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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