AUCTIONEERS

17 September 1999




AUCTIONEERS

COMMENT

MARKET

Ripon Farmers

Livestock Mart

AUCTIONEER

Norman Bagley

(Company name)

LAST year David Sawday of Tesco came clean about the anti-auction stance being taken by his company. Much was written at the time – some by myself about the dangerous implications of this arrogant rhetoric. Later that year the Livestock Marketing Alliance was formed to defend the principle of open and competitive price fixing.

The members of the Alliance recognised that farmers should keep open all forms of marketing options and not narrow any one of them down to a point where they ceased to have any influence on the end price. Thats been demonstrated by the misguided loyalty of pig farmers to marketing groups who were themselves dependant on giants such as Malton Bacon Factory but with zero influence.

We have heard much from NFU President Ben Gill of the need for such "collaboration and co-operation" in marketing. I have no objection to that where it enhances competition and in Bens other buzz-words "adds value". However, I would offer a better description on behalf of the poor pig producers who went down this disastrous road; clap trap and capitulation.

Now we have the next all-conquering example of collaboration and co-operation – the new All Wales Co-op. At a time when retailers are fighting to sell the cheapest possible food, has the Co-op found a new way to make them pay more? Pass the sick bag Alice.

Producers have been brainwashed into thinking that partnerships are the only way forward and that any middle-man must be cut out – good or bad. Take the much maligned livestock agent as an example. Abattoirs, bidding farmers lower dead-weight prices at the start of the week, have used agents stock to top up later. But that may now not be so easy as the agents themselves are disillusioned with poor specification and weight returns.

The Alliance has been extremely pleased with the co-operation of the Intervention Board in the area of dressing specification and weighing. The increased level of inspection at the seventeen large price reporting abattoirs in England and the illegality of the use of company spec at these larger plants is a major step forward in the beef sector.

Pig farmers will also benefit from these increased inspections although sheep farmers should remember that the IB has no regulatory role in that sector. Is this why throughput in the live auctions in sheep has held up so well? The Alliance now has quarterly meetings with the IB to monitor the inspection results, which will go a long way to lifting the fog in price comparison.

The bedrock of support for auctions has always been the small and medium sized abattoir sector who recognise the flexibility and benefits of choice that a well run auction can provide. The auction system is open and transparent and whilst not for everyone, it still provides the vital barrier between farmers and the buyers. Indeed, I would call it the best possible example of the collaboration and co-operation to which the NFU and others so fervently espouse.

So have the auctions turned the corner?

In cattle, there is evidence that even in the hot bed of producer group country, some auctions are staging a real comeback. Power-freak control and inconsistent returns by these groups are reasons given.

In pigs, there is a noticeable return to some auctions. Marketing-groups lack of influence has destroyed confidence. Pigs have been worth more on their feet.

In sheep, auctions are performing above expectations in throughput terms. Lambs bought for supermarkets and then processed as a direct dead-weight purchase in the agents name is a practice which is fooling nobody.

Time will tell, but some farmers have undoubtedly come to the view that all the false promises of new and revolutionary ways of securing ever better returns from partnerships may be an illusion. The auction system, imperfect though it is, may yet prove to the best of all options.


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