“We are looking to shift velvet out of the commodity trade of the past and into a new era, where velvet is used for premium, contemporary nutraceuticals and health foods, ultimately returning greater value all the way down the value chain to the farmgate.”
Changes in legislation
Deer velvet was previously exported to China under the requirements for traditional Chinese medicine, with the majority exported frozen.
In 2023, Chinese authorities advised that going forward, only dried deer velvet could be exported to China, as it met the requirements of domestic traditional Chinese medicine.
“Under the new trade protocol, frozen velvet can now be imported into China under a different designation, which is as an ingredient for further processing.”
The majority of the processing plants are in north-eastern China.
Some small changes were required to processing plants in China to bring them up to speed under the changes to the Chinese regulations, but these were all in place before market access restoration.
Griffiths said consumer demand for NZ velvet had remained consistent over the past few seasons, though growth in demand had slowed post-Covid, when health and wellness products experienced a boom.
“The [Memorandum of Understanding] we have signed with our Chinese partners in the last year or so will lift demand, or that is the plan,” he said.
“But the impact of these will take a bit of time to reach NZ producers in a meaningful way, as the companies need to develop products and figure out marketing.”
The NZ deer industry already has stringent hygiene and quality assurance programmes, backed by audits, in place and has for years, so there will be no change for farmers there.
“Where the shift may come will be from the desire for the Chinese market to buy smaller velvet, both from the healthy foods and the commodity markets, as it is more valued in [traditional Chinese medicine] , versus the larger velvet that has traditionally gone into the Korean market.”
Showcasing NZ velvet
Showcasing NZ velvet as a hero ingredient in marketing materials is already happening in South Korea and has been a point of difference in the South Korean market in recent years.
“In China, where we have been in the commodity markets for longer, we are starting to see the brand value of NZ velvet, backed by top-tier farming practices, with quality assurances and traceability systems all the way to market, really take off.
“These systems were a big part of what attracted the Chinese companies to sign the [Memorandum of Understanding].
“Our partners in South Korea have invested significant funding into research on products they’ve made using NZ velvet, some of that money being spent here in NZ.
“We expect that our Chinese partners will follow a similar path.”
Mark McCoard is chair of the NZ Deer Farmers Association (NZDFA) Executive Committee and a Taihape deer/velvet farmer.
McCoard is in the position of being able to view the MOU from an executive role in the industry and a deer farmer producing velvet.
“Having established partners in any market, with reliable channels to the end user through trusted brands, plus the money to put into marketing, that can only be a good thing.
“In saying that, as those partners put the hard work of NZ farmers to work for them through marketing and premium pricing, we would certainly hope to see some of that added value find its way back to behind the farmgate.”
As a deer/velvet farmer, McCoard feels this is a step in the right direction, towards a more credible market and greater value for our velvet, though he says the more immediate focus is on the short-term and prices for the coming season, as the MOU will take a bit of time to gather steam.
“If I can just put my NZDFA hat on for a second, it’s also good news for the future of the industry,” he said.
“We are creating avenues to long-term partnerships with credible in-market players, and that provides a more profitable, sustainable future for the deer industry, which in turn gives people confidence to enter and grow the industry.”