A cost‐benefit analysis of the value of investment in a wapiti hybridisation research programme and the returns to New Zealand venison producers

Abstract

Between the mid 1970s and the end of the 1980s a research programme evaluated hybridisation of red deer, initially with wapiti‐type captured animals and then with purebred wapiti imported from Canada. The cost of the research programme in 2001 dollars was $7.2 million. By 1980, the deer industry had begun introducing wapiti genes into farmed red deer herds. In 1990 wapiti hybrids accounted for approximately 5% of deer slaughtered for venison in New Zealand. By 2001 that figure had risen, possibly to as high as 50%. Due to their rapid growth to target slaughter weights, wapiti‐red deer hybrids have a greater potential than red deer of the same age to reach suitable weights in time to attain early season price premiums. Furthermore, the liveweight advantage of hybrid weaners over red deer has historically given them a price advantage at time of sale. Wapiti hybrids contributed a net present value (NPV) at 7% discount rate of $10.3 million to the New Zealand venison industry up to 2001 (internal rate of return (IRR) 13.4%). Based on MAFPolicy projections of numbers of animals slaughtered, the NPV (7%) is expected to increase to $23.6 million by 2006 (IRR 17.6%).