still needed to be better.
While there was a "hell of a lot of work to do'', results were starting to come through. The industry should be on full alert but, he believed, the opportunities outweighed the risks.
Science and technology was needed "to move us into a different space'' and those in the industry needed to trust each other.
The industry collectively needed to be tenacious and collaborate to realise the opportunities, Mr Macfarlane said.
The conference concludes tomorrow with a field day at AgResearch Invermay, hosted by the Otago branch of the Deer Farmers Association.
