19 Dec 2011

Deer velvet price drop blamed on 'free-for-all'

1:53 pm on 19 December 2011

A deer velvet co-operative has blamed falling prices on the fragmentation of the trade after the collapse of a marketing partnership earlier this year.

Velvet Marketing Limited, set up with three partners about two years ago, was handling about two thirds of New Zealand's antler sales to South Korea and China - the dominant markets.

The ProVelco Co-operative, operating then as Velexco, was one of the partners.

ProVelco general manager Ross Chambers says with the disappearance of that structure, the market disciplines of the past two seasons have gone out the window.

He says there's been a resurgence of independent brokers and a free-for-all approach, with price undercutting.

As a result, farmers are being told to expect 10% lower returns and prices are being offered at $15 a kilo lower than opening sales.

Mr Chambers says more structure is needed in the marketing of velvet to give price stability.