Wondering whether stock could have been sold for a better price elsewhere inevitably follows market day or the sight of the wagon leaving through the farm gate.
Each farm has its own system, seasons, geographic location, scale, genetics, and reputation, which mean liveweight is a no brainer, or conversely, deadweight is the obvious option.
Farmers Weekly spoke to farmers, the deadweight industry, the Livestock Auctioneers Association, the AHDB, the NFU, and pig consultant and valuer Peter Crichton to get their thoughts on the merits of each system.
Deadweight marketing has completely dominated the pig sector for decades and is the dominant route to market for prime and cull cattle.
However, prime lambs remain a key part of livestock markets’ weekly incomes and some believe this is a major factor in the UK lamb price being set high.
- Competitive bidding This helps set the price and support trade and is championed as getting a “fair price” for stock. A liveweight lift in lamb prices is typically followed by deadweight increases the following week.
- Commission-based High livestock prices are in auctioneers’ interest, providing buyers aren’t put off.
- Barometer for trade Sales and market reports are publicly accessible, allowing businesses to see what prices are being achieved and can help inform marketing strategies.
- Buy what you see There are no fears about animals being graded unfairly.
- Embracing change Some markets open early and have collection services as well as online viewing and bidding, saving time for farmers, while maintaining competitive bidding.
- New schemes The Drover training scheme (2017) and MartSafe (November 2021) are working to improve safety and animal welfare.
- Social side Markets are important social hubs and allow a break from work.
- Broad specification There are often buyers for more varied types of stock.
- Topping up orders Deadweight teams often source lambs and some cattle and cull cows from markets anyway, so they depend on the live ring, too.
- Market variability The vendor has no idea what the price will be for the stock when they are loaded on the wagon.
- Egos run high Competition between markets means market reports can be selective, focusing on top prices. Some markets have been openly accused of adjusting weigh scales and liveweights to make the price/kg look better. However, this can help deadweight lamb vendors by keeping the SQQ up.
- Health and biosecurity Pig farm assurance schemes do not allow farms to use live markets because of the biosecurity risk. This philosophy is increasingly found in the cattle sector, with milk buyers setting rules on cull cow marketing.
- Does your face fit? Personality and reputation can affect success and how much of a priority you are for auctioneers.
- Bad debt Markets compete against each other, opening them up to the risk of unreliable buyers, extended credit terms and bad debt. Many markets still pay vendors on the day, but further down the supply chain companies work on being paid monthly or quarterly.
- Part-time auctioneers Balancing supply can be difficult at some markets where auctioneers are rural surveyors and valuers and only auctioneers one day a week, meaning they can’t fully focus on the market supply and demand.
- Carcass and health data It is often easier for farmers to get back information on individual animals sold deadweight (more so for cattle). For example, carcass classification scores and weight and health conditions can highlight where improvements can be made.
- Supply chain communication A more direct link can be developed through this data. This has been seen in more integrated poultry and pig systems, where supermarkets and processors can give signals on genetics, nutrition, and management techniques to create a more consistent product.
- Welfare Direct sale to the abattoir can minimise stress, which is particularly important for young bulls. This reduces the incidence of quality defects, such as dark-cutting beef.
- Time factor Hauliers collect stock from the farm, saving time.
- Negotiated price The price is known when the cattle are loaded or dropped off at collection centres. This allows some deadweight vendors to guess the kill-out percentage and calculate roughly what the stock will be worth on the day they leave the farm.
- Grading errors Many say there is too much human error and variability in carcass grading, which can be used to create a larger margin for processors.
- Limited investment Some efforts to automate carcass grading have been stymied partly by facilities being smaller and more crowded, meaning objects within close range of the camera and different lighting lead to grading errors. Others say slim profit margins mean it’s difficult to justify investment in such expensive equipment. Video imaging analysis (VIA) works better in modern beef processing units with slower line speeds.
- Supermarket power Moving away from live markets mean supermarkets inevitably begin to gain more control over prices.
- Era of cheap food Supermarkets have little interest in livestock prices being high, although some abattoirs are paid to source cattle on commission (namely 2% of value).
- Limited market information Price reporting is very limited and anonymous as it’s commercially sensitive. There is no information about what supermarket prices are given to processors, and some processors are private businesses, so their accounts are not publicly available, which leads to mistrust.
- Big price Larger-scale farmers can get higher base prices because of the guaranteed numbers they can offer, which gives bigger business the upper hand and allows farming businesses to become integrated into supply chains, further removing competition for stock.
- Contracts Some processors require vendors to enter into contracts that favour the processor as the volume is concentrated with them. For example, this year, pig farmers were penalised for overweight pigs despite the issue being caused by shortages in staff to process pigs that the farms were contracted to produce.
- Volume Low-volume sellers in some locations may be unable to sell deadweight as processors cannot source from that area.
Farmers Weekly says
Both routes to market have strengths and weaknesses, but without liveweight selling, many fear supermarket chains could pressurise livestock values.
In Ireland, deadweight processors dominate, and cattle are sold directly to abattoirs or through agents.
This winter, Irish beef base prices have been 50-60p/kg below British values, a difference that could be worth £200 a carcass.
However, deadweight does have the benefit of feeding data into carcass trait estimated breeding values for cattle, an area that should develop through the Livestock Information Programme. Liveweight marketing could also take part in this scheme.
This year has been a great year for live markets, but health, welfare and biosecurity stipulations by buyers and assurance schemes, could limit selling liveweight for some farmers.
Through Covid-19, markets have shown they can adjust and modernise to stay relevant.