Farmers Guardian June Editorial

1st June 2007

Livestock Auction Marts - An Undervalued Asset

Whilst livestock markets experience an unrivalled trade for breeding and store stock, farmers are becoming more and more aware of their value to the agricultural industry. There is no other system of marketing that can find a competitive buyer for the largest, smallest, fattest and leanest animals all at the same time and to one captive audience; more often than not the farmer will leave the auction mart having knowingly sold his animals to their best advantage, and with his money firmly in his pocket.

This spring has seen an outstanding trade achieved for all categories of store and breeding stock, with dairy cow sales seeing prices well above the expectations of any valuer twelve months ago. These prices have been helped with the continual insurgence of bovine TB which has caused a dramatic shortage throughout the UK even when we are experiencing the largest exodus of farmers from milk production seen for many generations. Store cattle continue on a high with increased numbers being presented through the auction ring and buyers travelling from throughout the UK and Europe to the largest centres. I am sure that most would agree that both store and breeding cattle are nearly impossible to value at home prior to being sold at market, with prices being achieved nearly always superseding expectations.

We have recently entered the season for the sale of suckler beef replacements and again we are seeing good units of cows, and heifers with calves at foot easily making in excess of 1,000 and at times venturing towards the figure of 2000 per outfit.

There continues to be an air of real confidence in farming whilst the end product remains wholeheartedly disappointing; milk prices have continued to disappoint, hence the mass exodus from the industry, but the recent promise of a better milk price and the excellent demand for cull cows through the live auction system seems to be sending a glimmer of light through the industry. Prime lambs have never been such a poor trade as we have experienced for the past 3 months, the glut of imported New Zealand lamb and the dominance of the supermarket sector have had a crippling effect, and although the livestock market system fights hard to lift market averages, being exceedingly well supported by the small to medium sized abattoirs and the butcher trade, it has never been a more difficult time. Prime cattle have remained a good fast trade with the supermarket spec animals remaining relatively static, but those animals suitable for the home butcher trade or the elite export trade have continued to please, reaching prices at times in excess of 140-150p/kilo liveweight.

The auction mart system is here to stay, on the basis that the farming community understand and appreciate its true value. We cannot allow the beef and lamb sector to be monopolised and controlled to the extent that we have little if any say in what our end product is worth. The service offered by livestock auctioneers is undoubtedly loved by some and hated by others; the hate always seems to come from those whom are trying to buy the product why?? The simple answer is that the open, transparent, and competitive market place offered means that a pre-determined price cannot be commanded for the product and the animals themselves sell on their merits. The 5-10p/kilo deadweight offered for the best animals compared to standard animals is, and always will be an undervaluation of the most elite animals.? The auction market system enables those farmers producing the best quality animals to achieve prices of up to 1.5 times those achieved by standard market average animals.

The Livestock Auctioneers Association Executive Secretary Chris Dodds could not emphasises enough how much the market system does for the industry, with those markets that are members selling under one national set of conditions of sale. Does your market, or marketing agent offer you a nationally respected, full, and comprehensive set of conditions of sale that protect both the vendor and the purchaser?

Without the auction mart system would you know how much your stock was really worth?? Support your local market and keep a competitive edge to the UK's marketing system; one price never will fit all in the sheep and cattle industry.