Carlisle Discussion Group questions value of auction marts
The future of trading prime lambs by live auction has been called into question by a group of farmers based in the north of England and Scotland.
In a letter to auctioneers the farmers, calling themselves the Carlisle Discussion Group, have called for markets to become collection centres and cease trading prime lambs by auction.
The call follows a disastrous autumn and early winter of lamb marketing, which regularly saw increasing numbers of farmers lose confidence in the live markets.
But auctioneers say the rapid escalation of prices over the Christmas and New Year period through live markets justifies the stance that markets offered the most competitive option for marketing lambs.
Speaking on behalf of the group, Farmers Weekly Farmer Focus writer Alistair Mackintosh said there was a desperate need for farmers to gain more control of livestock marketing and many were now looking for forward contracts to allow them to prepare budgets and cashflow forecasts to secure their businesses into the future.
“There are abattoirs which supply major retailers looking to source large numbers of lambs from the north of England, but unwilling to do so through auctions.
“Equally, there are farmers willing to supply them, but without the volume of supply to secure a contract.
“Markets are ideally placed to negotiate between these two groups as they have done in the past, but on a different basis.”
In response Chris Dodds, executive secretary of the Livestock Auctioneers Association, said that after discussions with retailers and abattoirs, he believes many were happy to source from existing live markets provided the stock were of the right quality, were farm-assured and full traceability was available.
Producers group’s tactics are unhelpful, say auctioneers
While the Livestock Auctioneers’ Association hasn’t yet issued a formal response to the group’s suggestions, Chris Dodds feels the tactics employed by the group have been unhelpful.
“As an organisation we always welcome the opportunity to discuss business practice and how current practice can be improved upon to benefit all concerned, farmers, auctioneers and buyers. However, there are more helpful ways of initiating a discussion than this.
“There is no doubt that when you look at headline figures deadweight prices would appear to have been higher than liveweight returns in the second half of last year. However, it must be remembered that abattoirs quote a price for a standard-grade lamb and discount for lambs not meeting specification. Markets, on the other hand, report prices actually achieved for all lambs traded on the day.
“Moreover, a large number of markets already offer their clients a deadweight trading option, and the number of lambs traded this way varies dramatically from year to year depending on which system is seen as offering the best price at the time.
“I don’t believe there is a direct selling option which can resolve the issues this group believes are responsible for low lamb prices.”
The LAA is likely to have further discussions before considering its final response to the letter.
The members
Malcolm Corbett Dykehead, Rochester J Fenwick Jackson Kersheugh, Jedburgh John Hall Inglewood Edge, Dalston Archie MacGregor Allanfauld, Kilsyth Alistair Mackintosh Muncaster, Ravenglass Hans Porksen Gallowshill, Morpeth Malcolm Stewart Brotherstone, Melrose.
Who are the Carlisle Discussion Group, and what do they want?
Their proposal:
The group is particularly worried about the poor prices received for prime lambs and would like to see markets act as collection centres, says member Malcolm Corbett.
Detailing their proposal, he says for the system to work all stock should be pre-entered by farmers, giving clear details of numbers, breed, weight and level of finish. In return for this, farmers should know the price/kg when the lambs are entered.
“Furthermore, on arrival at the collection centre, auctioneers’ staff should make a final selection, including rejecting lambs failing to meet the required standard. Lambs would then be weighed and farmers paid on a liveweight or deadweight basis.
“We believe this system would give farmers the chance to influence prices and allow markets the chance to supply the ever-increasing number of customers not willing to source them from auctions. And as farmers, we would have no problem in setting the price we receive for lambs.
“As farmers, we have to take more responsibility for the stock we produce and that means ensuring they are meeting buyers’ requirements and that we receive a fair price for them,” he added.