Andrew Swallow
Deer farmers have wealthy people’s pampered pooches to thank at least in part for an unprecedented period of $10-plus venison schedules.
At a field day for suppliers to Canterbury-based processor Mountain River last month several in-market distributors referred to the growing demand from pet food manufacturers and how it is driving values due to increased competition for a limited supply.
“Pet food has always been big but never as big as it is now,” Angus Cleland of Mountain River’s California-based joint venture, Terra Pacific Marketing said.
“People will spend pretty much whatever it takes to purchase the best food they can for their dog or cat… That’s put a lot of pressure on supply. They can pay as much as the food trade can.”
Venison is seen as a natural, high-quality, lean snack in the pet industry which appeals not only for its nutritional values but because dog owners in particular think it’s something their animal’s ancestors might have eaten.
One NZ business supplying that market is Pasture Petfoods, Waipukurau. General manager, Alastair Kendon, told the field day sales of all pet food categories have grown 34% in the past six years, from US$58 billion to US$78b.
‘It’s fantastic they’re no longer eating their pets.’
“There are not many industries that can match that growth.”
In Europe and especially the United States, market growth is value more than volume-driven. Meanwhile, volume plus value has made Asia the “fastest growing market out there,” Kendon said, quipping that “it’s fantastic they’re no longer eating their pets!”
From 8% of Asia’s households having a pet today, it’s forecast 13% will have one in five years, an increase equivalent to the total number of pets in North America, he said.
Pets are now often referred to as “companion animals” with some families spending more on petfood than they do on food for their own children; that’s if they even have children: there’s a growing trend for young couples to get a companion animal instead of having a baby, Kendon said. There are even pet restaurants, resorts and nail salons to take their companion animals to.
“It is a little crazy!”
MDM – mechanically deboned meat, also known as mechanically recovered meat (MRM) or mechanically separated meat (MSM) – is important in the sector as it can be listed as “meat” in ingredients, a key word customers look for.
Offals are also sought as they raise the nutritional content compared to grain.
Kendon said pet food manufacturers can pay high prices for such ingredients because depending on the market, labelling laws allow them to brand products as venison-based with as little as 3%, though 18-19% inclusion would be more typical. Consequently, a little goes a long way.
However, he warned farmers at the field day that he believes current values for offals and MDM are near their limit and that “we should be mindful what goes up can come down very quickly.”
That said, New Zealand’s farmed deer industry means it has a unique ability to supply traceable product for petfood in volume that other countries can’t match.
He later told Country-Wide pet food demand for sheep and cattle products is booming too, though in those sectors there’s more international competition.
Mountain River marketing manager Jon Sadler says he’s calculated pet food demand has added about a dollar to schedules and while values are unprecedented, pet food booms and busts are not.
“It’s happened a few times in my career.”
DINZ’s producer manager, Tony Pearce, says venison schedules did top $10 briefly at the peak of the chill season in the late 1990s but the current run is “uncharted territory.”
Key points
- Pet-food factor
- Adding about $1/kg to venison schedules.
- Increased competition for limited supply.
- Not just traditional MDM and offal ingredients.
- Deer seen as ‘natural’ for carnivorous pets.
- Other meat sectors benefiting too.
