Auction marts play a key role in strengthening cattle and sheep prices
3rd October 2011
Livestock auction marts have played a crucial role in increasing the prices paid for cattle and sheep during the past six months. And the good news is that these strong prices are here to stay for the short term, at least, according to the National Beef Association's Kim Haywood.
"Much of this upturn is related to supply and demand and the security of supply or the lack of it," she says. "And the auction mart system is invaluable in that it sets a floor in price and also creates competition. If producers were only able to sell deadweight, the price would be set by those buying deadweight namely private buyers direct from the producer.
"The livestock auction creates some competition, offers producers and alternative and allows them to realise what they see as a fair price for their stock."
She says that recently there has been a reduction in the number of beef cattle being sold direct to processors and their buyers. And the Livestock Auctioneers' Association reports an increase in the number of stock falling under the hammer at UK markets and sales. "Livestock auction marts are favoured by producers at the moment, because the industry is relatively buoyant. They want to get the very best price possible for their stock and feel confident selling live animals, based on weight and appearance, at market. Producers seem to prefer this route to selling privately, sometimes via contract, on a dead-weight basis."
The National Sheep Association's John Geldard agrees: "The livestock auction marts create an element of competition to ensure a competitive price and have certainly played a key role in helping producer to realise the good prices that they're seeing at the moment.
"For the past 20 years, auction marts have evolved and positioned themselves close to processing plants and along motorway corridors. And auctioneers work hard to drum up buyer interest and ensure that vendors stock is presented well in the sale ring."
Hexham-based sheep producer Ken Lumley thinks the Auction Mart is vital. It is the only open and transparent mechanism that can really value what is being traded. "That is why oil, gold and currency are traded that way," he says. "He who pays the piper calls the tune and if I pay an auctioneer to sell my stock it is their job to obtain the best price. The job of a livestock procurement officer is to buy it," he adds.
He believes that livestock producers should use auction markets, or face the possibility of losing them. "We live in a world that's facing population growth, diminishing natural resources, quantitative easing and, therefore, inflation. Given all that, by 2013 there may be no subsides and all income will have to come from produce and stock sales. So it would be a good idea to have auction markets."
For further information please contact:
Chris Dodds, Executive Secretary, Livestock Auctioneers Association
01697 475 433 / 07885 731 502
Gwyn Williams, Chairman, Livestock Auctioneers Association
Notes to editors:
The Livestock Auctioneers' Association is the national organisation representing auctioneering firms which occupy and run the livestock auction markets of England and Wales. Its members handle the vast majority of all auction sales of farm livestock. The Association is also supported by representatives of the Institute of Appraisers and Auctioneers in Scotland.