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AUCTIONEERS

2 June 2000

AUCTIONEERS

COMMENT

IAN LAWTON

(Chairman, Livestock Auctioneers Association of England and Wales)

Last year, against all the odds, total livestock auction throughput of cattle, sheep, pigs and calves increased by 2.5% to 16.7 million head worth £1.2bn. However, decreases in stock values resulted in a turnover reduction of 1.6%. That the increase in total numbers offered has come at a time when the UK livestock industry is still beset by pressures, restrictions and costs beyond its control is a great credit to farmers and to those who own and run markets.

Figures from auction markets for the first quarter of this year suggest that the positive over-all trend is continuing, although with a slight decline in slaughter ewe figures in line with national slaughterings.

But throughput recorded by the Livestock Auctioneers Association reveals a market of two halves. A leap in the number of store cattle and store and slaughter sheep has only just countered falls in the prime stock sector, most notably of finished pigs.

Meanwhile, the prime beef sector is under pressure from all quarters. The demise of local retail butchers and small abattoirs means fewer customers around the sale ring, and export, once the only real competition for multiple retailers, is no longer available. Indeed, the competition is running the other way, with imports of cheap beef to replace the home-produced cow beef that was once processed.

A total of 70,000 more store cattle were sold in markets in 1999 than in the previous year, an 8.8% increase. But slaughter cattle numbers continued to decline, with 62,000 fewer sold (5.7% down). Total GB slaughterings fell in number by 2.4% over the same period, so some inroad into livestock market sales of prime cattle has resulted from an increase in direct selling and supermarket producers clubs.

The pattern is reversed with slaughter sheep, which show an increase of 6% in slaughter animals (clean sheep and culls) sold through markets, as against a smaller increase in GB slaughterings of 3.8%.

The pig sector has been hardest hit. UK slaughterings were down 9% on the year. It appears that a high proportion of small producers who would normally use auction markets have gone out of business.

Similarly with calves, a decline of 11.1% in offerings reflects the high number of on-farm slaughterings and knacker collections since the ending of the Calf Processing Aid Scheme at the end of July last year.

Meanwhile, some of the problems faced by markets are, hopefully, short-term, and are broadly the result of the BSE crisis, which has been the catalyst for a huge rationalisation of farming in Britain. Others reveal the impact of fundamental changes in consumer lifestyles and preferences, and the supermarkets grip on meat retailing. Not least of these is the much smaller part played by domestic science in the school curriculum, which is leading to a new generation ignorant of the basics of buying and cooking meat.

While a number of town-centre markets are still under threat from councils who prefer development cash to the benefits of a livestock market, there are some encouraging signs. Typical is the response from farmers keen to see continuing transparent competition when Thame market was threatened with closure in March. The target £500,000 of capital was raised in just ten days, and it was expected to hold its first market under the Thame Farmers Auction Mart banner today. &#42

Auctioneers have suffered with farmers as livestock returns have plummeted. But market throughputs are up, and farmers in some areas are putting up cash to keep their market going. "Open competition at the ringside is the only transparent way to set a market price," says Bakewell auctioneer Ian Lawton.

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AUCTIONEERS

12 May 2000

AUCTIONEERS

COMMENT

MARKET

Northampton

AUCTIONEER

Mike Carter

WITH the end of the ewe retention period almost upon us, there has been talk in the Press that cull values have already started to slip back.

Those reports may reflect the national averages seen at markets, but good quality, meaty ewes are still a strong trade, with larger Suffolks making well over £50 a head.

It is hardly surprising averages have come back; the sheer number of culls that have been marketed to date suggests many root finishers are about done and the weekly entries are now more than likely to be stragglers and draft culls, not the better-fed ewes.

Those who have been feeding ewes have had a good trade with low buying-in prices last back end, although not all ewes were being given away. Some in the Press made much of the poorer Welsh ewes that were making £2-£6 a head, but bigger Suffolk and Continentals were much better. The collapse in the skin price with Russias economic problems was much to blame. When you have a Welsh hill ewe worth £15 and suddenly the £8 skin value goes, prices were bound to follow.

Since then, the market has been getting stronger with the religious festivals accounting for much of the trade. They are now over, but prices remain reasonable, some would say good. Buyers at Northampton do not expect the market suddenly to fall, demand is still there.

The better ewes coming in from the eastern counties and off roots are still making good money at £40-£55 apiece. Mules have slipped, but not by much. Quality still counts. One week we saw a trade average £36 with a mixed entry, and then a load of root-fed Mule ewes came in and cleared the lot at an average of £38 a head. On the same day, another consignment made up of heavy Suffolks averaged over £50 a head.

The number of English ewes in Northampton is tailing off, but Irish supplies are starting to increase. Retention for them ended on Apr 28 and I wonder if they have been trying to clear as many of their own before our deadline arrives this week?

Certainly, other markets have also seen a lot of wagons bring in Irish ewes to make up the majority of weekly entries and that may continue. The currency situation is giving them an advantage of about 30%, which must adequately cover transport costs. I do not know what the market for cull ewes is in Ireland, but I would imagine it is limited compared with ours, considering the large midlands-based ethnic communities.

Drag on trade

Rather than see these imports as a drag on the English trade, they are at least keeping numbers and quality up, which is what buyers want. Also, I cant see there being a huge flood of ewes coming out of retention on May 15 which would otherwise over-supply the market. As I said, a lot have already been sold and many sheep men picked up replacement gimmers last autumn at a very reasonable price. If they had culls to go, they have already gone.

Buyers are still keen, and that is the best indication there can be. Most of the entries drawn in from southern and eastern counties to Northampton would be processed in the Midlands or West Yorkshire for the big Asian communities.

The most recent trade saw over 2600 ewes entered to average £37.50 overall. That is perhaps a slightly easier trade on the previous fortnight, but better than returns from some centres. It should stay somewhere near that for a while longer. &#42

Despite some talk, cull values should not shift far, says Mike Carter.

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AUCTIONEERS

21 April 2000

AUCTIONEERS

COMMENT

MARKET

Taunton

AUCTIONEER

Derek Biss

(Greenslade Taylor Hunt)

IT has been said for months that there will be a shortage of heifer calves suitable as dairy replacements and that is now proving the case. Heifer calves born last autumn with good dam records supporting a high PIN are starting to make similar money to bulling heifers. At pedigree level that has been around £220-£250 each, but realistic values across a range of outlets would put the figure nearer £100-£200.

It appears producers are at last waking up to the reality that there could be the predicted shortfall in the near future, as are the many farm advisers who are encouraging clients to go for the progeny of these high PIN cows before the market goes too far.

By my estimate, better heifer calves have seen their value almost double since the lull in the dairy market just before the end of last year. Producers with foresight and capital have already acted.

A shortage was and still is inevitable. No farmer wanted to see Holstein calves put down because their value was low, but perhaps it is time to see a swing in AI policies away from blanket use of beef sires to selective use of Holstein genetics. Certainly, AI suppliers are bemoaning the lack of trade if attitudes at the recent Holstein Show at Stoneleigh was any indication.

Few producers may be able to justify the likely cost of rearing replacements in todays milk market – costed at between £600-£1000 – but where will replacement prices be in two years time? Too many producers are looking no further than short-term survival, but I admit there is little encouragement to do anything else.

It is interesting to note that those herds temporarily getting out of dairying are selling up the older milking stock but retaining female calves. They must be expecting the replacement heifer price to increase. Indeed, others are speculating on that to happen and to an extent that is fuelling the current trade.

And what of supply and demand? Certainly there are a number of dispersals at the moment, but these will tail off in May and the market should hold steady. What cannot be legislated for is the change in milk and, in particular, quota prices. If leasing stays at 4p/litre and purchase at under 25p then vendors could see a willing company of buyers at their sale. But who would put money on that happening?

However, it is worth noting the unwillingness of bulling heifer values to rise. Perhaps dairymen see a period of stability for the next 12 months in stock values.

But what can you do if you are strapped for cash? I feel many cows could be switched on to increase yield from those feeds which, in relative terms, have become cheaper – a move that will surely be encouraged as the cost of replacements rises. More production, but not more cows.

That scenario is not good from an auctioneers point of view. I want to sell as much stock as possible, but I cant help but note that there are a few lower cost options to help producers achieve this goal. The trade in dairy cows is a good example – those with attractive breeding have been snapped up for little more than a few £100s above the burner price.

And trade continues to provide a very efficient way to improve a commercial dairy herd. Out on spring/summer grazing they could soon be putting profit back into the bulk tank. &#42

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AUCTIONEERS

7 April 2000

AUCTIONEERS

COMMENT

AUCTIONEER

Richard Bannister

(JHWalter, Linclon)

THE strong £ is still the most notable factor in depressing second-hand machinery prices this spring. The effect of sterling linked with ever-increasing pressure on farm incomes is taking its toll as potential buyers (both farmers and dealers) look hard at expenditure within their businesses.

In addition, a simple case of supply and demand is at work. There has already been a large number of sales with a lot of good quality equipment on offer this year. Making a sale stand out in this environment is difficult and smaller ones can suffer as a result.

The increasing trend toward contract farming, either whole farm or just a few operations, plus substantial restructuring of farming businesses continues to create a surplus of machinery. When disposing of kit the auction is still the only true test of the open market and is by far the most efficient way of selling.

While there can be no replacement for the traditional on-farm dispersal sale, the opportunity to hold a joint farm sale can provide a new route of disposal for those with a small amount of good quality machinery to sell.

The alternative for many would be to enter machinery in to a collective sale which is often viewed with suspicion as there is rarely openness with regard to those entering equipment. The possibility of purchasing equipment which may have a hidden problem is amplified in this arena. In contrast, the joint farm sale should offer an opportunity to talk with the previous owner which can often allay those fears.

To this end, the joint farm sale should, as far as possible, include machinery from local farmers whose main intention is to sell rather than simply to test the market. Vendors must also be willing to stand by their machine and talk to prospective buyers. This approach will hopefully maintain the premiums normally achieved only at a genuine dispersal.

But there are pros and cons. Vendors must contend with transport costs while auctioneers have the tricky job of finding a suitable location. The sale will still, to a degree, be viewed with suspicion depending on how open the vendors are willing to be. In addition, all parties have to work closely together to ensure its smooth running.

By joining with other vendors costs are spread making the occasion more economical and increasing the budget for marketing the sale itself. In addition, the quality and not just quantity of machinery on offer will help attract buyers from all areas at a time when sales are prevalent and there is real competition for buyers. If things are properly structured, vendors will be encouraged to sell rather than just test the market which is of further benefit to buyers.

Flat-rate commission

The big question is how much will it cost? One option is to level a flat-rate commission and a share of the costs (split in relation to the amount sold) or a simple flat-rate commission with a second tier for reserved machines remaining unsold. These methods are designed to encourage the vendor to be as realistic as possible when selling, either to reduce liability to costs or avoid being charged commission for lots unsold.

The joint farm sale principle is not a new idea, but a reinvention of the collective approach. However, for it to work vendors must be open and realistic in their approach to reap the benefits of strong prices and reduced costs.

It is not to say that the collective sale does not still thrive, but to effectively sell quality machinery at a premium, the joint farm sale principle works. &#42

Richard Bannister advocates joint farm sales to dispose of quality machinery.

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AUCTIONEERS

24 March 2000

AUCTIONEERS

COMMENT

AUCTIONEER

Chris Turney

Hamiltons

WHAT exactly have my grasskeep prices to do with farming in Poland?" comes the question from yet another frustrated land owner as I try to explain why the prices had fallen back by some 20%, with no prospects of an upturn for the foreseeable future.

The annual grasskeep trade is not a precise indicator of the state of agriculture in the UK because the majority of the thousands of acres that change hands each season do so by private treaty.

Indeed, most occur between the same owner and occupier year after year, while the value of smaller areas that come up for auction is determined by localised supply and demand which can see figures varying from £150/acre down to £20 or even less.

However, the current recession has caused 40% to be wiped off the grasskeep values compared with five years ago.

In areas of limited demand, grasskeep is virtually being given away. This is more to do with stocking densities, which comes back to the basic economic equation of supply and demand.

The European effect on grasskeep is more complicated to interpret. Agriculture in Europe is controlled by a series of artificial mechanisms. Butter mountains and milk lakes caused politicians to panic in the early 1980s, but rather than allow the open market price fluctuations to control output, artificial control systems were produced such as milk quota.

European demand

If European demand for milk and milk products was to fall by 20% then production could be cut using quotas. This worked very successfully for a number of years, although it created its own hardships. The politicians like this because it saves the embarrassment of dumping surpluses onto Eastern European markets.

However, as politics became more important than real business, unsatisfactory compromises were negotiated and, despite falling demand for the milk products, the quotas remained relatively untouched.

Agriculture in the 12 countries applying to join the EU is generally very inefficient, but those countries do have the potential of being some of the best farming units in the whole of Europe.

When they become modernised – not if – then Europe could again be saturated with agricultural products. Because of regional extremes, the main way this can be controlled is through quotas. If quotas remain, production will continue at a level exceeding demand with a result of low prices, which in turn means that there is no scope for an upturn.

Grasskeep values

Add to this the reality that while there is an exodus across the board in the dairy industry, the shortfall will very quickly be taken up as other units expand to "stay where they are". The fact that supermarket buyers will go for the cheapest regardless of where it comes from also adds to the malaise. As incomes have fallen, so have grasskeep values.

But what of the future? We are now in a new millennium and a new era of agriculture. Fifty years from now, Eastern Europe will be one of the worlds most important food production areas.

Problems of language, transport and management will have been overcome and UK agriculture could be reduced to specialist production.

Subsidy payments

Diversification is, therefore, a must. Large parts of the UK will look more like a tourist leisure park – subsidy payments already encourage this.

As far as grasskeep areas are concerned, they seem destined by subsidies to be part of the countryside "beautification" scheme.

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AUCTIONEERS

4 February 2000

WHEN the hammer fell for the last time in December 1998 at Bury St Edmunds market, local sheep farmers were faced with the problem of finding a new outlet.

For many, it involved travelling greater distances to the six remaining auctions in East Anglia, Norfolk and Essex. But producers were, and remain, reluctant to travel further when faced with the inevitable uncertainty of price fluctuations in local trade.

The alternative was to sell direct, but with less than half a dozen sheep abattoirs in the Eastern region choices, were limited.

Once news of the implications of the closure of Bury market had sunk in, Hill Farm Sheep was formed as an alternative liveweight outlet.

It took the bold step of offering producers a guarantee that theyd be paid the average MLC price for all sorted sheep ruling on the day of delivery, less a handling charge to include levies and all other deductions at a fixed rate of £1.60 per head.

All producer payments are made within five days.

Popular practice

The practice of fixing prices at the published MLC rates soon proved to be popular as it effectively takes out the full impact of local trade fluctuations. As we approach our first anniversary, the fact that it has attracted an average of 500 sheep a week – almost double Burys entry – adds weight to this argument.

We have managed to find buyers for all weight and grade categories and producers do not have the problem of trying to hit precise deadweight grading, weight band and price targets required by some outlets.

A recent comparison with typical deadweight returns shows that the average producer is better off selling liveweight rather than on the hook.

Most MLC-based deadweight grids contain 35 different categories. Of these only 5 are at the bid price, 6 attract a premium and no less than 24 are quoted at less than the bid price.

Because of the attractions of a price linked to average England & Wales auction returns, even initially reluctant producers are keen to use an outlet at which they know they can supply unlimited numbers of sheep on a weekly basis.

Filling the gap

But, while live outlets of this type fill the gap in areas where there are no auction markets, both systems need to operate in tandem.

I wouldnt encourage mart operators to provide a Hill Farm Sheep-type scheme unless they are planning to close their marts; it could erode their existing business.

Auctioneers who have tried to operate either deadweight or electronic auction systems alongside their current business have generally found that it is impossible to run in more than one direction at the same time. This rule also applies to the Hill Farm Sheep system.

A lot to offer

On welfare grounds, being based on a farm has a lot to offer. Once the sheep are sorted they are moved into large covered yards with access to food and water if necessary. As all finished sheep are sold to approved UK abattoirs, Hill Farm can guarantee that none of their stock will go for live export.

With UK farmers currently suffering from a lack of competition both in the auction ring and deadweight, an additional outlet can do nothing but help to keep as many options available as possible to the nations hard pressed sheep farmers. &#42

AUCTIONEERS

COMMENT

MARKET

Hill Farm Sheep

AUCTIONEER

Peter Crichton

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AUCTIONEERS

21 January 2000

AUCTIONEERS

COMMENT

MARKET

Leominster 4×4 sales

AUCTIONEER

Bob Chadwick

(Russell Baldwin and Bright)

FOUR-wheel-drive vehicles are still essential to an industry struggling to survive in a Brussels-led Europe where the need to reduce costs is vital, not optional. Perhaps, then, farmers bedevilled by political, economic and health issues, should be taking a closer look at what 4x4s are available under the hammer. Savings on showroom prices can be sizeable.

It is not just farming that is under pressure. Times are hard in most sectors and the need to sustain cashflow is prompting many individuals and organisations to part with vehicles which in better days would be worked to the limit. Miserly tax concessions on some new purchases enhance further the benefit of buying second-hand.

At Leominster, fortnightly entries – usually between 250-300 vehicles – range from basic workhorse vehicles to the latest luxury marques. For example, recent entries have included a G-reg Subaru MV pick-up with canopy and 91,000 miles on the clock – ideal for trundling across fields – which sold for £200 plus VAT. Or, depending on your profits, you could have driven home in a M-reg 4×4 Porsche 911 Carrera 3.6 with all the gadgets and fully documented 28,000 miles for £39,300, less than half its original price tag.

Between the extremes

In between these extremes there are a host of Land Rover, Toyota, Mitsubushi Isuzu and other 4×4 cars and commercials. Many from blue chip organisations in both the public and private sectors, often with service records which give some idea of how they have been maintained.

Whether VAT is payable will depend on the type of vehicle and status of the vendor. The sale price for some vehicles includes an element of VAT, with others the VAT is added to the sale price, and there are also vehicles which do not attract VAT at all. It is important to understand these differences which will be clearly defined and explained by the auctioneers.

Other costs will also add to the hammer price. For vehicles, some auctions chose not to levy a buyers premium, but require an indemnity fee of £40-£130 to be paid, depending on the value of the vehicle.

Claims are rare

This guarantees your right as a buyer to reclaim the purchase cost from the auctioneer if a problem over ownership and certain other aspects of status vehicle arise. Claims are rare, but it is an insurance policy if nothing else.

An idea of what savings can be made at auction is shown in the table below.

But what about those looking to sell vehicles? Aside from a flat fee (typically £15) for administration and advertising, there is a no sale/no fee arrangement. Reserves can be set on a vehicle and where possible it is worth consulting the auctioneer as to what it should be.

If you sell a vehicle expect to be charged commission (currently between £30-£350) linked to the sale price. All these costs are subject to VAT regardless of the vendors status.

Payment for vehicles sold is normally received within five working days; that is, of course, providing your postman doesnt have the flu.

Someone may have once said "theres no such thing as a bargain", but I am not convinced. When all is said and done, the value is in the eye of the beholder. &#42

Recent second-hand 4×4 sales

Year/reg Vehicle £ new £ auction

1998 R Land Rover Defender 90 tdi hard top 14,672 9800+VAT

27,000 miles tbar

1997 R Isuzu trooper td van FSH, one owner 15,502 9800+VAT

1997 R Toyota Landcruiser Amazon 4.2 td 35,875 19,500

40,000 miles air con ABS

1996 P Discovery 5dr tdi 69,000 miles tbar twin 22,825 10,600 inc VAT

sroofs

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AUCTIONEERS

7 January 2000

AUCTIONEERS

COMMENT

MARKET

Bagshaws, Bakewell

AUCTIONEER

Ian Lawton

(chairman, Livestock

Auctioneers Association)

WHAT are the prospects facing auctioneers and our livestock- producing customers as we enter this new millennium?

As auctioneers, our fortunes are inextricably linked with those of the producer. Together we are assaulted by extreme currency changes, politicians who see no advantage in supporting us, and beaurocrats who see us as a reason – and a tool – for their existence.

BSE, the scientists, and inept politicians have done their best to bury us, but we are still here. However, we cant just sit back and expect that things will get better on their own; we must fight to ensure our interests are protected.

Already, there have been some notable successes. Take Farmers Ferry; they were advised that a bid to restart live exports would fail. How wrong that advice was. Its hard not to admire their determination and effort.

The ongoing and increasing success of farmers markets is another example.

These have been achieved by downright determination and effort, and hold a very strong lesson. We must strive to help ourselves in whatever way we may. Exploring new markets, exerting political pressure to renew old ones, getting rid of the artificial barriers which give us unequal opportunities should all be targeted. It will be hard, but it is possible.

And what of auctioneers? We have to make our producer customers understand that they need an auction system to maintain their independence and strength. Using it is an investment in their own future and security.

This is not just a ploy to justify our existence. The evidence of the auctions benefits are all to easy to see if you look for them. Look what happened to those industries that lost theirs as the main method of fixing price.

Take the pig sector as one example and it requires no further comment. And then theres the milk industry – where politicians listening to a bleating processing industry determined not to compete for supplies never allowed the auction system to be used.

If livestock producers want to know what happens when livestock markets close, look at Southern Ireland where the fatstock auction system has gone.

A famous Irish meat magnate once claimed it cost 1p/kg to get rid of it. But why did they want rid of it? It was not in the producers interest as a look at his current competitive position will show. Producers are given as much as the processor thinks he needs to ensure a further supply and not a penny more. The position in Northern Ireland is much the same.

Although the auction system is not a cure for all ills, its the clearing house that finds an outlet for all stock, including those from even the most efficient producers which for reasons outside his/her control do not fit a particular specification.

And producers should not be fooled into thinking that the number of customers for stock is falling. There are some 325,000 food outlets in the UK, but we must recognise that lifestyles are changing rapidly.

We are likely to follow trends in the USA where 53% of all food is consumed outside the home. Should we then continue to be obsessed with the fresh meat retailer? Catering, ready meals and processed/value-added markets are expanding. Should we not be chasing these markets with equal vigour, especially when much of the produced used is imported?

At the same time we need to work on consumers. Home economics and cooking may be old hat, but we have a generation ignorant of food safety and a public who have a paranoia on the safety of food.

Our industry has spent £ billions to achieve excellence in safety, but we have a set of politicians not even prepared to teach it in schools as the education ministers most recent decision showed. There must be work to do here.

There are many other issues on which we must fight for the right to feed our nation, and however black the future might appear, its all out there to be fought for.

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  • News

Auctioneers

19 November 1999

Auctioneers

tackle beef payments

By Simon Wragg

AUCTIONEERS meet today (Friday) to decide how to administer the slaughter premium scheme to ensure finishers of beef cattle receive payments of £17 a head.

The scheme, aimed at compensating farmers for low prices, will pay the producer who kept an animal for the two months prior to slaughter.

Those selling direct to abattoirs can guarantee they will receive subsidy to which they are entitled. However, liveweight sellers risk stock being bought out of fat rings for further feeding, potentially depriving the original vendor of the payment.

"That must be sorted," says Ludlow-based auctioneer John Uffold. Although the number of cattle pulled out of fat rings is small (industry figures put it at 5-15% in individual markets) vendors interests must be protected.

"We have to presume that all animals going through the fat ring will be slaughtered within a month of sale. It will have to be put in the conditions of sale," he adds.

Other auctioneers agree. "Its a logical conclusion," comments Hexham-based auctioneer Robert Whitelock who, like most auctioneers, is waiting to hear the conclusion of talks between MAFF, which administers the scheme, and auctioneers representatives.

At todays Livestock Auctioneers Associations annual general meeting, Northants, officials are expected to spell out such arrangements for markets.

The LAA will suggest amendments to the conditions of sale which forms a binding contract. If an animal is not slaughtered with a month of sale as declared, buyers will be forced to reimburse the original vendor for the full subsidy.

However, those specialist looking to take fat cattle to higher weights and who declare their intention at the ringside will only be expected to compensate the original vendor for a proportion of the subsidy. "In effect they will buy the rights to the subsidy. While Im not setting a benchmark, £15 a head would be realistic," suggests LAA secretary John Martin.

But the system could be open to abuse if fatteners decide not to compensate vendors. "But theyll only do it once," warns Mr Uffold, adding that any under-handed activity will see offending buyers excluded from the ringside.

Markets are also expected to be stricter on excluding under-finished stock as entries for the fat ring; a particularly problem at the end of grazing when cattle are brought in for winter. "Auctioneers will effectively police the system," adds Mr Martin.

Despite todays meeting, the LAA has been criticised by producer representatives for not addressing the issue earlier. But the association says it received no paperwork from MAFF to progress its decisions. &#42

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AUCTIONEERS

5 November 1999

AUCTIONEERS

COMMENT

MARKET

Ballyclare

AUCTIONEER

Shaun Irvine

(J.A.McClelland and Sons)

BEEF finishers in Northern Ireland anticipate market prices will be stronger this winter compared with last year, but will it be enough to justify the buoyant trade at the store sales?

Like the rest of the UK, we have not seen the downturn in finished cattle prices which usually occurs in September and October – they simply didnt materialise. The supply of stock has been smoother this time around with better weather conditions easing finishing and that has helped. Also, more cattle have been shipped from the province to Scottish and English meat plants.

So with a starting price of 150p/kg deadweight, 14p/kg higher than last year, is there room for further improvement to accommodate the lift in store prices which amounts to about £50/head?

Demand, we are informed, will be high coming up to Christmas and perhaps exceptionally so this year with the millennium celebrations coming a week later.

Given the national fervour to drum up support for home produce against cheap imports this should ensure demand is sustained.

On the supply side theres a feeling fewer cattle are being housed for fattening with many under-finished cattle being sold off grass as finishers lack funds to pay for winter feeding.

We have to remember that beef finishers have had a tough time in previous years and banks are cautious about extending borrowings.

Positive immediate future

In contrast the immediate future is beginning to look a lot more positive.

However, we must not forget that meat plants in the province continue to exert tremendous control on prices.

These are 20-24p/kg behind mainland markets – a price differential which more than covers any additional transport costs – which our plants are competing against.

The trade to the mainland has increased but only serves to put a floor in the market by offering producers an alternative outlet.

The post-Christmas trading period will have a significant effect on producers fortunes. Many hope it will bring a further recovery in trade which will be necessary to recover any margin for those who paid higher store prices.

Some pressure

Without doubt there will be some pressure on the market which could keep prices back.

The rise in imports from other EU and world countries which has been curtailed as intervention stores were emptied may soon resume.

But if consumers react to the sewage-fed continental beef scare I would like to think demand for home-produced stock could stave off any extra pressure.

Farms minister Nick Browns promise for clearer labelling of meat – including country of origin – may also help with any recovery.

I also feel there is some evidence of a recovery already being seen. Numbers of cattle being imported from the republic – where prices are still below the province – by the two meat plants supplying Sainsbury and Tesco suggest there is difficulty in sourcing sufficient number of farm-assured stock from the south.

And given the number of quality weanlings which have been exported live from the republic to other EU countries we could well see a scarcity of quality beef cattle competing against markets in the north in the foreseeable future.

Overall, I could be forgiven for thinking prospects are looking good and some lift in store prices may have been justified.

And finally, we all live in hope that the export of cattle under the date-based export scheme will resume in the New Year. If it does it really will be the icing on the cake. &#42

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AUCTIONEERS

15 October 1999

AUCTIONEERS

COMMENT

MARKET

Argyll and Islands

AUCTIONEER

Donald Morrison

(United Auctions)

DESPITE pressure from the SNFU and SMPs for a cull ewe scheme to be introduced to alleviate the pressure currently facing farmers and crofters, the bureaucrats in Brussels have apparently found reason to object to the proposal.

Do they really know how it will affect farmers in our most isolated areas? As an auctioneer and director of UA covering the West coast of Scotland island markets – and with family history in crofting going back 40 years – I know only too well that it is a bitter blow.

I have never known the despair and uncertainty among this remote fraternity as witnessed today with the current sheep trade. And that feeling extends beyond Argyll and its surrounding islands and applies to the majority of islanders and crofters.

Bureaucrats

I often wonder if the bureaucrats in Brussels know where the islands of the West coast of Scotland really are, far less for them to know the costs facing farmers in transporting goods and livestock to and from the mainland.

Our financial situation is dire. In 1998 we saw the price of Blackface warranted ewes fall from an average of around £20 to £8 a head. Farmers and crofters being optimists to a degree thought matters could not get any worse. Many held on to stock for better days to come. We are now in the midst of the 1999 ewe sales and experiencing a further reduction in values, with some noted lots of ewes fetching just £3 a head for Blackface and £6 for crossbreds at the major mainland centres.

That has led to a total collapse of the cast (cull) ewe trade with prime Blackface only fetching £1 a head and Crossbreds £3-£5 at the Island centres. Thats left thousands of ewes throughout the Argyll and Islands area unsaleable and our customers unable to find homes for them.

Our "friends" in Brussels, among other crippling legislation imposed over recent years, suggest ewes transported in floats (lorries) on board roll-on/roll-off ferries in these areas must be carried in three tier floats instead of the usual four tier rigs. Capable of carrying 300 ewes (instead of 400 ewes), these 17m long floats cost £407 plus VAT on a ferry to Lochboisdale, Western Isles.

A haulage firm requires £800 plus VAT a load to move these ewes to the Midlands in England. This equates to a transport cost of £4.72 a ewe. Add market commission at £1 a head, MLC levies of 55.8p, and anti-mortem levies at 15.2p it adds a further £1.71. The total cost of marketing ewes comes to £6.44 a head. How can the finishing farmer take anything less than £6.50 a ewe for them?

He simply cannot.

What is the answer if there is no disposal scheme for these apparently valueless ewes? To suggest disposing of the animals and burying them on-farm or crofts poses many difficulties to our hard up farmers/crofters, not least for them to keep to the rules and regulations set by the environmental protection agencies.

These farmers do not run intensive units. Many islanders know livestock on an individual basis and for these people husbandry extends beyond simply disposing of stock which – through no fault of their own – is worthless.

Clear solution

But, there is one clear solution which may ease these problems. It is for our government in Scotland to stand up to Brussels and get the unnecessary splitting of ewe carcasses order removed. That would at least reduce slaughtering costs which are currently £6 a ewe and, most important of all, encourage some EU countries to take entire carcasses. This simple step would be of immense benefit and at no cost to the taxpayer.

It is rather ironic we now have our own Scottish Parliament which we trusted would take independent decisions on our behalf, but this is obviously not the case.

It seems it has to go on its knees with begging bowl in hand to meet our "friends" in Brussels whose ideas very rarely make much sense, especially to an islander or crofter isolated on the West coast of Scotland. &#42

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AUCTIONEERS

8 October 1999

AUCTIONEERS

COMMENT

MARKET

Ludlow

AUCTIONEER

John Uffold

(McCartneys)

WHAT do I write about the beef market that hasnt already been said before and by better men than me since that fateful day in March 1996? Everything keeps going around in your head like a carousel. Beef on the bone ban; calf slaughter scheme; value added; Meat Hygiene Service; deadweight marketing and co-operatives and producer clubs; supermarket domination.

Self-professed experts have written thousands of words in this and other agricultural journals. Some have been worth reading; some would have been better used to light the fire. The most carefully-researched papers with accurate predictions can be made to look gibberish by a change in circumstances such as currency fluctuations or the collapse of some far-off economy.

I was asked to make some predictions. Up until three weeks ago all was rosy. Buyers "busting" for cattle. Now, more cattle on the market because of the wet weather; Irish beef coming in; the Jewish New Year and an absence of kosher killing for two weeks; all come together taking the edge off the trade. The only safe prediction is to go back to the rule of thumb: Take each day as it comes and make the best of it." This might not sound very scientific and certainly doesnt fit in with agri-business consultants and costings.

Never mind MLC figures, the gut feeling on the ground is that finished cattle numbers are fewer this autumn. This should keep trade firm until Christmas and beyond, but there is always the complication of beef from abroad. Do vendors hang on for the forthcoming slaughter premium in the year 2000? Definitely not. £18 per head, although a help, shouldnt govern marketing decisions. The only predictions that perhaps I can help with are not predictions at all, but simple yardsticks.

&#8226 Sell when the stock are wanted. Dont try and be clever and hold on. When the price is rising farmers wont sell. When the trade starts to ease everybody finds a few.

&#8226 If buying stores, remember the old adages of "Something well bought is three parts sold" and "Buy them when you see them".

&#8226 Try to produce an article which suits several buyers – this will mean becoming Farm Assured – and dont become locked into one outlet.

&#8226 Sell with the benefit of competition of some type. Livestock markets are not all things to all men but their continuance is vital to an independent and profitable beef industry.

As for the future, the reduction in meat hygiene charges should be at the top of everybodys agenda. The abattoir sector, for all its faults in farmers eyes, cannot stand crippling inspection charges as well as a total destruction in the value of the fifth quarter (offal etc). The replacing of the existing beef export scheme should be another priority so exporters can have export days in abattoirs and not total plant designation.

The calf slaughter scheme should be confined to the history books. It has dramatically accelerated the move of the dairy sector down a path where beef characteristics are of no interest whatsoever and where calves were being born with the specific objective of putting them in the "bin". Not a very edifying process. The sexing of semen is a development to be grabbed, for the benefit of dairy and beef producers alike.

"Value added" on a national scale is a myth unless farmers actually get involved in processing the raw material, since any retailer who consistently pays more undoubtedly puts himself at a disadvantage in the competitive world in which we live.

Farmers are good producers of raw material and should concentrate on what they do best. Similarly auctioneers should develop their live markets as vigorously as they can; and the thought beef producers must have in their mind is – look at the pig industry. Retailers, wholesalers, marketing groups and feed firms, numerous experts and politicians seemingly are trying to push you down that integrated, modern, efficient, economically wonderful path! To their benefit or yours? &#42

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AUCTIONEERS

24 September 1999

AUCTIONEERS

COMMENT

MARKET

Caledonian Marts,

Stirling

AUCTIONEER

John Kyle

Recently there has been a much more positive atmosphere at cattle sales compared with the last couple of years.

This reflects in the prices, with prime cattle round 7p/kg dearer than last year. This increase has filtered through to the store cattle and suckled calf sales, with producers enjoying a much improved trade.

Here in Scotland, that has been helped by arable farmers having had an early and straightforward harvest. That has brought them into the suckled calf and store market earlier and in a more upbeat mood than recent years.

In mid September we held our Premier Show and Sale of Suckled Calves, which not only attracts finishers, but also a number of commercial showmen from throughout Britain looking for a potential Christmas fat-stock champion. And there is plenty of choice with a great selection of quality, young cattle, many of which have been paraded at summer shows.

As an indication of trade, bullocks averaged 115.5p/kg, up 7p on the year, while heifers averaged 107.3p/kg, up 8.4p over the same period.

As ever, well-fleshed cattle capable of finishing out of the yards were easy to sell. The only difficult ones were heifers under about 350kg liveweight.

Quality throughout the sale was as good as Ive ever seen it, even though overall the cattle were 10kg-15kg lighter than last year. The cold, wet spring would have hit them early on, but they had really improved through a good summer.

There were nine four figure prices, including a new Scottish record of £4,400 for a suckled calf, paid by Mike Alford of Somerset for a yearling heifer from John Robertson, Pitlochry.

Although were getting as many cattle as ever which have been bred in the beef herds, there has been a considerable drop in the numbers of dairy-bred bullocks thanks to the calf processing aid scheme. This, coupled with the reduction of beef in intervention stores, is bound to push up the price of prime cattle over the coming months as they get scarcer.

For the life of me I cannot understand why the Government has ended the calf scheme. Purely from a financial point of view, the payment of a couple of subsidies on these dairy-bred males will be more expensive than to take them out of the system as calves. Also they contribute very little in the way of quality to the beef industry.

On that note, while quality finished cattle are always in demand, I wonder how many will come back through the auction via the fat ring. Farmers who sell deadweight cant realise, or perhaps dont care, how much power they are handing over to the supermarkets. Just look at the pig and milk industry to see what can happen once farmers give away the control over the marketing of their produce.

In Ireland very few prime cattle are now auctioned. The abattoirs and their big customers have gained control over the cattle price – is it any wonder that prices in Ireland are lower than over here?

Once buyers disappear from an auction ring, theyre gone forever.

Farmers cant turn the clock back! &#42

Suckled calf buyers are back earlier and with brisker trade, says John Kyle.

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AUCTIONEERS

17 September 1999

AUCTIONEERS

COMMENT

MARKET

Ripon Farmers

Livestock Mart

AUCTIONEER

Norman Bagley

(Company name)

LAST year David Sawday of Tesco came clean about the anti-auction stance being taken by his company. Much was written at the time – some by myself about the dangerous implications of this arrogant rhetoric. Later that year the Livestock Marketing Alliance was formed to defend the principle of open and competitive price fixing.

The members of the Alliance recognised that farmers should keep open all forms of marketing options and not narrow any one of them down to a point where they ceased to have any influence on the end price. Thats been demonstrated by the misguided loyalty of pig farmers to marketing groups who were themselves dependant on giants such as Malton Bacon Factory but with zero influence.

We have heard much from NFU President Ben Gill of the need for such "collaboration and co-operation" in marketing. I have no objection to that where it enhances competition and in Bens other buzz-words "adds value". However, I would offer a better description on behalf of the poor pig producers who went down this disastrous road; clap trap and capitulation.

Now we have the next all-conquering example of collaboration and co-operation – the new All Wales Co-op. At a time when retailers are fighting to sell the cheapest possible food, has the Co-op found a new way to make them pay more? Pass the sick bag Alice.

Producers have been brainwashed into thinking that partnerships are the only way forward and that any middle-man must be cut out – good or bad. Take the much maligned livestock agent as an example. Abattoirs, bidding farmers lower dead-weight prices at the start of the week, have used agents stock to top up later. But that may now not be so easy as the agents themselves are disillusioned with poor specification and weight returns.

The Alliance has been extremely pleased with the co-operation of the Intervention Board in the area of dressing specification and weighing. The increased level of inspection at the seventeen large price reporting abattoirs in England and the illegality of the use of company spec at these larger plants is a major step forward in the beef sector.

Pig farmers will also benefit from these increased inspections although sheep farmers should remember that the IB has no regulatory role in that sector. Is this why throughput in the live auctions in sheep has held up so well? The Alliance now has quarterly meetings with the IB to monitor the inspection results, which will go a long way to lifting the fog in price comparison.

The bedrock of support for auctions has always been the small and medium sized abattoir sector who recognise the flexibility and benefits of choice that a well run auction can provide. The auction system is open and transparent and whilst not for everyone, it still provides the vital barrier between farmers and the buyers. Indeed, I would call it the best possible example of the collaboration and co-operation to which the NFU and others so fervently espouse.

So have the auctions turned the corner?

In cattle, there is evidence that even in the hot bed of producer group country, some auctions are staging a real comeback. Power-freak control and inconsistent returns by these groups are reasons given.

In pigs, there is a noticeable return to some auctions. Marketing-groups lack of influence has destroyed confidence. Pigs have been worth more on their feet.

In sheep, auctions are performing above expectations in throughput terms. Lambs bought for supermarkets and then processed as a direct dead-weight purchase in the agents name is a practice which is fooling nobody.

Time will tell, but some farmers have undoubtedly come to the view that all the false promises of new and revolutionary ways of securing ever better returns from partnerships may be an illusion. The auction system, imperfect though it is, may yet prove to the best of all options.

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AUCTIONEERS

3 September 1999

AUCTIONEERS

COMMENT

MARKET

Cambridge Saleground

AUCTIONEER

Bill King

(Cheffins Grain &Comins)

IN a typical year, Cambridge Machinery sales will handle exports to 40 countries world-wide, with over 1500 tractors going abroad. The last two years have seen a tightening of the market, and vendors at the regular monthly auctions at Cambridge have had to adjust to the inevitable consequences of a strong pound.

More than half the tractors sold each month go abroad, and some countries have been able to withstand the current fluctuations better than others. This is particularly true for Eire, whose strong economy has meant that Irish dealers are buying later and larger tractors, particularly Case and New Holland.

Mainland European purchasers typically want up-to-date tractors with high specification such as powershift and 40 kph transmission.

Dutch dealers have also been active, not only continuing to purchase but also selling more second-hand Dutch machinery and taking advantage of the exchange rate.

Other mainland European countries, such as Spain and Greece, have taken longer to readjust but demand is good, albeit at lower values. Typically, John Deere 40 & 50 series are exported to Spain, while Greece buys older John Deere, Deutz, Fiat and Case.

Germany has resisted realignment of its currency in Euro and tends to be selling rather than buying.

Trade to the Middle and Far East has not been badly affected by the strength of sterling and older 100 & 200 series MFs and 3000-4000 New Hollands are still being exported in numbers (although some government restrictions are now controlling the quantity and quality of imports, particularly in Syria). Trade to the Lebanon, Jordan and Pakistan remains steady.

Australia and New Zealand are increasingly looking for small to medium range tractors for briefcase farmers who are buying sections of the multiple thousand acre farms that are being sold off in 2-20ha (5-50 acre) blocks.

UK dealers are influenced by the trade to North America, and when US buyers attend, the trade is very keen. The same goes for South American buyers.

In spite of all the hype surrounding the influence of the Euro, no requests have been made by foreign vendors or purchasers for trading in Euros. They are clearly keen to retain sterling for UK trading purposes.

Two-tier trade

There is something of a two-tier trade, as demand from buyers and dealers for the UK market is for good quality, well maintained tractors with low hours. Buyers are looking for late registered tractors in the colours of John Deere, Case and New Holland, probably in that order, with MF in demand at the right price.

This type of tractor is most likely to be available from on-farm machinery auctions and, if well presented, with good specification and over-sized tyres, they can and will make premium prices. Older high-hour tractors do have a market in the UK but will probably be destined for the export market.

Older MF series tractors and other popular export tractors which would otherwise be destined for the UK scrap yard will still be exported for breaking.

Good, well maintained equipment is in demand for the home trade as farmers either extend their replacement policy or look for good quality second-hand alternatives.

As manufacturers, especially foreign manufacturers, offer increasingly competitive prices and finance deals this will have an effect on the trade for good quality late machinery, forcing residual values to lower levels. This is especially the case with combines and other high value harvesting equipment.

Farming businesses are expanding and resources are increasingly pooled in an attempt to reduce costs, so it is inevitable that average hp will grow, and more machinery and tractors will come onto the market. The trade for well-maintained quality machinery will be sustained, but it will be increasingly difficult to move tired or obsolete machines.

Ample used tractors to sell, but there are plenty of buyers, says Bill King. Quality counts, he adds, as attractive deals abound for new models.

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AUCTIONEERS

20 August 1999

AUCTIONEERS

COMMENT

MARKET

Ayr

AUCTIONEER

Jim Craig

(James Craig Ltd)

THE next five years could be crucial in deciding whether many livestock markets survive or close. And while some farmers are realising closure could be the inevitable step to complete price control by the big retailers, they may be surprised to learn deadweight sellers fear market closures too.

As a dedicated deadweight seller said to me at the Wigtown show: "If the auction markets werent there wed be getting a pounding (from the retailers)". The concern is that once the markets close, the only true method of setting a price will be lost. After then, multiples may turn to abattoirs and dictate – as some suggest they already do – a price theyre prepared to pay on a day, rather than what the market dictates, or what stock is worth.

Market closures are of equal concern to auctioneer and farmer alike. After all, we make our living by marketing stock on their behalf. Simply put, its in our interest to get the best price for the vendor.

Not so for the deadweight buyer. His margin is made from buying stock below the price set by the retailers. Its in their joint interest to buy as cheaply as possible.

Despite this, the march of deadweight selling continues. Nobody should be against change just for the sake of it, but it cuts to the bone to be compared with abattoirs.

This is especially so when relatively few farmers do, or could, check that stock is weighed or graded correctly in the plant or factory. Yet the same farmers insist on seeing their animals sold through the auction ring, where everything is transparent.

And for those who say theyve not enough time to spend watching stock sold, remember auctioneers only require the same paperwork as abattoirs.

Perhaps, for many, the real difference is seen in price reporting. It is beyond me how anyone truly understands the difference between the auction price and some quoted deadweight prices.

The latter are based on one of four dressing specifications (cold; KKCF; old EEC and new EEC). And thats without the wholly questionable factory or plant spec, which can raise serious questions about transparency. For example, theres a 4% difference between cold and EEC spec which, for a £600 beast, accounts for £24.

Abattoirs are so competitive and under such pressure from their retail clients that factory spec is often not explained, nor is it easily comparable to a liveweight price/kg.

And what if you have a query about the grading of your beasts? Who can afford to travel the often significant distances to see a beast on a hook?

As the saying goes: When a beast is alive its worth its weight in gold; when its on the hook consider it sold. In the auction, a beast can be withdrawn, but who would take a carcass home?

But conflict between deadweight and liveweight does nothing for farmers. Thats why auctioneers have introduced quality price reporting. In essence, it amounts to quoting the days market price for a supermarket spec beast, typically R3 or 4L.

If it adds to farmer confusion when comparing time and deadweight prices, it must be explained more fully. Either way, auctioneers would totally endorse a single, quotable dressing spec.

Im not against supermarkets. Theyre clever and convenient. But if producers want a fair price-setting system, the markets need your support to ensure competition for stock.

Without it, only we as auctioneers and you as farmers will lose out.

At Ayr, we will continue to run the market based on transparency and trust. That has seen three generations working on behalf of farmers for 110 years. It provides the fair setting of prices demanded by the present government.

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AUCTIONEERS

13 August 1999

AUCTIONEERS

COMMENT

MARKET

Sennybridge

AUCTIONEER

Gareth Griffiths

(Clee, Tompkinson &Francis)

THERE can be little doubt that as the fortunes of the sheep men have become tighter, particularly in the main hill areas, the value of the working sheepdog to replace hired labour has increased for many.

That may go some way to explain why over the past year – when just about all sheep, lamb and, in particular, cull ewe prices have suffered – the average price for sheepdogs at the Sennybridge sales has held strong.

A look at the auction records shows a good trade for trained dogs. Over the past three years the average price achieved has been £420, but if you look at top end of the market, the average for the best quality dogs and bitches demanded for breeding and trialling has been three times that at £1250.

Although all dogs entered into the Sennybridge sale must have been worked and are demonstrated to prospective buyers on the day, the call for partly trained animals which require further schooling has also remained firm. These provide an opportunity for some shepherds to supplement income.

As money has got tighter, the value of the working dog has increased in its capacity to be a greater part of the labour force. That trend may influence the call for fully trained dogs in the future, but as with all other buying decisions, the main determining factor will be price.

That is not helped when the current sheep market presents a disastrous situation for hill producers with the crash in cull prices affecting breeding ewe values; the other main income earner after lambs sales. As belts tighten, producers may think of spending less, although auction reports imply many are still investing in a working dog.

Experienced shepherds and trainers have an eye for picking out the traits of a good dog. Basic requirements are obedience to commands (stop, lie and fetch) with a good out-run around, rather than through, the flock.

While many are good workers, prospective buyers must remember dogs are not machines. Handlers must ensure they bond with the animal and develop a sound working relationship. Even the best dog cannot be expected to give its best when put in a strange place for the first time; they need to acclimatise.

Get that right and its not uncommon to see an eight-month-old pup in the ring showing natural ability handling sheep, schooled and back at auction at 12-18 months old. As a trained dog, it could still be working when 10-years-old.

In the 23 years Clee, Tompkinson & Francis have been holding these sales there has been a change in buyers weve seen. Notably, aside from supplying main sheep areas of the England/Wales borders and the north-west, a number of dogs are going overseas.

The trade to Ireland (for the best quality animals) remains firm. Likewise, some are now going to mainland Europe and as far away as America. Bitches with good bloodlines – particularly those going back to an international trial winner – may be used for breeding and are keenly sought after.

But overall the value of a working dog remains sensible. Compared with the price tag for a pedigree dog kept as a pet, the sheepdog continues to be a realistically valued commodity.

Next sheepdog sale at Sennybridge is on Aug 21. &#42

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AUCTIONEERS

30 July 1999

AUCTIONEERS

COMMENT

MARKET

Chelford Market

AUCTIONEER

Roy Waller

(Frank RMarshall &Co)

A DECISION on the future of the calf processing aid scheme was expected at the Royal Show, and since its demise was announced some calf prices have slipped, giving an indication of what is likely to happen in the future.

As a senior auctioneer at one of the largest calf markets in the country, I feel disappointed that at no time were we (auctioneers) consulted as to what might happen with the schemes introduction.

It has distorted the market for calves and personally I am against anything that artificially influences prices outside that of supply and demand. However, for many of our customers the scheme replaced income from calves which were exported before the ban came into being.

The scheme had its faults. The difference in payment for Continental bulls and dairy types increased the number of black-and-white beef crosses overnight. A two-tier pricing system should not have been introduced.

Likewise, the age restriction at one time only allowing calves between 7-10 days old to be entered on to the scheme via the auction saw 95% of eligible scheme calves being born on the same three days each week.

More recently, the last three weeks have seen trade affected as calf buyers have held back from the ringside in anticipation of lower prices.

Looking ahead, the best Continental bull calves will still trade between £140-£180; medium sorts between £90-£120; and poorer bulls at £80. A lot will depend on conformation and breed. For example, Mondays (July 26) trade at Chelford saw Belgian Blues as the top 10 bulls and also eight of the top 10 heifers.

Dairy types will suffer with only the top 5% in quality terms making over the scheme. Medium sorts will be £20-£30 and the majority of Holstein types back at £6-12 a head.

What will help prices stabilise is a quick end to the harvest. More producers will then be looking to fill sheds with cattle for the winter. If it is drawn out then these predictions could be put off track.

For those producers who have been receiving £47 on the scheme, future prices may be unwelcome. But from an auctioneers position, standing in the middle of calf vendor and finishers, the removal of price support will allow the market to recover to its natural level quickly.

Market forces will determine some calves futures: If tagging at £3 a calf, haulage and market commission at £7 a head and the proposed introduction of a passport charge also of £7 each are taken into account, where market prices are lower (than costs of £17) the poorest types will be left to sink or swim. That leaves industry to decide what to with them to avoid a welfare problem.

Ultimately, calf prices are determined by the beef trade and returns are not what they were. Its surprising that the present calf trade follows current beef price (92p/kg) and not what these animals are likely to be fetching in 12-18 months time. But who can forecast that?

Whatever happens, it is the auction system that will set the price. &#42

There has been resistance to purchase some calves ahead of a predicted price slump and values have dipped, says Roy Waller.

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AUCTIONEERS

23 July 1999

AUCTIONEERS

COMMENT

MARKET

Hill Farm Sheep

AUCTIONEER

Peter Crichton

A glance at the current farmers weekly published sheep prices compared with a year ago brings the price differential over the last 12 months into sharp focus.

This weeks average SQQ stands at 83p per kg liveweight compared with 107p a year ago. This equates to a loss of £9.12 for a typical 38kg lamb.

Although much of the reduction is blamed on the collapse of the Russian market for skins, another major factor has been the tight control that the major supermarkets retain over the retail trade for sheepmeat with consumers.

At the start of the Easter lamb period, prices remained dull because many major supermarkets decided it was not the right time to switch to new season lamb, perhaps because if they had, prices would have risen.

Once supplies had built up by mid-May, retail demand and in-store promotion improved, but producer prices failed to hit earlier levels and finished lambs peaked at 123p a kg compared with 135p in May 1998.

At the same time, UK flockmasters have been faced with a price collapse for cull ewes with returns in some of the uplands areas averaging no more than £4/head.

With wool prices also hitting the deck, shearing costs of up to £1/ewe are competing with wool realisation prices struggling to hit 60p/fleece. The outlook remains bleak.

The current strong £ continues to hinder export opportunities and although there is some demand for light 8-12kg lamb carcasses into Greece, most of the conventional 34-40kg liveweight lambs will have to look for homes here in the UK.

With plenty of sheep available throughout the eastern counties supplies through Hill Farm Sheep have remained high with 15,000 head handled since the scheme started in February. Producers are guaranteed the MLC price ruling on the day of delivery on a liveweight basis.

Price trends in the weeks ahead indicate values continuing to fall. And if the usual pattern is followed, producers are advised to sell as many lambs as possible that hit the 35kg market rather than to play the store sales which are expected to be oversupplied with light lambs this year.

The same problem of supply exceeding demand is forecast to hit breeding ewe returns with the best Mule shearlings struggling to breach the £50/head barrier and secondary sorts expected to range between £30 and £40 each.

With producer returns remaining under pressure, organic and farm assured options are all worth looking at to try and keep cash flows at higher than average levels. The same could also be applied to the direct from the farm to freezer sales of half or whole lambs as a way to add value to their output.

Commercial lamb producers should continue to sell all lambs which fall into the finished category now before they lose condition and leave the late-born 1999/2000 hogget market to specialist finishers with access to roots and other fodder crops. &#42

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AUCTIONEERS

16 July 1999

AUCTIONEERS

COMMENT

MARKET

Cardigan Market

AUCTIONEER

Malgwyn Evans

(J J Morris)

WELSH auctioneers are against proposals to establish a farmer-owned co-operative for sourcing and marketing of finished stock across Wales, saying it could ruin auction marts, cut competition among buyers and threaten returns to producers.

It is a sharply contested issue, according to the chairman of the Welsh Livestock Auctioneers Association, Cardigan-based Malgwyn Evans.

The hope that the co-op would help promote Welsh produce and attract investment in the livestock sector (see Business) cannot be argued with, he says, but its proposal to effectively wipe out marketing of finished stock through marts is bad news for auctioneers and producers alike.

Bad for farmers

"We (the association) cannot accept the idea because it is not in the interests of farmers and is detrimental to auctions. If we look further than looking after our own corner, it does nothing to encourage competition for finished stock and could play in to the hands of retailers. That has got to be bad for farmers."

Auctioneers have suffered as returns to producers have fallen and in some cases that has seen market incomes crash by 50%, he says. And with a proposal to source direct off farms, further pressure is likely.

If established, the co-op would see the formation of what is essentially a Welsh producers club. In the absence of a "vibrant" live marketing sector, processors and major retailers would then be able to drive down prices, warns Mr Evans.

He is concerned that once deadweight-type pricing grids are introduced, those entering stock will be offered a "price-of-the-day" set by one buyer instead of the full benefit of true competition from several at the ringside competing for stock.

But the ramifications could go much further. "If those behind the proposals and producers think markets can survive off the income from selling store animals and holding special sales, they should think again.

"With current overheads, we just cannot do it," Mr Evans maintains.

And once the market closes and stock is sourced direct, there will be knock-on effects for town centre businesses will the loss of employment and associated trade from vendors, it is suggested.

But is there anything positive behind the proposals? Mr Evans believes there is. Talk of attracting EU funding is welcome and could be used to develop a processing plant to build sales of value-added Welsh meat products. But these must be sourced through the existing supply chain.

Furthermore, if EU money is forthcoming, investing in information technology could help ensure producers have up-to-date market prices and information to help increase returns. It could also fund a database of potential buyers, both at home and abroad, for finished stock.

Eliminate competition

But the associations bottom line is the co-ops proposal to encourage direct sourcing is bad for business. "It would completely eliminate the competition between buyers which the auction system has always encouraged," says Mr Evans.

Producers reaction has yet to be gauged, but it likely to come after this weeks meeting to announce what officials, including the co-op action groups chairman John Lloyd Jones and MLCs Huw Thomas, want producers to invest in the project.

If the proposals are pushed through, the association is convinced it will add more bureaucracy and administrative costs to livestock marketing across Wales. &#42

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AUCTIONEERS

30 April 1999

AUCTIONEERS

COMMENT

MARKET

Uttoxeter, Staffs

AUCTIONEER

Mark Elliott

(Bagshaws)

PROSPECTS for a marked rise in dairy stock values looks unlikely, especially with the threat of a further cut in milk prices.

So says Mark Elliott having laid down the gavel after another busy mid week sale of dairy stock at Uttoxeter. With the start of a new quota year and favourable conditions for turning stock out buyers were in buoyant mood for the mixed offering of commercial and pedigree milkers.

"Trade is up by about £70/ head to average £600 with bids topping out at £1370," he says. Thats not bad for an industry facing the threat of another cut in prices on the horizon despite the promises of milk buyers.

Despite this seasonal upturn, milk price cuts have taken their toll on trade in recent years. "Were still some way off the better days of the mid 1990s. Prices have slipped downwards ever since," he adds.

Pulling out the auctions record book the pages of figures reveal a almost unreversible trend. In January 1994 the offering of 125 cows entered for the mid week dairy sale averaged £947 each. Three years later the same sale saw prices slip to £896 a head. And this year it was down further still at £557. "Id like to see the prices of 1994 again," he remarks.

Its unlikely to happen, he suggests. The reality for buyers coming to the ringside is a much tighter economic climate both at present and in the future. "Some are getting out due or retirement while others are realising the capital asset of stock and milk quota."

Even larger estates with temporary leys on IACS-registered land are pulling out.

Grass is ploughed up and replaced by cereals. This can cut labour, spread machinery costs and has the security of arable aid payments, he says.

But its not all gloom. Those presenting top quality heifers and young cows are finding an army of willing bidders, albeit at todays lower prices.

"Buyers want modern genetics, but nothing extreme. Those giving 35 to 45 litres daily with records to show a good second heifer lactation and low cell count are taking bids between £750-£800.

"For what Id call second quality heifers – those that are growy and will go on nicely – buyers can have their pick for £600," suggest Mr Elliott.

There is a trend towards buying heifers and cows that arent stale, but can leave the ring and add to the bulk tank at the next milking. "New entrants in particular will go for cows in milk to help pay off rent without the wait."

He doesnt see any "flashy prospects" for stock values. The flow of on-farm dairy sales continues unabated. And with industry analysts suggesting more producers have yet to get out, as Mr Elliott says: "If theyre right, theres more cows to come forward."

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AUCTIONEERS

26 March 1999

AUCTIONEERS

COMMENT

MARKET

Hexham

AUCTIONEER

Scott Donaldson

(Hexham and Northern Mart)

MARKETINGS of finished cattle will be more orderly this spring than in the past.

No big glut is hitting the market this month after steers came off the two-month subsidy retention period. It is, says Mr Donaldson, a legacy of animals slow progress last year in the face of inclement weather. "They were poorer all summer, with a lack of sunshine and a lack of grass. They went into sheds less fit than usual in the autumn.

"Rather than seeing thousands and thousands of steers sold in early March, it looks likely to be a more staggered marketing pattern."

Animals that would have been slaughtered at, say, 23 months old may now go back to grass this summer and arrive in the early autumn at 27 or 28 months old.

"This pattern will suit the finished trade," says Mr Donaldson. "Stability of supply is what people want. Breeders and feeders alike seem able work at the current levels."

Store values, meanwhile, have stayed level, mirroring this situation. Yearling steers on blue CIDs are changing hands for between £380 and £480, with similar-age heifers at £300 to £400.

And annual consignments are making only slightly less – in some cases just £10/head – than 12 months ago. "Considering the weights, they may even be dearer."

But the bad weather last year has meant older sorts are now passing through the store ring. "There are more just ready for the second premium claim to be taken – or those on red CIDs with both already claimed."

Demand for stores looks like staying firm, partly as people re-invest money made on cheaply-bought stores last autumn. "Some people bought heifers for £170 in October, sold them in February and doubled their money."

Buyers, though, are keen to get ever-more information. "They want to know what type of cow the animal is out of to assess what the growth rate is likely to be – because a small difference can make all the difference between profit and loss."

More demand is also evident for farm-assured store cattle. "Its not that they make a lot more," says Mr Donaldson. "Its that they will have more customers keen to buy them if theyre assured."

The net effect is a gap of £130-plus between the best and worst stores. More of the better-quality sorts are now traded earlier in the year than was traditionally the case. "The top draws now tend to change hands in February and March, with vendors keen to clear out their sheds for cows or ewes."

And this drive for quality has been mirrored among the cows and calves, with best-quality heifers with spring-born bull calves at foot making £800 and those with heifer calves worth £650.

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AUCTIONEERS

30 October 1998

AUCTIONEERS

COMMENT

AUCTIONEER

Robert Hurst

(FPDSavills)

Lincoln

SECOND-HAND machinery prices have fallen at least 10% since last autumn, says Robert Hurst, his comments coming with the sale season in full swing.

Good kit, however, continues to trade well as farmers look for a money saving alternative to new purchases.

Sterlings strength has been the main factor, he says, hitting export demand. Economic factors overseas have also taken their toll. "Its not just that buyers in Russia, for example, are prepared to pay less – but money-market problems mean they cant afford to buy at all."

Dealers, meanwhile, are more cautious of getting caught with stocks. "The dealers used to underpin auctions. But now they are certainly buying less on-spec."

This was apparent at an auction for Coulton Farms at Apethorpe, Northants earlier this month, when a giant Claas Lexion 480 combine went under the hammer. "I just knew that wasnt going to go to a dealer – they wouldnt have wanted to have that sort of money standing in their yard."

And Mr Hursts hunch was proved right, with the two-year-old combine – the first-ever of this model to be sold by auction – snapped up by an Essex farmer for £80,000.

Indeed the bigger items have held their second-hand value better than some of the smaller goods.

"In these tough times, farmers are looking more at ways of reducing the cost of production per acre or per tonne of output. The really professional operators are investing to cut costs. The days of spending because people are awash with money and want to cut tax bills are long gone."

At the same time, though, industry rationalisation continues. "The big farmers continue to get bigger, partly because, with the pinch on, the smaller producers look more to opting out by putting their land on farm business tenancies or contract arrangements."

And unlike in the past, more are also getting out mid-career. "As industry fortunes decline, people are taking the attitude: Why should I carry on doing this, eroding capital, on the off-chance my children decide to follow into the business."

Such trends have boosted the amount of second-hand machinery on the market this autumn to record levels. "So if youre selling, be realistic about prices," says Mr Hurst.

Manufacturers are offering bigger discounts – and this has a knock-on effect of what people will pay for nearly-new.

"Setting too high reserves might just mean youre left with kit that, having sold the farm, you have no use for. You then have to think about what to do with it – and selling it privately and advertising again costs money. And machinery, unlike quota for example, is depreciating in value all the time."

The secret to getting good prices is offering well-maintained, clean and tidy goods, says Mr Hurst. The larger sales, with several major items, also tend to pull a bigger crowd, and this, in turn, usually results in higher prices for the medium-sized items.

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AUCTIONEERS

17 July 1998

AUCTIONEERS

COMMENT

MARKET

Longtown, Cumbria

AUCTIONEER

Haig Murray

(Cumberland and Dumfriesshire Farmers Mart)

TREAT cull ewes a little more like lambs when it comes to marketing them.

Thats Haig Murrays advice to farmers, some of whom have, he says, traditionally treated ewes as nothing more than a by-product.

But that attitude should change, as the pressure on incomes intensifies. "Rather than just dumping them on the market once or twice a year, it makes sense to sell them when they – and the market – are most favourable."

He advises farmers to speak to auctioneers about the trade and keep a close eye on the animals condition. Of prime importance is not letting them get too fat – something that can happen virtually overnight.

"Theres no point in keeping them on, thinking that if they are getting heavier and fatter they are getting worth more because they are not."

Farmers have delayed selling ewes in recent months, not least because prices have been so much lower than the levels of a year ago. At Longtown last Thursday, for example, light and heavy ewes averaged £21 and £31 respectively, down £8 on 12 months earlier.

Entries, meanwhile, are running about double the level of last year, with last Thursday seeing about 6000 head forward.

"It is partly because producers, aware of the lower values, have been putting off the evil day of selling for a long time. But now the time has come when the ewes have to go." Most of those coming in are broken-mouthed animals, which have reared five or six crops of lambs.

Big numbers are also arriving in the market because the breeding sales are only a few weeks away and money and space are needed to accommodate the newer ewes.

At the upper end of the price scale are the big Suffolks and Texels which can make £40 to £50, while the small, plain hill-type sorts are changing hands for less than £15. Demand exists from graziers for those at the bottom end of the size range. "If you can buy one for £12 and turn it in to a £20 one, that will pay more than a lot of store lambs have."

Farmers selling ewes, however, will need to find some money from elsewhere to put with the proceeds to afford replacement breeders, says Mr Murray.

"A lot of people are talking the breeding market down, but there is always demand for them. Whether the lamb trade is good or bad, you cant breed lambs without ewes."

This means that the top-drawer North of England Mules will again be changing hands for £85 plus, he predicts. "Buyers tend to select on quality not price. They will pick a pen that they like the look of, then pay what they have to, within reason, of course."

With no sign of the numbers declining, prices of cull ewes, meanwhile, could fall further. The weather will also play a part. "If there is a heatwave, one of the first things that people stop eating will be mince and pies.

"But it is worth making the most of them – as with every other agricultural commodity."

Farmers looking to invest the proceeds of cull ewe sales at this summers breeding sheep auctions could find their money wont go very far, with cull values having fallen. All the more reason to sell them at the optimum time, before they get too fat, says Haig Murray.

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AUCTIONEERS

10 July 1998

AUCTIONEERS

COMMENT

MARKET

Lancaster

AUCTIONEER

John Hughes

RECENT rises in prime cattle prices are "long-awaited and much-needed," says John Hughes, but he warns farmers not to get carried away and pay too much for stores as a result.

Finished beef values rose 10p/kg in June, bringing a feeling of optimism. This gradual rise was, says Mr Hughes, better news for farmers than if levels shot up too quickly. "Because then the trade has problems selling it and is desperate to force levels down again."

Bidding for store cattle also became more frenetic in June, taking levels back in some cases to pre-BSE levels.

"Do your sums very carefully," he cautions. The amount people bid is often governed by the money made by the finished beasts they replace. Dont fall into the trap of thinking that boom times are on the way."

The premium payments are driving the buoyant demand. "But you have to wait for the payment – and you may be buying on borrowed money."

The higher prices have prompted some people to sell stores. Numbers, having run below year-earlier levels in the spring, are now above last summer, with more than 120 typically sold a week at Lancaster.

And even heifers which dont qualify for subsidy have been keenly chased. "Some have been dearer in the store ring, in p/kg terms, than they would have made in the finished ring – and it isnt as if they have a lot of room to put more weight on."

The short-keep animals, which have room to put flesh on but can still be finished by the autumn, are most strongly sought after at the moment. The blue-carded bullocks that will need wintering look the cheapest, at less than £1/kg, says Mr Hughes.

The trend away from dairying is also prompting farmers to seek stores. "Ploughing up the land certainly isnt an option for most."

The buoyant demand may not, however, continue unabated, reckons Mr Hughes. "In the autumn, we sell a lot to Yorks buyers who, although buying stock at what looked to be realistic prices at the time, have had a trouncing in each of the last three years. Maybe this autumn they wont come back."

Finished cattle prices, meanwhile, seem set to hold until supplies coming off grass rise. Imports are also down, says Mr Hughes, citing recent trade data. "Long may this continue." The inclement weather is also helping, encouraging consumers to eat more beef than they would in a heatwave.

When it comes to buying calves, meanwhile, there is more realism in what is paid. Last Monday at Lancaster the best Belgian Blue bull calf made £150 and decent continental cross heifer calves can be picked up at £40 to £60.

People are paying realistic prices for calves – but may still be paying over the odds for stores, given the current finished trade.

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AUCTIONEERS

12 June 1998

AUCTIONEERS

COMMENT

MARKET

Ripon, North Yorks

AUCTIONEER

Norman Bagley

WITH supermarkets turning the screw on livestock marts, farmers are now more vulnerable than ever, says Norman Bagley.

His comments follow Tescos announcement that it plans to buy all cattle and sheep direct – completely bypassing auctions – within two years. If supermarkets think auctions dont have a useful role, says Mr Bagley, why do they still use them so much now?

"Farmers have their backs against the wall, financially, and the lure of the short-term buck is, for many overwhelming. But this short-term gain will, as history proves, result in the classic long-term stitch up.

"The dangers of being subservient to one all-powerful sector have been well demonstrated last week with the news that the countrys largest pig slaughterer, Malton Bacon Factory, is to axe its long-standing AAPP-related contract. This will mean a move to a more "spot-price" related structure, possibly with week-to-week pricing, just like auctions.

"These pig producers have been forced to jump through hoops to meet upgrades in welfare requirements. And their bonus? To be told pigs can be bought cheaper elsewhere, irrespective of the welfare implications."

Mr Bagley also questions research cited by Tesco, supposedly showing customers preferred meat from cattle bought direct from farms rather than from livestock auction.

"Whose research is this and whose questions? Let us have independent, verifiable evidence. Other surveys give the opposite view, putting prices, colour, fatness and packaging before welfare.

"And who says direct from the farm is more welfare friendly, anyway? It can involve an all-day pick-up merry-go-round, collecting three here, five there etc."

Supermarkets have only one criteria – price, says Mr Bagley. Without auction marts as a comparison, the price paid by the big retailers to the big abattoirs will be governed by the lowest price meat can be purchased elsewhere.

Auctions, he says, provide a wide range of buyers that add value to a full range of livestock – not just a narrow spec. At Ripon, for example, a typical week sees about 60 meat companies represented.

"But farmers should not just use auctions for historical reasons. We cannot expect loyalty for loyaltys sake. The sector has to give a price-competitive service. High rates of commission to cover bad credit control and self-imposed bad debts are not on. Auctions must be ruthless in their buyer appraisal and credit terms. They must get away from the syndrome of selling to any fly-by-night firm just to prop up prices."

The Meat and Livestock Commission must also allay the fears of the auctions that they have just become a promotion agency which is far too close to the large abattoirs and supermarkets, says Mr Bagley.

"The position of MLC chairman, Don Curry, who has a large foot in the Tesco camp through his chairmanship of the supermarkets supplier, North Country Primestock, needs explaining. Since NCP producers are not charged a commission, one can only deduce that a direct commission is paid by the abattoir to NCP. So who are NCP representing?" And does Mr Curry agree with Tescos view of auction marts?

The MLC, having given up providing an independent weighing and grading service, are now powerless to impose on abattoirs the one layer of visible comfort to producers – a single, universal specification standard, instead of the present four or five which include the ambiguous "company spec."

Renewed tensions between supermarkets and auctions are "regrettable" as it seemed that, post-BSE, a dialogue had developed, says Mr Bagley. "Tescos comments, however, have blown that myth to pieces.

"Tescos on-our-terms-only rules do not bode well for the most important link in our chain – the farmer, let alone the auctions."

Beware the lure of the short-term buck, says Norman Bagley.

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AUCTIONEERS

29 May 1998

AUCTIONEERS

COMMENT

MARKET

Chippenham, Wilts

AUCTIONEER

Peter Kingwill

(Alder King)

HOWEVER busy you are with other jobs in the next few weeks, do not neglect to sell cattle at the optimum point.

That is the advice of Peter Kingwill, who says that when silaging and harvesting are in full swing, stock marketing can get relegated to a maybe-do-it- the-week-after-next-if-time-allows job.

"It is critical to sell at the right time – when the stock and the market are at their optimum. Auctioneers should be able to tell you which day there will be most buyers in the market for your animals," says Mr Kingwill.

"There is also a range of other information available daily to help you with the job. It is worth looking on the internet and at Meat and Livestock Commission data.

Quickly past their best

"People are more conscious of the dangers of postponing selling sheep – which can go from thin to fat in just a few days – but cattle also go past their best quickly."

And there is a big discount for those outside the "just-so" specification, says Mr Kingwill, with current prices ranging from 60p to 100p/lw.

Most sought after bullocks are the O+ to U conformation ones, weighing about 600kg lw, grading 3 or 4L. "Nobody wants fat, thats for sure."

Farmers, he says, have reacted to changing market demands. The 650kg-plus steers, traditionally sent abroad, have become far less common since the export ban began. And the 30-month rule means that people now use better rations – possibly with more home-grown cereal. "They have become better managers of the timescale.

"It is a shame after all this money, time and effort has been invested in the cattle to see them suffer a discount because of an oversight in marketing."

Those farmers that do sell animals in the coming months may feel the beneficial effect on the market of tighter supplies. Numbers in May have been plentiful, but mid-summer numbers are certain to shorten.

Prices constant

Whether this will make any difference to prices, however, is another matter. "We thought April would be better than March, and that May would be better than April. But this has not been so. Prices have stayed constant around the 80p/kg lw point."

The calf slaughter scheme is also affecting supplies. "Whether it has been because of the generosity of the slaughter payment or because it is a simple tool for management purposes, farmers have adopted it wholesale. It has taken more calves out of the system than would have gone abroad in the absence of the export ban. We wont see a lot of Friesian steers coming through the finished market this summer."

Some beef producers have also quit the business after such a depressing time. "Especially the older generation, who have not only felt the tough times, but also may have had more problems coping with the mountain of paperwork foisted on the industry." &#42

Silage making and harvesting may be time-critical jobs – but do not neglect to sell cattle at the optimum time or returns will suffer.

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AUCTIONEERS

22 May 1998

AUCTIONEERS

COMMENT

MARKET

Clogher, Co Tyrone

AUCTIONEER

William Wilson

(R A Noble & Co)

RESULTS from sales are dispelling the myth that there is no money left in the dairy industry, says William Wilson.

Four Northern Ireland auctions in which he was recently involved, for example, saw averages over the £1000-mark.

It highlights the strong demand for the best cow families, says Mr Wilson, as buyers compete fiercely for the top end of the market. As well as pedigree, buyers want good type and index figures.

But such buyers have exacting requirements: "Yielding 10,000kg/ year is no longer necessarily enough – people want cows that will do 12,000kg. At that level, they have to have good protein figures, probably giving 3.4% or above," he adds.

Attracting the highest bids was the Ards herd, which saw a new Northern Ireland record price of 12,500gns paid for the home-bred heifer, Ards Juror P Ruth.

Bought by a consortium, which included two overseas buyers, she will be stabled with the Joylan herd in England. "Where," says Mr Wilson, "she will no doubt make a big impact on the show circuit." The Ards offering saw an average of £1590 for 90 head.

Other averages for McCollum Bros, Colraine and S W Hutchinson & Son were about the £1100-mark.

And not far behind, at £1027, was the average seen for the draft of 50 heifers and young cows from the Newry-based Finch herd. Central to the high prices were the "beautiful udders and oceans of milk" exhibited by the stock, says Mr Wilson. Many were doing between 7gal and 8gal/day and had been sired by well-respected sires including Juniper Park and Donnandale Skychief.

Lower milk prices have, however, impacted on the dairy trade at the lower end of the pedigree world and in the commercial sector. "Stock that, two years ago, would have £800 or £900 is now making half that.

"Nobody wants older animals, those at the second-calving stage or older. And heifers that have poor sires or bad udders or are giving just, say, 4gal/day can be difficult to sell."

Together with the drop in quota values, this adds up to a lot of money for people quitting the industry this year, says Mr Wilson. "For one farmer who quit this spring, we calculated the cows and quota netted about £100,000 less than they would have done a couple of years ago."

The prospects for dairystock values are a little brighter following the recent weakening of sterling – augering well, as it does, for milk values.

And milk prices in Northern Ireland are unlikely, reckons Mr Wilson, to fall to the lows seen on the mainland, not least because the big Southern Ireland co-operatives are now making inroads north of the border, increasing competition for milk and putting a bottom in the market.

It has, meanwhile, been a busy couple of months for dairy dispersals. "Summer calving has never been favoured – so people prefer to sell stock fresh in the spring or autumn, when it is at peak production."

These were among the 16 tractors sold at Home Farm, Elveden, Suffolk last week for the Elveden Estate. Top price was £17,850 paid for a 1994 John Deere 7700. Bidding was lively, reflecting the standard of maintenance, said auctioneers Cheffins Grain & Comins.

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AUCTIONEERS

10 April 1998

AUCTIONEERS

COMMENT

AUCTIONEER

Chris Norton

(Norton and Brooksbank)

PREPARATIONS have long been underway at Elm Farm, Skeith, Suffolk, and in the Tetbury offices of auctioneers Norton and Brooksbank.

Hardly surprising, really, as next weeks (Apr 16) dispersal of the 500-head Mendlesham herd of pure British Friesians marks one of the biggest one-day sales ever held.

"A challenge," auctioneer Chris Norton calls it. He has sold big numbers before: Four-hundred on-farm in Hampshire, 300 at the firms sale centre at Penrith, Cumbria – but this is the big one.

"All the same, it is probably better to concentrate the event into one day. A lot of potential buyers may have been put off by the prospect of having to spend two days away from the farm at this busy time of year," says Mr Norton.

"If it was one of the top pedigree herds in the country it would be different. But the Mendlesham animals are very commercial, managed on a low cost system based around loose housing, haylage and limited concentrates."

The decision, meanwhile, was taken to hold the auction on-farm – in what is hardly dairying country – rather than ship the stock westwards because of the big numbers involved and the farms close proximity to the A14.

"Local demand has been limited, with relatively few dairy herds in East Anglia. But there has been interest from around the country. We have had one inquiry from Northern Ireland."

But the auction comes against a background of the lacklustre demand for dairystock. Milk prices have slumped and lower cull cow and calf values have also taken their toll. "There is not a lot of joy at the moment."

One advantage is that it is the beginning of the milk year, says Mr Norton. The autumn used to be the preferred time for a sale 15 years ago, because most herds calved in that season and that was the time when the cows were "close to profit". Not so anymore, with more farmers having moved towards spring calving, dairies paying bonuses to encourage more even supplies and the autumn trade sometimes suffering under the shadow of high quota values.

Also in the herds favour is its age. There are 200 cows, most first-, second- or third-calvers, 150 in-calf heifers and 150 head of youngstock. "They have got a lot of life left in them."

The calving pattern will also be a plus point, with a third of the cows due in April, May or June, and people now increasingly looking to buy such relatively cheap to produce summer milk.

"People will be out looking for cheap milk to put in the tank at this sale. Buyers may not be prepared to pay a lot, but they will be looking for cows. At the recent Croxdenabbey sale, for example, there were plenty of people bidding. The price they bid to may not have been a particularly high one, but bidding they were."

A lot of the Mendlesham stock should, therefore, end up making between £350 and £550, reckons Mr Norton. "And from the sellers point of view, anything over the £300 cull value is a bonus."

But it will probably be a far cry from what the top-notch pedigree animals are making, says Mr Norton. Less affected by the post-BSE market slump, they continue to command a big premium over commercial beasts.

At three herd sales this year – Comely, Hemble and Beechbarn – prices topped 5000gns. "The best are making a big premium over the ordinary. It was just the same when milk quotas arrived in 1984 and commercial stock values were on the floor." &#42

Chris Norton says the 500-head Mendlesham dispersal represents a "challenge".

Big dispersals always generate lots of interest, and the Mendlesham sale will be no different.

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AUCTIONEERS

20 March 1998

AUCTIONEERS

COMMENT

MARKET

Wooler, Northumberland

AUCTIONEER

Scott Donaldson

(County Auctions)

STORE cattle trade started off briskly this season, but buyers soon got cautious and pulled in the reins.

So says Scott Donaldson, after seeing bullock and heifer prices drop 17p and 15p/kg respectively in the fortnight between the seasons first and second big sales.

Averages were 112p and 98p/kg at the first auction in mid-February, as buyers from as far away as north-east Scotland flocked to Wooler, thinking animals would be cheap.

"Once they were ringside, however, they almost felt compelled to bid. The result was values far-removed from the prevailing fat trade.

"In the weeks that followed, people took a step back. If thats the price, they thought, well wait until a bit nearer turnout time before sourcing stock." Prices, as a result, are back to below those seen last autumn.

"The shortage of beef that everyone keeps talking about hasnt yet materialised. It may happen – but theres no sign of it yet so its still pure prospecting."

But subsidy payments continue to drive demand, says Mr Donaldson. At the second sale, bullocks over 500kg averaged 95p/kg (well above the prime level), largely on the back of the second subsidy available on many.

Subsidy potential also means that some farmers delay selling stock until after claims have been made. "This doesnt help the quality – when some start animals the two-month retention period already with enough finish to be slaughtered."

Quality – and with it, values – continue to vary widely. At Wooler last Wednesday, the best 620kg Limousin bullocks made 112.5p/kg. But others, which come off retention overfat and overweight, can struggle to reach 80p/kg.

Store values, meanwhile, are now at more realistic levels, says Mr Donaldson, who reckons 100p and 90p/kg are more sustainable levels for bullocks and heifers.

"At these levels, there is hopefully scope for the finisher to make money – and if they dont this year, a lot will walk away from the venture.

"The amount being spent is also linked to what prime beasts were making at the end of last year. Traditionally, the Christ-mas trade is good – at the end of 1996, for example, it was one of the bright spots. But that wasnt repeated in 1997, so theres even less money now in the pot."

If you are buying stores this spring, dont be tempted to spend too much on grass-keep. This is also subsidy driven, with people looking to increase their acreage and maximise claims. "But as with everything else, the aim should be to cut back on costs without jeopardizing stock quality."

Scott Donaldson: Store prices are now below last autumns levels.

Store cattle buyers may have been bidding hard early this season – but they soon pulled in the reins and started paying less.

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AUCTIONEERS

6 March 1998

AUCTIONEERS

COMMENT

MARKET

Gloucester

AUCTIONEER

John Pullin

(Bruton Knowles)

THE calf slaughter scheme should be extended to heifers, says John Pullin.

It is currently open only to male animals between seven and 20 days old. And at a payment of £80 a head, it is "mopping up" nearly all of the black-and-whites and a small number of the beef animals.

"Better," says Mr Pullin, "to open it across the board at a lower payment. Poorer quality beef heifers would not then go into the food chain and those black-and-white bulls that would be worth, say, £70 on the open market – but are now slaughtered – would be reared for manufacturing beef.

"This would allow spending on the scheme to be cut – which the EU is no doubt keen to do – and the quality of beef on the market would also be improved."

The variation in the standard of animals now reared is reflected in finished prices, with a gap of 25p/kg or more between the best and the worst. "A heifer that changes hands for £10 at two weeks old is unlikely to make a good finished beast."

Pressure for reform of the slaughter scheme could also mount following the trend towards dairy, rather than beef, inseminations.

"At the time of the big crash in Mar 1996, everyone was putting their cows to Belgian Blues. With the export trade still buoyant, the best calves were £300-plus and good heifers were £180. But the prices of Belgian Blues have now fallen in line with other stock. (The best at Gloucester on Monday was £205.)

"If the farmer uses a dairy bull, and the calf is a heifer, it can be kept as a replacement. If its a male, it can currently go into the scheme at a guaranteed £80, even if it is a Channel Island breed.

"Opting for a beef breed is fine if you get a decent bull calf – but what if you end up with a second-quality female?"

Cutting the processing payment, meanwhile, would make the finishing enterprise more viable, says Mr Pullin. "The best Continentals are still more than £200 at just 14 days old. Its probably only worth £550 or £600 when its two-and-a-half years old. Females, without any floor in prices set by the slaughter scheme and with no prospect of subsidy payments, are typically worth at least £100 less than the bulls."

The reason that the best calves are still making about 60% of what they were in the heyday of the export trade is because of the tighter supplies. "The calf slaughter scheme has had a big impact and the selective cull has reduced dairy cow numbers. Farmers have been culling hard, too, in view of the requirement for better hygiene.

"A few people have also delayed selling calves until they can get double ear tags. And with milk production currently over quota, some calves are also being kept to use excess milk and avoid super-levy.

"At the bottom end of the market, vendors are discouraged by the current values. At £15-£20, say, for Hereford heifer calves, people just arent prepared to release them at that money."

But dairy producers should, says Mr Pullin, send them through the market, rather than direct to the scheme. "Theres still the scheme to put a guaranteed floor in the values and, if they are good animals, competition from rearers will boost bids above this."

John Pullin: Heifers should go into the slaughter scheme.

Most black-and-white bull calves are destined for the slaughter scheme, with just a few bought for rearing.

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AUCTIONEERS

27 February 1998

AUCTIONEERS

COMMENT

AUCTIONEER

Gwilym Richards

Wotton-under-Edge, Glos

IT ISNT happening. Thats Gwilym Richards view on the widely-expected exodus of dairy farmers from the industry this spring.

The stumbling block for many farmers, he says, is the question: What now?

"In the past, one option was to sell the cows, lease out the quota and go into beef or sheep production. But returns from these enterprises have plummeted.

"Its the same with corn which, allowing costs and labour to be cut, was traditionally a popular alternative, especially if the land qualified for area aid."

Generous retirement relief allowances, which could change in next months budget, are prompting some farmers to quit dairying. "It may make sense for people approaching retirement age to leave now, especially if they have no heirs," says Mr Richards. "If youre heart isnt in the job, it is as well to get out."

But for others – the young, especially – the best bet is to hang in there, says Mr Richards. "Its hugely demoralising at the moment, especially with another round of price cuts, contrary to earlier predictions, now looking likely.

"But if your finances are sound and you are not over-borrowed, milk is, in the long term, a good business. The continuity and reliability of the monthly pay cheque is a big bonus. Think long and hard before throwing the towel in."

And as people leave the business – as some inevitably will – more quota should be available, reducing its price. The farmers most likely to leave, says Mr Richards, are the people with between 80 and 150 cows.

"With less than 80 animals, they can manage without any full-time labour; and above the 150-mark, they can justify a cowmans wages. Its between that is difficult.

"Its evident from the sales calendar, however, that farmers arent quitting wholesale. Agents are busy – but many thought they would be swamped this spring."

For those sales that are scheduled, the ones between now and early May could show the best results, says Mr Richards. Towards the end of the milk year, there are always people who are under quota looking for stock. At Ross-on-Wye last Friday, for example, commercial second-calvers made up to £960.

And with the new milk year underway in April, people are then looking for milk pre-silaging.

"The autumn is not traditionally as good a time as the spring, although trade was boosted by cohort money last season."

Coming sales will show a distinctly two-tier trade, says Mr Richards. "Animals with better genetics and higher milk production are still sought after. The days of the old-style, traditional Friesian have disappeared.

"People are looking for animals with better management. Hygiene and low cell counts are vital. The animals with fashionable sires are meeting a good demand, as are animals with good wearability.

"Records are also crucial. The back-of-the-fag-packet methodology is disappearing."

Older animals, always harder to sell, have become even harder with the bottom of market now linked to the £300 over-30-month-scheme compensation. "Two years ago, the average cull cow going through a market was worth nearer £500."

Is a big rush of dairy dispersals planned for the spring?

SUCCESSFUL DAIRY SALE

Key ingredients are:

&#8226 Young animals.

&#8226 Good genetics.

&#8226 High yields.

&#8226 Good hygiene.

&#8226 Comprehensive records.

&#8226 In-calf to fashionable sires.

Gwilym Richards: Mass exodus isnt happening.

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AUCTIONEERS

13 February 1998

AUCTIONEERS

COMMENT

MARKET

Banbury, Oxon

AUCTIONEER

Brian Pile

(Midland Marts)

TIME is running out for people with big numbers of hoggets left to sell, says Brian Pile.

Sheep on rented ground under agreements which end in February or March will have to go soon. "Certainly before the plough starts working."

Farmers will also be wary of keeping stock much later than March in the face of new specified risk material rules. Abattoirs, says Mr Pile, could be discounting such hoggets "mouthed" over a year old by more than £10.

"And no one wants to be left with large numbers after April, when spring lambs begin coming on stream.

"There are, meanwhile, a lot of hoggets still in the pipeline. With stores costing more than £40 last autumn, producers began postponing selling sheep when prices fell below 100p/kg, hoping values would rise. That didnt happen."

Some producers in the Midlands buy between 2000 and 12,000 stores in the summer and autumn, says Mr Pile. "Those with a lot still to sell will have to market some virtually every week – almost irrespective of the trade. There are not enough weeks left to spread them thinly."

So its vital now to make the best of a difficult job and present stock as well as possible. This means matching batches carefully for breed and weight. The ideal pen in Banbury is a dozen or 15, tightly drawn for weight, within 2kg or 3kg of each other.

This highlights, says Mr Pile, one of the advantages of selling through live auctions. "There are various customers, each with different requirements – so therell usually be someone to take a few heavy ones or someone prepared to have a gamble on the trade rising and take the lighter ones."

With this in mind, keep regularly inspecting stock, he advises. "They wont be altering from fit to fat in a day or two – but they need careful management and need to be drawn on a regular basis.

"Sheep must also be presented clean, so clipping in the days before taking them to mart usually pays. Another option, if the weather is wet, is to run them back onto drier ground or give them a few days in straw yards before marketing."

Live auctions are, he says, "one of the biggest producer groups in operation", sourcing stock of all descriptions and dispatching it to who and where it is required.

But the brutal reality, says Mr Pile, is that however well lambs are presented, many of those that were bought as stores will be losing money.

"Farmers are often looking for a sale value £15 or more than the purchase price. At the moment, theyre not even grossing the purchase level.

"This means people will be paying less for store lambs this summer. The established winter feeders, those that have got it down to a fine art, have already minimised costs in other areas – such as dosing and transport, leaving the purchase price the only big variable.

"People will also want to pay less for winter keep in the coming season, with 30p a head a week likely to be more common than the 50p regularly seen this season."

Brian Pile: "Time is running out for people still with hoggets."

Once bitten, twice shy? Farmers could well be paying less for store lambs this summer, with the sheep trade in the doldrums.

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AUCTIONEERS

30 January 1998

AUCTIONEERS

COMMENT

MARKET

Hay-on-Wye

Rob Meadmore

(Russell, Baldwin and Bright)

BIG numbers of breeding sheep could be on offer at this autumns auctions, as farmers baulk at the prospect of selling them on the current finished market.

So says Rob Meadmore, expecting some of the ewe hoggets currently on-farm to appear at auction between August and October.

This has been reflected in the rush to get sheep quota – and with it premium. But anyone still hoping to do this will have to be quick, with the trading period closing next Wednesday (Feb 4).

"Farmers are hoping that in addition to getting premium – probably between £8 and £11 a ewe – they will be able to sell the animals for well over £55 as yearlings in the autumn."

Last years breeding sales saw even the small Suffolk cross yearlings make this much, says Mr Meadmore. Average sorts were in the £60s and the best were making more than £80. At Herefords weekly sale, up to 2500 breeding ewes were on offer – and "the decks were cleared every time".

A lot of farmers think this is preferable to selling them on the current finished market. "A market that, since October, has gone down and down and down. This has left hoggets that were bought as £40-plus stores last year now worth about £38. And thats without taking costs into account.

"If you have spare land, running them round until next year is not an expensive system. The animals can be sheared early and stocked heavily."

But as to whether itll make any money, Mr Meadmore has his doubts. With so many more sheep on offer, prices could take a hit. This will be reflected more in the mainstream, weekly sales – rather than the big Society sales, which tend to attract a better quality of entries.

Another option would be to sell them dry earlier in the summer, after claiming premium. "This trade can be a bit chancy – but there are often people prepared to buy them and have a gamble.

"At Hereford recently, 11 North Country yearling ewes, scanned barren, made £50 apiece. The buyer was probably hoping that theyll make £80 or £90 in the autumn."

Another crucial factor determining demand for breeders will be finished prices in the coming months. And Mr Meadmore saw an upturn last week at Hay-on-Wye, one of the eight Welsh and Border markets in which Russell, Baldwin and Bright are involved.

The top price was 97p/kg lw, paid for a pen of 34kg lambs destined for export. "At one point I had six men shouting prices for a pen of lambs."

The upturn partly reflects increased buyer interest as better quality stock comes forward. But the 5p/kg rise in the average price was still too little, too late for a lot of farmers.

"Even the experts – who usually make a success and turn a profit at store lamb finishing – have been caught out this season. But dont make a knee-jerk reaction by altering your system," says Mr Meadmore. "If youve got a system, and it works five years out of eight, stick with it." &#42

Rob Meadmore: "Dont make a knee-jerk reaction to low sheep prices."

Sheep penning under way at Builth Wells, one of RB & Bs marts.

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AUCTIONEERS

16 January 1998

AUCTIONEERS

COMMENT

MARKET

Yeovil, Somerset

AUCTIONEER

Lester Williams, Symonds and Sampson

(Premier LIvestock Auctions)

STORE cattle prices will struggle to reach last years levels, when the main selling season kicks off in a few weeks.

So says Lester Williams, busy preparing for the Feb 12 Candlemas Fayre at Yeovil, where more than 1000 strong animals are expected.

"Buyers will be cautious in the face of low finished beef prices. A 600kg animal now slaughtered for, say, 88p/kg would gross £528. It might have cost nearer £600 as a store last spring."

Its a similar story in the sheep trade, with stores bought for £40-plus now making between £35 and £40. "At these rates, taking costs into account, youll be losing £9 a head. That hurts."

Candlemas looks set to see its best entry ever in terms of quality, says Mr Williams. "The 30-month ceiling on animals going into the food chain means stock has been pushed harder at a younger age. Many have been given concentrates – and fodder has been plentiful and cheap.

"The mild autumn meant cattle went into the winter looking well and, although its been wet recently, most come from Dorsets free-draining chalk hills.

"This environment helps ensure stock cleanliness, too – certainly compared with housed animals. Stores can be discounted if they are dirty, particularly if they are near to finishing."

Batches of uniform stock will again make the most money, allowing buyers to keep them together, give them the same rations and, hopefully, finish them together.

Buyers travel to the event from as far away as Scotland and northern England, often visiting PLAs two other big store sales at Frome and Yeovil in the same week.

The typical age of entries at Candlemas will be between 16 and 20 months, with most steers on green or blue CIDs. This leaves either one or two subsidy claims available – and this factor will have a big impact on bidding.

Meanwhile sellers are in cautious mood. Candlemas regular John Hoskin reckons typical runs of steers on red CIDs will struggle to make £500.

Last year, one of the Simmental steers from Mr Hoskins Dorchester farm made £675. "That seems a long time ago.

"We havent got the option to delay selling, because we havent got the housing. We will just have to take the medicine."

"Weve sold in ever-increasing numbers over the last 10 years but not, recently, at ever-increasing prices. Hopefully, the govern- ments pledge to ban beef imports unless they meet British standards – and any lifting of the export ban – will help the beef trade," says Mr Hoskin.

"Hopefully, prices have reached their lowest point. They cant get much worse – mind you, we said that 12 months ago." &#42

What they made last year Candlemas 1997


Ave price £ a head

Steers Heifers

Simmental 541 425

Charolais 525 427

Limousin 509 345

Hereford 468 355

Friesian 442 n/a

Top quality stock will again be on offer at Candlemas – but the outlook for prices is uncertain.

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AUCTIONEERS

9 January 1998

AUCTIONEERS

COMMENT

MARKET

Carlisle, Cumbria

AUCTIONEER

David Thomlinson

(Harrison and Hetherington)

REPLACE nothing, buy as little as possible and hope the cycle in fortunes has bottomed out.

Thats the advice to farmers from David Thomlinson, president of the Livestock Auctioneers Association and managing director of Harrison and Hetherington.

But as farmers incomes have dropped, so the allied trades have suffered, says Mr Thomlinson.

"Auctioneering firms, for example, have seen income from commission fall as stock values have dropped.

"While the lower livestock values are perhaps most apparent in the beef business, its also true in the sheep world, where breeding animals will be changing hands for less money than they were in 1997, unless theres some radical improvement in finished lamb values.

"Farmers also arent likely to pay big money for store sheep again next autumn, having had their fingers burnt this year. Some of those that were bought for £40 will be sold in the coming weeks for nearer £30. And then theres the costs – such as dosing, transport and selling charges – to take into account.

"Whats important, ultimately, for the farmers bottom line is the difference between the purchase and sale price. Its the same with land values – the actual level is only important to someone who is selling up and leaving the business.

"But I fear for hill farmers in the year ahead. They will be under more pressure than in 1997 when a lot sold their sheep before the lower prices began to bite in the autumn."

And while some farmers will continue to leave – and be squeezed out of – the industry, the year ahead wont see any "wholesale exit" from the land. "The time now could be to take stock, batten down the hatches and wait for some improvement. Things, after all, cant get much worse."

Auctioneers, meanwhile, are feeling the impact of the reduced number of livestock on farms. "Some dairy farmers, who traditionally finished beef as a secondary enterprise, have abandoned this to concentrate on milk in the wake of the BSE crisis.

"The calf processing scheme has also meant a lot of cattle that would have gone through the auction ring – either as calves, stores or finished beasts – are no longer in the equation.

"And the over-30-month scheme means markets no longer get the income from selling cull cows they once did. Before the BSE crisis, about 70% of such animals went through auction rings."

The year ahead will see the closure of more markets, says Mr Thomlinson.

"The big challenge will be to maintain our share in the face of increased competition from other selling methods. Auctions have always been regarded as a dirty word within the food chain and auctioneers have sometimes understated their position. But we are an integral part of the food chain and individually – and collectively through the Livestock Auction-eers Association – we need to raise our profile.

"One of the challenges, for example, will be to get National Vocational Qualifications (NVQs) for every drover in every market. A lot of them have worked with animals for years and are fully competent – but they need a piece of paper to demonstrate this."

Meanwhile, the on-going battle with bureaucracy continues. New regulations for Specified Risk Materials, which came into force on Jan 1, will add to the burden as auctioneers will have to age sheep according to dentition.

In practice, Mr Thomlinson expects this will mean "mouthing" sheep between March and May if there is any doubt if they are over, or under, a year old.

Auctioneers must also continue improving their commitment to animal welfare, says Mr Thomlin- son.

Another priority in the coming months will be to progress electronic tagging. "This will help offset the greatly increased amount of paperwork introduced to the industry over the last couple of years.

"Auctioneers, like farmers, face a tough year. But the job, like farming, has also got its rewards."

"A year of tough times for farmers and the allied trades."

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AUCTIONEERS

28 November 1997

AUCTIONEERS

COMMENT

MARKET

Guildford, Surrey

AUCTIONEER

Ashley Ward

(South East Marts)

FARMERS with store lambs bought expensively this summer should sell them as soon as possible and reinvest in more sensibly-priced ones.

Buying lambs now at, say, £36 to be sold on to the February or March market will, says Ashley Ward, give the chance of a "second bite" at profit.

"There will be no profit in many of those bought earlier this summer for £40 plus, with them only making £42 to £45 for slaughter now."

The experiences of this year highlight the importance with lamb fattening of the animals purchase price.

"Adjusting feed rates or medicine usage might shave a £ or two off cost, but most farmers have already cut outgoings to the bone. Unlike in previous seasons, I do not know of anyone who is feeding intensively. It is all grass and arable by-products."

Indeed, abundant grass supplies were the reason for the big money paid for stores earlier in the season, says Mr Ward. People were anticipating a buoyant finished trade in December, the month which in 1996 saw the "cream" of prices. Back then, £60 plus was paid for the best.

"Frustrating, then, to see how far prices have fallen back this season," he says. "But it is courting disaster to delay selling stock to try to get it heavier. Sell it as soon as it is fit and ready."

And while there is a reasonable demand for heavy lambs now – those over 45kg liveweight – this does not necessarily mean there will be in a few months time.

"The trade certainly wont be able to cope with a flood of big, over-fat sheep. As the spring progresses, there is a ready alternative in the form of New Zealand lamb.

"It offers conformity of supply and is likely to be cheap, even cheaper than in the past, because of the currency movements.

"The New Zealand product could undermine late demand for hoggets, bringing the market to an end in late March or April, rather than towards the end of May as is traditional."

Meanwhile the balance of trade shows no sign of improving. "Interest rates could go up again, and that could mean the £ sterling strengthening further."

But, on the plus side, Mr Ward doubts if there is the huge backlog of sheep on farms waiting to be sold as some people suggest.

"Flocks are continuously disappearing, too, as farmers leave the industry. There are also more non-productive units as a result of the popularity of running ewe lambs for a season without tupping them."

Mr Ward also doubts whether farmers who have taken a hit in income after the BSE crisis have, or will, turn to sheep as has been suggested.

"I cant think of one person who is keeping more sheep as a result of the BSE crisis."

For many of these beef finishers – like their counterparts in the sheep industry – there will be no margin on the stores bought earlier this year.

"Usually beef prices rise as Christmas approaches, with meat companies sourcing extra. But not this year, with buyers living hand to mouth."

Again, it was the abundant grass and by-products that held up store cattle values earlier in the summer. "Buyers from East Anglia were active in Guildford as early as July and August, taking advantage of the wet weather breaks in harvest to acquire animals."

But store prices have since fallen. While good quality Continental steers on green cards can still make £450 plus, the plain Hereford bullocks on red cards might struggle to make £200. And there are a lot of small heifers worth under £100.n

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AUCTIONEERS

7 November 1997

AUCTIONEERS

COMMENT

MARKET

Lazonby, Cumbria

AUCTIONEER

Richard Morris

(Penrith Farmers & Kidds)

A SEASON of surprises, says Richard Morris of this years sheep trade.

It has been a season when Mule ewe lambs have been worth as much as £12 a head more than last autumn.

"Doubly amazing," considering the £4/head drop in ewe premium and the low – and volatile – finished lamb values, says Mr Morris.

Last weeks auction at Lazonby, for example, saw values up £8 to average £63. Thats a 15% rise.

Among the 100,000 Mule ewe lambs sold by the company between August and October, the biggest price increase has come for the "running" lambs.

These are those that – "born later or higher up the hill" – will not be put to the ram this year.

"Demand for these has been fierce partly because a lot of farmers are locked in to an easy-care system. Theyll buy them, run them empty and sell them next year.

"Its not like fattening lambs, where you have to be continually monitoring them to get at the right weight at the right time.

"This is a low-input, low-management venture which does not, in some instances, even require the services of a shepherd."

Less increase in values has been seen for the stronger animals – those which were bought for tupping this season. Many of these have been changing hands for between £72 and £82 each.

"They will rear, say, one-and-a-quarter lambs each and will also be eligible for premium. They, too, represent a sound financial proposition because they can probably be sold next year as shearlings for £85 to £90." Overall, the plentiful grass supplies have been a major factor in the buoyant sheep trade, says Mr Morris.

"From Caithness to Cornwall, grass has been abundant. This has not happened for a long time – usually theres been a shortage somewhere in the country."

The ewe premium rules have also played a part. "People who have leased it out for two years have now had to produce against it – or forego it for lack of use.

"For some farmers, its a numbers game. They have premium for 500 sheep – so theyll keep 500 sheep."

A less important factor than many people have suggested, however, is the shift of interest away from cattle, says Mr Morris. "People who buy cattle in the autumn are neither equipped nor likely to switch wholesale to sheep."

The high cull ewe values back in the spring encouraged heavy culling, so theres been a big need for replacement stock.

Abundant grass supplies have, meanwhile, meant that farmers have not worried too much about getting sheep sold at the earliest possible opportunity.

Grass has been so long and lush that it hasnt been ideal, leaving sheep slow to finish.

Such factors mean the marketing pattern is about three or four weeks behind that typically seen. The price trend has been similarly affected.

"The seasonal low point in prime sheep traditionally comes in mid-October. But this year, values look set to remain at little over 100p/kg well into November.n

"A season of surprises."

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AUCTIONEERS

15 August 1997

AUCTIONEERS

COMMENT

MARKET

Gloucester

AUCTIONEER

Keith Flemington

(Bruton Knowles)

FARMERS losing cattle to the selective cull should approach the process as if they were selling stock – with MAFF the buyer.

That is the advice from Keith Flemington, chairman of the Central Association of Agricultural Valuers Livestock and Auction Committee.

"That means in a clean condition, not covered in muck or dung, and ideally with some milk left in them.

"Have all the relevant details about the animal, such as her breed, date of birth, calving history and latest service details. It also means PIN details, pedigree certificates, NMR records and the herds average yield." Anything, in other words, which will maximise a cows value. Details of show wins, for example, will also do this.

Yes, theres a pile of paperwork involved, says Mr Flemington, but having it to hand will make the process quicker and less painful.

The farmer can choose compensation based either on the market value or 90% of the replacement value of the animals taken.

"Market prices are fairly lacklustre at the moment, not helped by falls in OTMS compensation which have had a knock-on affect to the dairy trade.

"So the replacement value is usually higher. This reflects what it would cost to buy another animal of the same breed and quality – and in its first lactation. The farmer wants to replace good with good."

Be up front about any faults with the stock, too, advises Mr Flemington. Otherwise it just slows down the process of agreeing values. Such openness is, he says, unlikely to affect payment. "If a cow is light in one quarter, for example, the compensation will be unaffected, because she would not be replaced with a three-quartered cow."

The "scarcity" element is also taken into account. This is particularly relevant for minority breeds.

"Finding 10 in-calf Jersey heifers at short notice will probably be harder than 10 in-calf Holstein Friesians."

There is an additional payment if more than 10% of the herd is taken, but this is rarely seen. Mr Flemington attributes this to MAFFs decision, despite strong protests from the CAAV, to count in-calf heifers as part of the herd when calculating numbers. This, he says, is contrary to traditional valuation practices.

Carrying out over 100 such valuations since May for Bruton Knowles has left Mr Flemington in no doubt as to the devastating impact the cull has had on some farmers. One farm he visited had 72 cows taken under the selective scheme.

"The animals have frequently been among the herds best. And, because it targets animals born between 1988 and 1993, those taken are well-loved and proven servants.

"Emotionally, its very tough for the breeders. If the animals were being taken away and killed because they were ill with tuberculosis or brucellosis, they could understand it. But to be killed for purely political reasons?"

Early MAFF estimates that about 150,000 animals could be slaughtered under the selective scheme will be way too high, reckons Mr Flemington. He estimates the final figure will probably be less than 50,000.

"A lot of the animals identified as cohorts will have been sold as barreners, before they are accounted for by the scheme.

"The amount of compensation MAFF eventually pays out will, therefore, be far less than originally thought.

"The process will probably run for another year, with stock becoming harder to trace. Many of the pedigree herds with full records have already been visited. That leaves more difficult cases – like flying herds."n

BSE SELECTIVE CULL

Animals taken by Aug 1

England12,763

Wales823

Scotland645

NI1457

    Read more on:
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AUCTIONEERS

25 July 1997

AUCTIONEERS

COMMENT

MARKET

Frome, Somerset

AUCTIONEER

David Lock

(Premier Livestock Auctions)

CHAOS once again dominates the BSE cull, following the Interven-tion Boards announcement that it plans to slash compensation rates.

So says David Lock of Premier Livestock Auctions, who has seen the proposed cut in compensation from Aug 4 spark a rush to get cows killed before then.

But the reduction in the number of abattoirs involved has made getting slots almost impossible, he says. The backlog of cows on farms is building up daily. "Its a return to the bad old days of last year."

The planned 560kg upper weight limit on compensation will also hit farmers hard, with this taking effect at the same time as payments are lowered from 64.9p to 57.7p/kg.

"If cuts had to be implemented, I feel that farmers would rather have seen a reduced rate of p/kg compensation, rather than a weight limit. This will hit suckler producers – and about 50% of old barren cows weigh over 600kg liveweight, too."

There are also welfare issues. "Now, the danger is that feeding may be minimised in a cows final lactation to save costs. They could end up looking like hat racks."

It is, says Mr Lock, another example of the IB implementing changes without consulting enough with farmers and auctioneers who are, after all, on the front line.

Last year, the IB tried to ban markets which auctioned cows from acting as collection centres. "Thankfully, sense prevailed – and this did not go ahead."

With the latest changes very much Treasury-driven, there seems little prospect of any reversal of the proposed changes set for Aug 4, he says.

Meanwhile the weekly auctions of barren and grazing cows at Frome have virtually ground to a halt. Only those desperate to sell animals are advised to do so. "In view of the difficulty of getting stock into abattoirs, buyers have to be certain of having an outlet."

Such auctions are of big benefit to farmers with a build-up of animals, says Mr Lock. "Theyre a safety valve, allowing stock to be moved off farm."

The biggest auction of such cows at Frome saw 262 cows from 130 farms go through the ring, worth £109,000. And since "Dorrell Day" – Mar 20 last year – Mr Locks sold more this way than any other auctioneer in the country.

Once the current backlog is cleared, abattoirs could find themselves short of numbers, so the auctions might take off again.

"The IB, meanwhile, has increased the kill by some 20% this week, and is now allowing a maximum of 15 animals per producer – so this might help slightly. Mean-while we will continue struggling to find slots for the animals on my books."

That means not only badgering the local abattoirs, but also looking farther afield. "Theres no reason why stock from this area has to be killed locally. Animals can go anywhere – as long as the haulage complies with the new transport regulations.

"They could, in theory, go from here to Orkney, as there is a designated abattoir there – but hopefully that wont be necessary," says Mr Lock.n

"BSE cull in chaos again."

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  • News

AUCTIONEERS

4 April 1997

AUCTIONEERS

COMMENT

MARKET

Henley-in-Arden, Warks

AUCTIONEER

Craig Thompson

(Henley-in-Arden Auction Sales)

KEEP a close eye on your lambs this season – ideally inspecting them once a week. And sell them the moment they are ready.

That is Craig Thompsons advice to farmers if they are to avoid the discount associated with over-ripe lambs.

"If a buyer is told a pen averages 36kg, he wont want any in it to weigh over 36.5kg.

"In many cases, its better to take the odd over-fat animal out and sell it separately, rather than let it spoil a good pen. Its not uncommon to see discounts of £4 a head.

"In the summer, when farmers are busy on the land, it can be difficult to inspect sheep on a regular basis. Many in this area run more than one flock, drawing lambs from each one on a rota basis – perhaps only every third week.

"The temptation, later in the season when the p/kg price starts dropping, is to hold on to stock and put weight on it, especially in July when the glut comes and prices fall rapidly."

But when to sell depends partly on the breed with which you are working, says Mr Thompson.

"A lamb out of a Mule ewe crossed with a Suffolk or Continental sire can be 42kg and still be lean.

"But put the same sire on, say, a Beulah and you might end up with a lamb that is too fat at 35kg.

"But buyers and abattoir owners are under ever-increasing consumer-led pressure to avoid fat, so their buying specifications are becoming tighter.

"It is very rare, however, to get complaints from them about under-finished lambs. When this does occur, its usually late in the season, if grass supplies are short."

With Easter early this year, however, the early lamb trade saw lighter animals sold than was typical in the past.

At Henley-in-Arden Easter show last week, for example, about 65% were in the 33kg to 37kg range, compared with the 50% more traditionally seen.

And even then, there were one or two that were on the edge of being too ripe, says Mr Thompson.

"If farmers can make £65 a head, they will probably sell them, regardless of the p/kg price."

Henley-in-Ardens show saw the championship taken by Archie Knowless 33kg Suffolk which made £80 to the days judge David Partridge. The overall lamb average was just over 182p/kg.

Pure Suffolks are the biggest single breed seen early in the season at Henley-in-Arden, with pure Continentals making up another 10% or 15%, says Mr Thompson.

Meanwhile the trend towards slightly later lambing continued again this year.

"The established early lambers traded as normal. But among those who lamb in the conventional period, another 10%-plus put tupping back by a fortnight.

"Delaying can ease the housing and labour requirement. The lambs are born a fortnight nearer the grass. And farmers have seen a buoyant store and finished sheep trade in the autumn in recent years." &#42

"Sell lambs as soon as they are ready."

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AUCTIONEERS

21 March 1997

AUCTIONEERS

COMMENT

MARKET

Selby, N Yorks

AUCTIONEER

Chris Clubley

(Chris Clubley &Co)

FARMERS still with hoggets should sell them as soon as possible, according to Chris Clubley.

With spring lamb supplies fluctuating early in the season, demand could soon become very volatile.

Prices, therefore, could vary greatly on a week-to-week basis. "Rock and roll", Mr Clubley calls it.

"The temptation is still to delay selling, with many farmers having bought them expensively as £50 stores in the autumn. The hope is that, by postponing, they put on weight and become worth more.

"They may become heavier – but they wont be worth much more. Unlike last year, we certainly wont see averages around the £75-mark."

At Selby last week, for example, 50kg sheep, at about £63, were only worth marginally more than the 40kg ones. "And they will have eaten a lot more money.

"Plus, there is always the danger that, when the major retailers switch solely to new-season lamb, the demand for hoggets will fall through the floor. Get to May and anything can happen."

Pig producers, meanwhile, are facing completely the opposite situation.

For them, the advice is: Hang onto stock, and get it heavier.

"Apart from gilts – for which there is still an 8p or 10p/kg premium for the lighter pigs – there is now very little difference between the pence a kg price for pork and bacon-weight animals. There is only a limited market for pork-weight pigs. Once this is full, it pays to aim for heavier weights.

"Considering the cost of store stock – a six-week-old might set you back between £35 and £38 – it makes sense to finish them between 75kg and 90kg," says Mr Clubley.

And about three-quarters of the 500-plus finished pigs sold weekly through Selby are now in this range.

Unlike the volatile hogget outlook, the prospect for pig prices is one of steadiness, he predicts.

"But values look set to stay between 80p and 90p/kg for the next three months."

And somewhere in between the two situations facing the sheep and pig farmer, when it comes to weight, is that of the beef producer.

"The time of sale is partly governed now by factors such as their age – namely their progression towards the 30-month stage – or retention periods following subsidy claims.

"It makes sense, generally, to take cattle to heavier weights. But remember there isnt really a market for anything over 600kgs." &#42

Chris Clubley: Aim to put weight on pigs, but sell hoggets now.

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AUCTIONEERS

20 December 1996

AUCTIONEERS

COMMENT

MARKET

Hereford

AUCTIONEER

Richard Grainger

(Hereford Market Auctioneers)

HOW to deal with a smaller beef industry has been a question exercising the mind of Richard Grainger.

"In the wake of the BSE crisis, contraction was inevitable. But the calf slaughter scheme – now open to all bull animals – will exacerbate this.

"Of course it makes no sense to produce mountains of beef that nobody wants to eat. But this legislation is bad news for auctioneers.

"Slaughtering a calf provides 3% commission on, say, £100. But no longer will that animal pass through the market as a store or a finished beast – worth about £10 and £15 in commission respectively."

The number of beef calves going into the scheme depends on finished cattle prices, says Mr Grainger. And an important determinant of this is re-opening the export trade.

"Trade wouldnt resume to its former levels immediately, but a lot of business from, say, Italy could be quickly re-established."

Regardless of prime beef prices, the scheme will still be a viable option for bottom-end calves. And his prediction is it could take 20% of beef sorts out of the food chain.

Killing dairy calves under the scheme has already hit the marts bottom line. While most of the black-and-whites that are now slaughtered would have been exported, there were some that would have been kept for rearing in this country. Another drop in commission.

"Income is available from handling cull cows on the over-30-month slaughter scheme – but this is highly competitive and not very lucrative. At best it will only replace the income we used to get from barren cows."

The result is that auctioneers, as other sectors of the food chain, have had to make economies. "Sadly, this has meant staff losses."

The sheep throughput has been vital at Hereford, with business split about half and half between cattle and sheep, says Mr Grainger.

"Sheepmeat prices have been strong, buoyed by export demand. The continent has seen the same shift in meat buying patterns that has been evident in the UK."

For farmers, meanwhile, the worst of the pain is now over, he believes. Those keeping beef should see cheaper "starting costs" of calves and stores and, hopefully, higher finished prices.

And there has been – albeit inadequate on occasions – a compensation package.

The effect on the local agricultural pattern and landscape has not, however, been as pronounced as would have been the case had the crisis struck 10 years ago.

"On good land, farmers have switched to arable crops and potatoes, although there are a number of people who over-winter cattle. And, with it being a relatively low-profit enterprise, many of these will keep less – or none – this year.

"While agriculture is a long-cycle business, farmers are quick to react to changing circumstances."

Other sectors – auctioneers, hauliers and abattoirs – face the prospect of a lot more pain, he says.

"The whole of the meat trade is in a state of over-capacity. This was well-documented before the BSE crisis – but has been overshadowed since then. Now the problem is again reappearing and, of course, will be more pronounced than ever because the industry has contracted."

At the same time, such businesses are facing ever-increasing costs.

Installing the technology, for example, to allow electronic cattle identification tags to be used makes sense, he says. But it will probably cost the market over £20,000.

"We have to be able to justify it and this is especially difficult when, as now, the bottom line is under pressure.

"The alternative is a mountain of paperwork. And time wasted. At present there are passports, CIDs and movement documents. Work for the farmer and work for the auctioneer. Only five years ago, there was barely a single form to fill in.

"But investing in new technology will only pay back if, say, three-quarters of our customers are geared up to use it."

Meanwhile the search for a definitive answer as to how to cope with the smaller beef business continues. At Hereford and elsewhere.n

"Investment can be difficult to justify in a shrinking industry."

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AUCTIONEERS

13 September 1996

AUCTIONEERS

COMMENT

MARKET

Crewe, Cheshire

AUCTIONEER

Clive Norbury

(Wright-Manley)

CONSIDERING dispersing a dairy herd? Then head west for the best.

That is the advice from Clive Norbury, who is convinced that for a successful sale, herds based in the east or south should be moved to the strong dairying areas.

"In East Anglia, for example, the lack of dairy units results in a lack of purchasing power. There may only be room for one sale a year before demand becomes saturated."

As a guideline, Mr Norbury uses an imaginary line joining Lincoln, Birmingham and Gloucester. "Outfits based south or east of this are better moved across country; those located north or west usually sell well on-farm.

"Admittedly, potential buyers do like to see the conditions in which the cows have been kept. And an on-farm venue can make the atmosphere more conducive to a successful sale. But location is the overriding factor.

"Sometimes even units based in traditional dairying areas may be moved to a market, if there are not the facilities on the farm for the event, such as an undercover area in which to set up the sale ring."

The suggestion that moving cattle is expensive and problematic is refuted by Mr Norbury. "We have a strong transport co-ordination network, so competitive rates can be arranged.

"To move a herd to Crewe, Cheshire, it might cost, say, £15 A cow from just east of Birmingham. Even from a lot further east, the charge might only rise to £25. The key is the herd size: transport is cheaper a cow if a large number are moved.

"The vendor already has the cost of advertising, commission, catalogue printing and distribution. So the extra spent on transport is money well spent.

"Earlier this year, for example, we moved two herds to Crewe for a joint dispersal. Although it was straight after the BSE crisis broke, average price for one of these herds was £1900.

"This is probably between £300 and £500 a head more than would have been obtained had it been sold in Suffolk."

Of the 240 animals sold in this case, about one-quarter headed back east, proving that any potential buyers in those areas will not be precluded, especially if it is a well-respected herd, he says.

"Its not as if theres the transport cost back home to be considered, either. At a genuine dispersal, everything will sell." It is, however, important to minimise transport time, says Mr Norbury. And for welfare requirements, quality of travel is paramount.

Dry cows, in-calf heifers and youngstock make the journey two days before the event, with the milkers following a day later.

They are milked at home and hopefully arrive at Crewe by lunchtime. They are then washed and allowed to settle before being milked again.

"Stock seems to settle very quickly when it arrives in the market. It is advantageous for the farmer – or his herdsman – to be present with them.

"Indeed, this rule applies generally to all dispersals. People like to put a face to a name and, more importantly, to have someone at the event who can answer questions about the animals." &#42

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AUCTIONEERS

14 June 1996

AUCTIONEERS

COMMENT

MARKET

Cardigan, Dyfed

AUCTIONEER

Malgwyn Evans

(JJ Morris)

FARMERS should not expect any fall in milk quota values as a result of the BSE crisis. In fact, says Malgwyn Evans, the opposite has been seen.

"After initial uncertainty and caution in the market, fears of over-production, resulting from the backlog of cull cows on-farm, have increased demand.

"Some farmers have leased in quota to cover their additional needs. And others that traditionally would have put some on the market have decided not to."

This had taken values for lease and sale quota to about 13p and 62p/litre, respectively, by the end of last week.

"Such factors have contributed to the shortage of supply now evident in the market. There has been less carry-over from the end of last milk year, when large volumes of used quota were traded.

"That is often a quiet time. But with it being worth 60p/litre then, a lot of people were cashing it in, rather than waiting to see where prices of clean quota would be when the milk year opened."

Similarly, trading has been busy in the early weeks of this milk year.

"Many lessors, who do not wish to speculate, leased their quota when prices reach 12p or 12.5p/litre.

"Now, as we approach mid-season, the speculators may hang onto their quota expecting the market to rise further."

Another important factor is the weather, says Mr Evans.

"A month ago, the talk was of a drought. Now, having seen rain and grass growth, this looks unlikely. We could be heading for a good milk-producing summer.

"Uncertainty over the BSE situation has also failed to deter people from buying quota. With leasing at 12 or 13p/litre, buying can certainly be justified."

Other factors contributing to the desire to purchase are:

&#8226 Buoyant milk prices and prosperity in dairy production.

&#8226 Cheap borrowing. (Last weeks cut took the base rate to 5.75%)

&#8226 Preferential finance deals available for purchase. (Although security may have to be provided, land values are currently strong.)

"Of course, there are many alternatives when it comes to making an investment. Land is always in demand when it comes onto the market.

"People should be considering investing in younger, better-quality stock, too.

"But the dairy cow trade remains in the doldrums at the moment – another casualty of the backlog of cull cows on farms.

"Farmers, meanwhile, should not wait until late in the year before sourcing their quota requirements. Like last year, the market will be volatile, according to the supply and demand balance."

And in this respect little has changed – not only since last year – but also since J J Morris conducted the countrys first-ever milk quota sale auction nine years ago, he says.

Quota then was making 28p/litre.

Farmers are

facing another volatile period in the quota

market, says Malgwyn Evans.

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AUCTIONEERS

12 April 1996

AUCTIONEERS

COMMENT

MARKET

Colchester, Essex

AUCTIONEER

Graham Ellis

(Stanfords)

MORE pork will be eaten on the Continent following the BSE publicity, which will leave less available for export. And that is good news for UK pig farmers, says Graham Ellis.

Pork will be less likely to flood into the UK when our high prices might otherwise encourage it, he says.

Like many auctioneers, Mr Ellis saw values shoot up immediately after the BSE scare. One Tuesday at Colchester saw a liveweight average of 152p/kg. "When I told people that, they thought I was quoting deadweight."

But this was a temporary effect. More central to his confident outlook is the shortage in supplies. Entries at Colchester, for example, are typically about one-third under those of twelve months ago.

"We keep hearing that finished pig numbers are expected to increase in the final quarter of the year. But the nearer we get to that time, the less likely it seems."

There is little likelihood of new producers being tempted into the industry. "The capital cost of establishing a unit is high. And getting planning permission can be very difficult."

Increasingly, it will be intensification that is seen, with ever-fewer, larger producers.

"Existing units already have the drainage and waste disposal infrastructure. And planning authorities are likely to look more favourably upon the expansion of an existing enterprise."

Large farmers may also be better positioned to combat rising feed costs. "Soya and grain prices have risen. And less feed barley is grown nowadays, anyway.

"It makes sense to negotiate fixed prices, so budgets can be drawn up with reasonable reliability as far into the future as possible."

The small producer, meanwhile, has to either try and compete with the larger one – or concentrate on niche markets. "Selling, for example, to the small, wholesale butcher who wants a few top-quality pigs and is prepared to pay a premium for them."

Meanwhile, Mr Ellis expects competition from America to increase. "Production there is being geared up very rapidly. How much they will eventually supply in the big unknown factor."

The sow trade is also causing him some concern. Price rises of cull sows have not kept pace with improvement in finished pig values.

"But they are still making between £160 and £250, so selling one still pays for a replacement gilt.

"The cull sow market is very much a European one. And we dont seem to be having things all our own way in Europe at the moment."n

Graham Ellis: Supplies are the key.

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AUCTIONEERS

29 March 1996

AUCTIONEERS

COMMENT

AUCTIONEER

Sue Forbes

Dreweatt Neate

(Newbury, Berks)

MILK quota leasing values will be about 12p/litre for the early part of the new milk year beginning on Apr 1, predicts Sue Forbes.

"Trading activity is, however, likely to be quiet, as farmers wait to see the final figures from the 1995/96 year."

Production, meanwhile, may be affected initially by the late spring. And farmers attempts to cut output in recent months may also have a knock-on effect, she says.

"Its not that easy to stop cows milking; but its even harder to get them going again."

The early stages of the year represent a good time for non-producers to lease out some of their quota, she says.

"If they release a chunk early, the money should be received by late May or June. As many remain involved in farming, this can then be used for investment or for paying rents. Others treat is as a pension fund."

Similarly, she urges those likely to need quota to plan well ahead and secure at least some of their requirements soon.

"Producers who source early have peace of mind. They can find, say, 50% of their estimated requirement and then get on with being dairy farmers.

"Later in the year – when they know what the silage cut has been like – they can then reconsider their needs.

"It is, of course, difficult to know exactly how much will be needed. Last year, for example, some farmers were doing their sums in December and deciding that they already had enough. But the cows continued milking so well that producers came back into the market, forcing up permanent transfer values."

In addition to the little-and-often approach to acquiring quota, Miss Forbes recommends using a mix of lease and purchase. "Where capital is available, there are advantages in buying.

"Farmers who traditionally have produced, say, 150,000 litres over quota, might in the past have leased in the excess. But leasing is no longer the predictable option it used to be. And every litre bought is an asset which can used again – possibly for many years to come.

"Of course, the farmer has to be able to justify the outlay to himself, to his cheque book and to his bank manager."

Funds for such purchases tend, however, to come from within the business rather than from outside sources, says Miss Forbes.

"This partly reflects the current agricultural prosperity; and partly the desire to minimise financial obligations.

"After vesting day there was a high incidence of farmers trying to find quota before finalising the finance.

"But increasingly, buyers sort out the funds first. Once the money is ready, they can then wait for the deal that suits them; rather than fix up the transaction, only to find that the lessor pulls out because the money is not immediately available."

On purchase prices, Miss Forbes says they are unlikely to fall below 55p/litre this year, with 60p/litre a more typical level. But the outcome of the present BSE debate will have a huge – and at this stage, unknown – affect on the quota market, she points out.n

Sue Forbes: Farmers should plan their quota strategy early – but the BSE crisis will complicate this.

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AUCTIONEERS

22 March 1996

AUCTIONEERS

COMMENT

MARKETS

Maidstone and Rye

AUCTIONEER

Alan Mummery

(Lambert & Foster)

POOR lambing rates and the continued drift out of sheep production could leave spring lambs in short supply this year, says Alan Mummery.

Reports from farmers as to their lamb crop are widely varying, he says. "Dry conditions last summer and autumn left the area like a desert at tupping time.

"Although some producers say this season has been as good as it has ever been, quite a few are seeing a lot of big singles."

The high incidence of flock dispersals last autumn is also contributing to a tightening of numbers. "Farmers are ever more conscious of their profitability – and sheep production can look very marginal on mixed farms compared to arable enterprises.

"Labour costs are increasingly high. And with sheep a numbers game, it may not be feasible to employ a shepherd unless the flock has more than 500 or 600 ewes.

"On mixed units, arable labour may integrate more easily with beef than with sheep."

With more singles possible this season, spring lambs could appear in markets sooner than in many years, believes Mr Mummery.

"But it is still too early, with only a handful sold through Rye last week. These typically made between 135p to 140p/kg. A big price improvement will probably be seen at Easter, however."

Progress of lambs will be delayed by the recent cold winds and the desperate shortage of grass, suggests Mr Mummery.

"The locality has seen a gradual drift away from very early lambing. The rewards for selling early – especially in the last couple of years – have not been wildly exciting.

"We dont encourage producers to bring lambs to market until we are getting a continuous supply. Once the butchers – especially the private ones – begin sourcing them, they want them every week. They dont want to flit back and forward between hoggets and lambs."

This spring has also seen fewer hoggets, which could accelerate the switch-over. And any dramatic lift in their price will further bring forward the change.

"Last year the hogget season went on and on. But much of this was export driven. Despite the strong home demand, the live export movement has been virtually non-existent in recent weeks.

"Most have had a slightly end-of-season look, however. But there have been few problems with over-finishing this year, even though producers with forage shortages may have fed cake.

"Similarly, there has been a shortage of kale and stubble turnips, following ground conditions last autumn which meant these crops were virtually planted in concrete."

Continuing demand for store lambs, however, suggests there is confidence that the hogget season will run for some weeks yet.

The 300 stores offered last Thursday at Maidstone, for example, sold to a top of £55, with the best single consignment of 106 head averaging nearly £50.

"When it comes to buying, it is this time of year that the gamblers come into the market," says Mr Mummery.n

Alan Mummery: Spring lambs could be in short supply.

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AUCTIONEERS

12 January 1996

AUCTIONEERS

COMMENT

MARKET

Banbury

AUCTIONEER

Jim Watson (Midland Marts)

LIVESTOCK farmers can feel cautiously optimistic about the coming year, says Jim Watson, managing director of Midland Marts.

The buoyant trade for most classes of stock, seen through the second half of 1995, looks set to continue, he predicts. But strong prices will be needed, given the high cost of young stock and feeding stuffs.

"Even beef prices have recovered quite substantially in recent weeks, after the bottom was knocked out of the market by the BSE issue."

The improvement partly reflects the strong export demand. "Buyers are seeking the best 650kg-plus bullocks of U and R classification and the best heifers of all weights." Prices in this sector range from 120p to 140p/kg.

Domestic buyers, meanwhile, will take most of the remainder, paying up to about 128p/kg.

Although the BSE issue will "rumble on", he is confident about beef producers prospects. But there is a great need to communicate with the customer.

"Some butcher shops did not suffer at the height of the controversy because, unlike the supermarkets, they can talk to – and put the facts to – the consumer.

"And buyers will recognise a bargain. If a meat is competitively priced, it will sell. Beef had got a little too expensive last autumn.

"If overall market averages are in the 115p to 120p/kg range, most people can live with that."

Another problem which "threw fuel on the fire" was the SBO handling-levy dispute.

And it was an issue in which Mr Watson, then president of the Livestock Auctioneers Association, was heavily involved.

"The conflict made me realise how interdependent farmers, auctioneers and the meat trade are on each other. But trying to strike a satisfactory balance was impossible, even among the auctioneers.

"Some firms had a large number of small buyers and wanted to resist any compromise. Others had just a few abattoir customers, all of whom were boycotting the market. And at the extreme, there were small firms who, had the dispute continued, could have gone out of business.

"We can live with the compromise solution which involves making a deduction of 0.5p/kg from clean cattle and £3.50/head from cull cows," he says.

But nonetheless, the dispute was a fraught time for Mr Watson. Ultimately, it led to his resignation two-thirds of the way through his three-year term as LAA president.

"Some auctioneers were pleased when the compromise was agreed. They had been losing a lot of money and, with the dispute heading into its fourth week, were pleased to get back to normal work. Others were less happy and wanted to stand firm.

"I wasnt prepared to carry on in the face of criticism which I felt was unjustified. It proved impossible to please everyone. It was a hard decision to stand down. But I hope that I did some good work and helped raise the profile of the association." &#42

Jim Watson struggled to "strike a satisfactory balance" over the SBO dispute.

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AUCTIONEERS

5 January 1996

AUCTIONEERS

COMMENT

MARKET

York

Auctioneer

Nigel Stephenson

(Stephenson & Son)

THE trend towards producing heavier pigs will continue in 1996, says Nigel Stephenson.

He has seen a big change over the past two years, with an increase in the number of baconers marketed.

"When £40 or £45 has been paid for the animal as a store, it can be difficult to make a satisfactory margin if it is sold, say, just four or five weeks later. Instead, more farmers are keeping them until 95kg or 100kg."

The run-up to Christmas, however, saw an increase in numbers of lighter-weight pigs. At this time, the ratio of baconers to cutters and porkers was about 50:50 at York. Normally, however, the ratio is at least 60:40 in favour of the heavier pigs.

But demand was firm across the board at this time, points out Mr Stephenson. Adverse BSE publicity only had a minimal affect on boosting pork demand, he says. But trade had been firming week after week in the usual seasonal manner.

And he is confident that it will remain so throughout 1996. The usual seasonal troughs in demand, and prices, may be less marked in 1996, he says.

Although prices traditionally drop after Christmas, for example, numbers are sufficiently well down across the country, to maintain values early in the New Year.

Similarly, the summer tail-off in values associated with hot weather may be less acute than in past years.

Perhaps the only cloud on the horizon, says Mr Stephenson, is further increases in feed costs, which will reduce margins.

But with 1996 set to bring good returns, the year represents an ideal time for pig producers to make investments. "Buildings and feeding systems should be inspected and any necessary improvements made."

And those who have not already planned for the stall and tether legislation – due to take effect in 1999 – should do so now, he says.

"Pig farmers have traditionally been good builders," he says. But they have had to become so efficient that there is often limited scope for making further improvements.

Similarly, there is only a limited amount the pig producer can now do to make his product itself more saleable. "The conformation of the majority of the stock we now see is excellent." &#42

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AUCTIONEERS

20 October 1995

AUCTIONEERS

COMMENT

MARKET

Rugby

AUCTIONEER

Simon Draper

(Rugby Livestock Sales)

OTHER markets should follow the recent example set by Rugby and only allow dipped sheep to be entered for their main sales, says Simon Draper.

"As auctioneers we thought it was important to send a strong signal to all sections of the industry that we recognised, and were deeply concerned about, the problem of scab.

"In a lowland area like this, especially where the animals entered for sale tend to come from local farms, scab is a small problem. But the insistence that each of the 2500-strong entry had to be dipped in the two weeks before last months annual fair also gave the buyers confidence," says Mr Draper.

The big buyers – those who source sheep from around the country – tend to dip stock as soon as they get it home, he points out.

But a lot of people who buy here are replacing just a few sheep, he says. And with about two-thirds of the buyers at Rugbys sale taking under 40 theaves, such producers may not have the facilities or the licence to dip.

"And if they had already had the rest of their flock dipped by a contractor it was unlikely they would go through the process again for a few additional sheep.

"It saved the buyers time and money and it also meant the sheep were ready to be tupped straight away. Had they not already been dipped, it might have meant a two-week delay before the ram could be used."

It also resulted in the sheep being presented better, suggests Mr Draper. "Sheep freshen up tremendously after being dipped, especially in a dry, dusty year like this."

At first, the ruling caused a little concern among some vendors, says Mr Draper. "But over 70% of them would probably have been dipped anyway. And the rule only applied to our largest sale of the year, so vendors could choose to sell on another day if they so wished.

"In fact there was no constructive reason for not taking the decision," says Mr Draper.

"It would have been difficult to enforce. But by saying that the sheep had to be dipped rather than injected or sprayed meant we could see from the colour and tightness of the coat whether it had been done. And, thankfully, we didnt have to turn away a single animal.

"It is difficult to tell whether it had any influence on prices, as there were no non-dipped sheep with which to make a comparison." (The fair saw theaves average just over £70, up £7 on last year.)

"We recognise there are health concerns among some people about OP dips but we plan to make the same ruling at next years sale. And I hope other markets follow, too." Only then can scab be combated, says Mr Draper.

Simon Draper allowed only dipped sheep at this years annual fair.

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AUCTIONEERS

21 July 1995

AUCTIONEERS

COMMENT

MARKET

Melton Mowbray

AUCTIONEER

David Willars

(Melton Mowbray Market)

BREEDING sheep are likely to make similar prices this season to last, according to David Willars.

East Anglias first big breeding ewe sale today (July 21) at Bury St Edmunds should provide a benchmark for the trade, he says.

"Once again, I think there will be a big gap in prices between the very best and the lower-quality stock."

Last year at Melton most first-quality Mule theaves were making between £74 and £78, with the best reaching £80.

"Such top-notch stock is well worth paying for," says Mr Willars. "It is difficult to produce a uniform crop of good quality lambs if the female side of your flock is not also of a uniformly high quality."

The large spread in finished lamb prices is evidence of the variability between and within some breeding flocks, he says.

"Paying £70 or £80 for an excellent theave sounds a better proposition, when one remembers that it can, perhaps, be kept for five years and then sold for £40 as a cull ewe."

In the past, farmers tended to "move through the flock more quickly", says Mr Willars. "A ewe might be sold after, perhaps, just two lambings, because the perception was its value would fall quickly as it got older.

"But more recently, with the firm cull ewe values, people have held on to them longer."

This, says Mr Willars, is partly why double-theaves are frequently making within £3 or £4 of theaves last year. He points to three other reasons that may also be contributing to the firm prices of slightly older sheep:

&#8226 Easy lambing.

&#8226 Simple shepherding and management.

&#8226 Lambs may "come forward" quicker than those from theaves – possibly because milk is more plentiful.

Ewe condition, as always, will be a crucial determinant of prices. "With this seasons dry weather, I certainly wouldnt expect to see too many over-fat ewes," he adds.

Confidence is also a factor in the breeding sheep trade. "Confidence in the finished lamb trade – and also in the more general sense," he says. "Prospects for the harvest, and farm finances overall have a large influence."

This years ram trade will also be a two-tier market dependant upon quality, predicts Mr Willars.

"Suffolks are by far the most popular terminal sire in this area," he says. This is borne out by the fact that of the 140,000 fat lambs through the market last year, over two-thirds were by Suffolk rams.

"The quality control of the Suffolks has improved in recent years. But whether the trend towards them continues will depend partly upon whether the quality of Continental lambs improves.

"Ram prices will probably be similar, or slightly above, last seasons, when best Suffolk shearlings were making about £400 at the NSA sale."

"Price differential between theaves and double-theaves has narrowed."

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AUCTIONEERS

7 July 1995

AUCTIONEERS

COMMENT

MARKET

Chelmsford

AUCTIONEER

Tom Whirledge

(Whirledge and Nott)

LACK of rain is affecting the number and type of stock sold at Chelmsford, says Tom Whirledge.

With little rain since mid-April, the drought situation in parts of the eastern counties is serious, he says. "Although a lot of cattle in this area are housed, there is insufficient grass for those outside to finish.

"This area is not renowned for the quality of grazing – especially in a year like this.

"As more of these cattle do come forward, it is unlikely that their quality will improve," he says. And currently, a two-tier market is evident, with cattle being "either very good or very plain".

This dichotomy has resulted, says Mr Whirledge, as farmers who fatten stock intensively seek only the best beasts in order to achieve high feed conversion rates.

And such top-notch animals are consistently meeting a firm trade, commanding a premium of 10-15p/kg. "But there are feeders who, aided by BSP payments, choose specifically to graze common beasts, in pursuit of higher profit margins," he says.

The current drought is also likely to lead to a number of either "part-meated bullocks or second-quality stores" appearing in the autumn, adds Mr Whirledge.

Of the store trade so far this year, he uses the word "cautious". But this, he says, is "good news". "It is difficult to get a satisfactory return for your feeders on their fat cattle if they have paid very high prices for them as stores."

But there are exceptions. In contrast to the typically level store heifer prices, he points out that a pen of exceptional Blondes recently made well over the 140p/kg mark.

Another implication of the dry weather, says Mr Whirledge, is that dairy farmers may find themselves with insufficient forage supplies.

But more immediately apparent, he says, is the effect it has had on lamb supplies. "As values have fallen, lambs have been held back in other areas to try and catch a better trade. But with the shortage of forage, that has been impossible here."

In fact, three weeks ago, over 500 lambs were sold at Chelmsford, the highest one-day total ever. "Prices averaged 100p/kg then," says Mr Whirledge, and have been falling since. "I cant see them improving now."

Lamb production may be limited in this area, he says, but it is increasing. He also points to the potential danger in holding stock back, of producing over-fat animals. Being on the urban fringe, this is something of which Mr Whirledge is particularly conscious.

"As one goes further into provincial areas, consumers recognise a little more the value of some fat cover in cooking meat. But here, there is an extreme aversion to it.

"Being located where we are, such considerations are a fact of life. And the site does, after all, have the advantage of excellent communications, allowing us to draw stock from well outside the county."

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AUCTIONEERS

9 June 1995

AUCTIONEERS

COMMENT

MARKET

Ashford

AUCTIONEER

Elwyn Davies

(Hobbs Parker)

LAMB producers must concentrate on the timing of their marketing if decent returns are to be maintained through the summer, says Elwyn Davies.

"Early in the season, there are always a few fat animals offered as producers select for their first draw. But now, farmers must ensure that a well-shaped, lean lamb is offered, which is wanted by the majority of buyers."

And he points to an "ideal" lamb being:

&#8226 16kg to 19kg carcass weight.

&#8226 2L or 3L fat cover.

&#8226 U or R grade confirmation.

"Selections, therefore, must be made on a regular basis. Only then will the farmer be able to supply what the buyers want."

Prices through the summer, says Mr Davies, will depend largely on the strength of export demand and numbers available.

"With 40% of production exported – either live or in carcass form – this market is crucial."

The demand for early new season lamb was "disappointing", says Mr Davies, with producers taking between £5 and £15 a head less than a year earlier.

"A combination of increased quantities of chilled New Zealand product and a lack of any real demand on the Continent contributed to the reduced returns.

"An increase in the availability of relatively cheap pork and poultry throughout Europe has also put pressure on the price of lamb."

The increase in lamb allowed in from New Zealand (there being no restriction on chilled quantities from July this year) will further add to the competition and put downward pressure on the price of the home-produced item.

"In recent weeks, the new season price has been volatile with a substantial fall often being followed by a sharp rise as producers hold lambs off the market," says Mr Davies.

"A stabilising in values over the coming weeks as more consistent numbers are marketed will be welcome," he adds.

Store sales, meanwhile, begin at Ashford on July 21. More than 5000 head may be forward. "From mid-August, we will see between 2000 and 8000 at our weekly sales, probably peaking in late October.

"Although difficult to predict, store lamb values can be expected to start at similar levels to last year, when best animals were making in excess of £30.

"But the finished trade and the keep available at the time will be the all-important factors."

Elwyn Davies: timing is crucial.

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AUCTIONEERS

12 May 1995

AUCTIONEERS

COMMENT

MARKET

Northampton

AUCTIONEER

Roy Knight

(Northampton Livestock Sales)

FINISHING store cattle successfully hinges on buying animals of the right quality, says Roy Knight.

"Once you have turned stock out you cant do anything but rely on getting a good season," he says. "But second-quality cattle are always second-quality cattle. And if you have bought badly bred animals it is more difficult to get a good finished article, whatever the grazing is like.

"If you are hoping to sell to a supermarket, for example, you need to remember their requirements when sourcing the stores."

Favourable weather and good grazing should now see stores remain firm throughout the season, suggests Mr Knight. "Last year, with the drought, a lot of people might have lost money had it not been for the CID payments."

Indeed, card colour is crucial in determining prices, he says. "People are buying pieces of paper. And if these payments were not available values would fall accordingly."

Recent sales at Northampton have seen steers average £592 and heifers £463. The best animals have been consistently making £30 more than last year.

Mr Knight partly attributes the current firm trade to a general feeling that there are less cattle about this year. "We have seen higher numbers here, but there seems to be less, for example, in Wales and the north of England.

"Plus demand is being fuelled by farmers looking to reinvest IACS money. They may have already re-equipped their farm and now want to invest some more of the money elsewhere."

This, he suggests, has contributed to the earlier buying this year. "We saw quite a few big, strong animals early on," he says. "There will always be a few early buyers, however. If someone sees a nice bunch of cattle in, say, February, buying them then offers the advantage of being able to offer the finished stock back into the market earlier."

And Mr Knight has also seen a recent preference for younger stores. "Yearlings have got dearer and dearer over the past month or so," he says. "The better ones, on blue or green CIDs, are selling between £500 and £600.

"Buyers have to budget on spending, say, another £100 on grazing, so they may look upon the card payment as covering that cost. And anything on top of that is excess. But the margin can still be quite tight, especially if the animals cant be sold finished off grass as soon as the summer ends."

Roy Knight – card colour crucial.

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