The Livestock Auctioneers' Association Limited (LAA)

The strength of the Livestock Market

29th March 2013

Livestock markets throughout the UK continue to deliver competition to a marketplace that could easily fall prey to the supermarket demands. With the horsemeat saga still at the forefront of industry news many have asked why the supermarkets appear to be determined to avoid using the auction system to buy their red meat stocks. Possibly it is the simple fact that supermarkets do not like the competitive aspect of trade that our live auction system offers?

The modern livestock market offers full traceability, guaranteed providence, a locally produced product, an assured regular supply of top quality UK bred and fed animals, the opportunity to "pick and choose" which animals you buy, the ability to "batch" loads together, modern Defra/AHVLA approved facilities with unloading and loading docks and pennage specifically designed to accommodate livestock, market assured premises and qualified and knowledgeable drover staff. A recent extensive survey conducted by Bristol University, on behalf of Defra, found markets to be welfare friendly and no more stressful for animals than other methods of gathering for onward transit.

Some 90% of prime cattle, cull cows, prime lambs and cull ewes travel less than 100km to be sold at their local auction mart, most travelling in on the farmers own transport, whilst almost 95% of these animals leave the market, for onward transit, on an approved commercial vehicle.

Surely farmers need to retain every aspect of competition they can when marketing their animals, selling through a system that rewards them suitably when the cost of production rises and demand outstrips supply. Framers need to take more control of the marketing of their animals and livestock markets offer a service that can play an important and at times critical role in that.

Everyone has talked about supply and an ever increasing world population for several years, so it is of no surprise that the large multiples are becoming very concerned as to where their future supplies will come from. Specialist supply chains, integrated supply chains, longer term commitments and improved relationships are all the talk of the town, but what does this mean for the majority of farmers? Most farmers produce relatively small numbers of prime lambs, prime cattle, cull cows and cull ewes on a weekly basis. This is not helpful when the abattoir wants to use modern articulated lorries that can't easily access many farm driveways and yards. There is therefore a need for "gathering points" to facilitate the small to medium sized farmer (the majority of livestock farmers). If animals are being transported to a collection point why not add an element of competition to the deal and market your stock through the live auction ring where buyers must compete for them.

A simple question to ask yourself when selling your animals - With the exception of the live auction system, how many prospective buyers of your animals are working for you, with your interests at heart?

The live auction system charges a commission on the sale price achieved, in simplistic terms, the more the farmer gets the more the auctioneer earns. Both farmers and auctioneers have recently been burdened with spiralling operating costs, it is therefore more important than ever for auctioneers to achieve the best price possible for their sellers.

On the other hand we continually hear the supermarkets arguing that their customers must have value for money, which more often than not means at as low a price as possible. I appreciate that everyone wants to buy as cheaply as possible, but that should not always be at the expense of the primary producer, especially if that means buying at a cost that is less than the known cost of production.

The UK's red meat sector has a powerful independence that is largely safeguarded by competition and alternative marketing opportunities such as the live auction system, it must not allow itself to fall into the same trap as other farm produce sectors have experienced over recent years.

Following last season's successful "Marts the Heart" campaign by the Farmers Guardian I am pleased to note that a similar campaign will run this season spotlighting on the South West region of the country. Last seasons extensive coverage of the benefits and attributes that the live auction system delivers to the farming community was extremely well received by the livestock industry and I am sure that this up and coming series will be equally well received.