Make more from surplus stock and take it to market
22nd March 2013
British Dairying Article - January 2013
Selling surplus heifers, milkers and calves at livestock auction markets is an invaluable – and vital – stream of income for most dairy farms. So what’s the best way to ensure they realise their true open market value? With market prices so high, it’s well worth the extra effort of taking them to market.
Taking dairy stock to a live auction market is the only way to ensure that it realises its true open market value, according to Bagshaw’s and Leek Auction’s Staffordshire-based pedigree dairy auctioneer Meg Elliott. “And prices are strong, so it’s well worth the extra effort,” she says, adding that prices for heifers, cows and calves have remained buoyant since 2012.
“It’s worth remembering that if someone comes to your farm to buy stock that they are there for their benefit – not yours. So, unless you’re lucky, you won’t see the prices being realised at market in a private treaty deal.”
She concedes that taking stock to market does require some time and effort, but stresses that it will be rewarded in the current climate. “Selling privately can appear to be a simpler option and I understand that for some producers it’s an attractive option, but nine times out of ten you will realise a considerably better price for your stock at market, particularly at the moment.
Mrs Elliot adds that private buyers may also ‘cherry pick’ the best stock and may not necessarily pay you a premium for that privilege. There are buyers at livestock auction markets who are looking to purchase all quality heifers – not just first quality.
It’s also good PR to take all your heifers to market. Taking heifers to market on a regular basis, and establishing a sound reputation as a vendor, also has a great financial benefit, because it gives buyers confidence in your stock.
And there’s certainly plenty of confidence and eager buyers out there. First-quality heifers sold at a weekly commercial sale at Leek at a high of £2,340. Second-quality heifers also continue to sell well with many making between £1,800 and £2,000 a head.
“Trade is strong for all classes of milking cattle. The past year has been particularly difficult for producers for many reasons, with the weather being a major factor. Cows are continuing to milk below their potential, due to poor forage, and those buying dairy stock need milk. This is one reason why the trade for both dairy cows and heifers remains buoyant .”
Trade for youngstock has also improved, says Mrs Elliott, with a shortage of numbers also pushing the trade.
Auctioneer Tom Brooksbank, director of Norton & Brooksbank, agrees that trade is good: “Surprisingly so, in fact. Thoughts were that prices would drop back a little due to rising feed prices and tight winter forage supplies. But that hasn’t been the case.
“Dairy stock is still in short supply and producers need to keep that tank full, so there’s strong demand.”
He agrees that producers are, indeed, best to sell stock through livestock auction markets in order to make the most of the buoyant prices.
“The market is where the prices are set – it’s the base, if you like. They have a crucial role to play and I’d always urge producers – or anyone selling livestock – to go to auction. That’s where they’re going to get a fair price and, at the moment, a good price.”
He says that many still sell privately: “And who can blame them where time is short and labour is tight. Yes, it is quicker and easier. But I think that comes at a price.”
Going to market is particularly important when selling breeding stock, he believes. “Breeding cattle are more difficult to value – it’s not like selling a finished pig or beef animal. The auction itself will decide what a breeding animal is worth. She’ll catch two or three bidders’ eyes and will often surprise the seller – something that doesn’t happen with only one bidder in a private treaty sale”
And at the moment, that’s a long way towards – and often past – the £2,000 mark.
Mr Brooksbank says he expects the strong dairy prices to continue throughout 2013 and Mrs Elliot agrees.
“I’m optimistic about dairy prices in 2013 and I think they’ll remain firm, as they did in 2012, due to a shortage of supply and the fact that the stock that vendors are bringing to market is good quality and just what our buyers are looking for,” she says.
“So take your surplus stock to auction and make the most of these prices, secure in the knowledge that you’re getting the very best possible return on your investment.”