Farmers Weekly - Trade Talk April 2016
14th April 2016
I once read a piece about financial economists who have to have an opinion and make predictions on their chosen subject simply because that is their job and people ask them. If people didn’t ask them they wouldn’t need to have an opinion. Well, we as livestock auctioneers are in the same boat, we think about past events, trade, trends etc, mix them up with our predictions and the result is a forecast for the price of lambs, cattle etc - because people ask us! But do we really know? Well we may be better than most at forming an opinion because we possibly have plenty of information to hand and we are “in amongst it” all the time but I sometimes think it would be nice not to be asked and not to have to put your head on the block.
Disregarding all complicated data I find that how much money is going round is as good an indicator as any to predict trade. Store cattle faltered early in the year and I proffered it would improve as delayed Single Farm Payments filtered through irrespective of what the prime trade is doing, well you can say trade for store’s has improved. If farmers have money in their pockets, they spend it. But that’s no indicator for the trade of the finished product which ultimately is what we rely on whether selling store or fat.
The strength or weakness of the pound is usually a good pointer and the recent weakening seems to have been one of the factors helping the prime sheep trade since late last year, but in November 2014 the pound strengthened as did the trade – Mmmm, I’ll have to think that one through again.
New Zealand lamb imports are always a talking point with some people aggrieved at their arrival on the market. I don’t have a problem with this, we like to export so we’re not in a position to complain. Also, this island has been importing food for centuries, it’s business, that’s what makes the world go round.
Rounding off, none of us know what the future holds with so many global factors in the equation so the advice I often give is to farm the stock as best as you can and sell it when it suits you whether that’s for financial, feed or housing reasons then at least your goods are right when they go to market.