The way we sell livestock
is changing but not at the
pace of the food sector.
Simon Wragg reports
ITS a stockmans ambition come true; to lift the championship title aloft at the Royal Smithfield Show to a chorus of applause knowing that butchers will bid eagerly to have the carcass displayed in their premises.
But all that could change. It is not that the Smithfield Show is going to end, but the way in which we market meat has already changed forever.
Against the banter and enterprise of competition in local town markets the trend for selling direct to abattoirs increases. Today, over 95% of pigs, 45% of cattle and almost 40% of lambs are sold direct to a slaughter house. And more change is expected.
It is inevitable. The swing to direct supply – however unpalatable to some – is just about keeping pace with developments in retailing, consumption and purchase of meat.
But will this not lead to a total meltdown of the auction system? While some finished stock can go deadweight, the resilience of the small, local butcher trade in rural and some urban areas will continue to see fatstock in live auctions.
Just as our desire for different food is changing, so is the industry that supplies it. For households still enjoying a traditional cooked meal the changes can be hard to comprehend. But they have been stark. Today it takes just 30 minutes to prepare the average weekday family meal; by 2008, say researchers at McCann Eriksson, it will be down to just 11 minutes. The advent of the quick, convenient meal is here, and here to stay.
The latest government survey on food eating habits also confirms our habits are definitely on the move. The new national pastime is eating out and the catering market is growing rapidly to satisfy this new appetite.
As foodies we are also consuming more processed meals – one of the supermarkets biggest growth areas along with organic food. But this has one major disadvantage for the farmer; a prepared meal contains less meat than the same dish made from basic ingredients in the home, according to food technologists.
As a result, the amount each household spends on unprepared cuts of meat is falling in relation to other foodstuffs. And that is despite a slight increase in consumption of some meats, particularly poultry.
New figures released this month from the Office for National Statistics show the average household spends £2 a week on poultry, £1.60 on pigmeat, £1.40 on beef and just 60p on lamb (We now spend more on fresh fruit than any one meat).
But change is not confined to eating habits. Farming has had to adapt and it is the livestock mart where the most visible development is taking place. Fewer fatstock are being sold through the ring in favour of direct to an abattoir. Some markets have closed while others moved auction days to maintain business. But that is the tip of the iceberg, say auctioneers.
"We will see equally as much change in the near future with smaller markets closing and the need for bigger, central markets growing," says Brian Pack, chief executive of Aberdeen & Northern Marts.
Over the last decade the ANM group has closed 10 markets and now concentrates trade through three purpose-built sites. "Some of this change was brought about by a fall in livestock values and that will continue to have an impact in many marts in future," he warns.
But it is not all gloom. Mr Pack is adamant that livestock markets have a future. For many it is the only effective way to channel stock from breeders to finishers in rural areas. However, some changes must happen. The continual passing of stock from rearer to fattener to finisher must end if farming is to stay profitable.
"The industry may shake down to just one move from a rearer to a finisher in future, just like in America. But I dont see breeder/finishers as being the future. It doesnt pay to finish some stock on certain farms."
As well as still being important for store animals – those requiring further feeding before slaughter – the livestock ring with its many buyers, including local butchers, wholesalers and dealers, allows meat buyers to pick animals which suit their need from the myriad of stock coming off farms. It has often been said, but these inevitably differ in size and shape.
The most important reason for maintaining the local mart is its role in ensuring fair competition to set the value of stock; an argument supported strongly by almost all farmer-representative groups.
Mr Pack is in full agreement: "The auction system also provides the basis for price fixing in all other forms of livestock marketing…its important at least 15-20% of prime cattle continue to be sold by live auction to do that in future."
Abattoirs also support the need to maintain auction numbers, albeit to a lesser extent. Many use it to top up weekly kills to accurately meet the demand of their processing and retailing customers. There are supporters. Tim Bastable of Midland Meat Packers, which processes about 2500 cattle a week for major retailers, described the auction mart in this respect as a "useful" management tool.
Direct to plants
Over the next five years, industry estimates suggest that while the proportion of pigs being sold direct to meat plants is unlikely to change, both beef and sheep numbers will increase gradually to between 50%-70%, suggest auctioneers.
But it wont necessarily mark the end of auction markets. If retailers force through a decision to abandon markets altogether they could face being labelled as being instrumental in ruining farming communities and rural trade. "They dare not risk a backlash from consumers," warns one industry insider.
Perhaps the most radical development is Sainsburys intention to look beyond the shop floor to the advent of home shopping. The company expects 5-10% of households within the M25 urban area to shop from the sofa regularly within 5-10 years and is developing regional picking centres, according its chief executive Dino Adriano.
That, along with general scaling down in the number of suppliers, will see greater rationalisation in distribution of goods. So how does this affect the future for markets?
Simply put, the meat trade needs to streamline its supply routes to stay competitive. Meat processors and wholesalers may look to markets to supply a larger number of supermarket-type stock on any auction day, or to act as collection centres, to simplify the supply of stock from farm to factory, argues Mr Pack.
It is clear that change is unstoppable, as is our desire for different and novel food products. Just as farms have to rationalise, so will markets if they are to survive. Their prize, just like that of a championship stockman in a Smithfield ring, is to be the best provider of livestock to their meat-buying customers.