April/May/June edition of the Deer Industry News. Article by Ali Spencer, Deer Industry News writer.
In the article, Ali Spencer writes that the Covid-19 disruption and, most recently, the conflict in Ukraine are presenting hurdles all the way along the cold chain for exporters. She notes they are having to nimbly find solutions for complex logistics challenges to make sure they can meet the strong recovery in demand for New Zealand venison as food service reopens around the globe.
John Sadler is quoted and notes that Mountain River Venison’s US customers “have struggled to have a cool chain to suit chilled venison.” As an exporter, this is now about fitting the production schedule to shipping, not the other way around as previously, especially for airfreight. “If you book the space, you have to pay for it and use it,” he notes.
“All of these things have more than one cause. It’s all about finding solutions, but that’s not without cost.”
Freight rates have, in most cases, more than doubled, but even so, most companies are considering airfreight, especially for high-value chilled venison. This ensures that the chilled product gets to customers on time and is not held off port waiting for offload and consignment.
There has been a doubling of the order period from the typical 2.5 months to over 4.5 months.
Business uncertainty around the risk of disruption
John Sadler notes the uncertainty for businesses is around the risks of disruption. “The challenge is getting the returns up, and that takes time. We want to make [the sector] more sustainable.”
The “unpredictable constant” and recently helpful for the New Zealand venison business is the exchange rate, with the New Zealand dollar staying under 70 US cents. However, the war in Europe has weakened the euro.
Shipping lines are operating three-monthly rather than on annual contracts, with rates rising at each negotiation. Sometimes overnight, shipping companies decide to drop New Zealand port visits without consultation to catch up on sailing schedules.
In addition, with shipping containers misplaced all around the globe, venison exporters are being pushed to use 40-foot containers, at a significantly higher cost, as opposed to the 20-foot containers, which were most efficient for bulk packing of ground meat.
Confidence in the outlook
Despite the hurdles, exporters are still getting venison to the destination, where reopening of markets is ensuring good demand. As a result, all were confident about the outlook for venison.
Business is “flowing really well” for Mountain River in Scandinavia, which largely reopened earlier this year.
The spread of markets has reduced potential exposure and is ensuring stability as the sector moves towards the 2022 game season.
Grass-fed meat, including venison, could potentially get a boost with anticipated increased grain prices. These could come about through unplanted Ukrainian wheat fields, Russian wheat subject to sanction, and grain being diverted from animal feed for human consumption.
But there are negatives too. For example, snap Covid-19 lockdowns recently imposed in Shanghai and Beijing add another “layer of uncertainty,” says John Sadler.
Despite the volatile market and the need to move to stability, the outlook remains positive. Venison is a product that people want and is helped by the underlying demand for protein and its niche positioning relative to other proteins.