The Livestock Auctioneers' Association Limited (LAA)

Trade Talk Article

24th April 2014

The new year has seen the dairy trade kick off at a pace with numbers becoming increasingly difficult to find, particularly youngstock.

Increased confidence in the milk price is maybe one of the contributing factors that has seen dairy buyers turnout in force in recent weeks, with only the inclement weather latterly denting the optimistic trade.

At Leek Market, one of the few weekly dairy sales in the UK, numbers have remained consistent with an average weekly entry of 50+ and well over 100 forward at our monthly pedigree sales.

My ""gut instinct"" says that the level of trade has changed very little over the last 12 months, and the facts from our Midlands based Markets have proved this to be entirely correct. This is most evident for first quality animals where the difference is as little as £10-£60 per head, with 2014 prices being generally better. However, most fluctuation is seen in the second quality portion and even then these are £100 or less. The most encouraging thing for me is that numbers, this year to date, are slightly up.

One thing can be certain for 2014, there will be less herd dispersals forward. Common sense says that we have had a flush of sales in recent years, and that the majority of those left in the industry are in it to stay. Of course there will be retirements and unfortunately tragedy and disputes that will bring herds to the market place, but in general buyers will not have the choice they once had.

As for the trade, the continued impact of TB and less numbers generally, mean it is unlikely to change significantly. Put simply, demand is outstripping supply. The million dollar question is ""will prices increase further?"" From a practical point of view there has to be profit in it for the purchaser to maintain their presence around the ring, and thus sustain a healthy market. One would say, that level of trade is about there, and whilst there will no doubt be some peaks at certain times during the year, it is unlikely to change to any great extent.

The benefit of this strong trade is that the selling of surplus milkers and youngstock is an invaluable stream of income for dairy producers, and it goes without saying that the best way of ensuring they realise their true open market value is through an auction ring.

Meg Elliott
Pedigree & Commercial Dairy Auctioneer at Bagshaws & Leek Auctions