(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.