Trade Talk by Iain Soutar FLAA
19th July 2016
It's a bit of a strange position to be writing this on June 17, knowing that by the time it's published the EU referendum will have taken place and things could be very different (or not!).
Farmers who have large farm payments will probably be particularly nervous, but I'm sure that in their hearts many feel that they've had enough of EU bureaucracy and all its rules and inspections. Whether any of this will change if we decide to opt out is a matter of debate, it certainly won't happen overnight.
One thing that could change should we leave is that the Pound might weaken, which should help our exports. Such trade is vital to us as it's potentially the biggest competition to the big multiples that are now controlling the livestock industry and being served by fewer and fewer abattoirs.
Twenty five years ago when I first started selling finished cattle there were more small abattoirs, wholesalers and butchers plus export and intervention to provide competition and alternatives. The strength the big multiples now have is shown by the ease that they have in changing the rules and specifications for payments without fear of losing supplies.
Most of these changes, including the number of moves animals have made and the longer residency period after being in a market, are very anti livestock market and it's obvious that we're a nuisance they could do without. However, if markets do close or stop selling finished cattle I fear farmers will feel a big draught because we're still the other alternative and the best place for the smaller finishers to sell, and wholesalers to come and buy the right stock for their purposes.
Despite all the problems, confidence among store cattle buyers seems to be good, with plenty of grass offsetting the current low finished prices and even the stronger animals keenly contested by the short term finishers.
I can't decide whether it's a strength or a weakness of the system that there are now fewer people finishing cattle but in bigger numbers. These finishers have more bargaining power to get a better price but are handicapped by the fact that they need to sell lots of cattle every week. One thing's for sure, they're strong supporters of store cattle sales in livestock markets and put a lot of money into the pockets of producers of strong stores.
Iain Soutar FLAA
Southern Counties Auctioneers, Salisbury and Shaftesbury Livestock Markets