Velvet farming beats dairying in c/kg feed consumed

May 2010

The velvet selling season has ended with operators satisfied that an orderly selling process has ensured good prices, and confidence that this progress can be maintained in the future. Season average indications: SA and A grades av $108-110, Chinese grades av $117, (RG1&3, Sp1, Man1). Much less velvet yet to be sold than in previous years. Specialist velvet operations are once again producing the top c/kg feed consumed earnings in livestock farming, ahead of dairy according to a presentation at the recent NZDFA conference.

The target price of $100/kg for a Korean mix has been achieved. While production per head is increasing on farm, this years industry volumes are estimated to be about 400 tonnes, with the road buyers claiming to have secured half that. It is also believed most of NZ's competitors are reporting falling production, which should help maintain these existing prices.

The new NZVM company reports good farmer support, and their VSM marketing option has proved poular, as farmers take a season's perspective rather than trying to guess highs on the spot market (third payments have been made bringing total paid so far to $63/kg). This is still a long way from spot market prices, especially in today's cash-hungry economic climate, but sales and contracts are 88% sold or committed and on schedule for a June completion.  NZVM is urging farmers to have a medium-term perspective if they want to create stability in prices further out, and enable the business to grow and be sustainable.