Marts fear high cost of re-opening

11 January 2002

Marts fear high cost of re-opening

By Simon Wragg

DEFRA officials met with auctioneers this week to finalise negotiations on rules that will govern the return of livestock auctions from next month, but there is no guarantee individual auctions will re-open.

Auctioneers, who can expect a formal announcement of the rules by DEFRA in the next few days, warn they now need time to study the implications of opening marts under the new arrangements. Cost is the major concern.

Although separate delegations from both the Livestock Auctioneers Association and its Welsh equivalent made last-minute representations at DEFRAs headquarters in Smith Square, London, earlier this week, some marts have already voiced grave concerns that primestock sales may not resume.

Northampton Auctions needs to raise between £1.5m and £2.5m to secure its future after a handful of existing shareholders – with an estimated stake of about 50% – mooted an intention to pull out, says the companys Keith Rose.

William Fraziers pig auction at Aylsham, Norfolk, regularly traded 500 animals/week before foot-and-mouth, but it now faces permanent closure because reinvestment costs to bring the 80-year-old site up to DEFRA standards would be high.

"My future is in the hands of officials," says Mr Frazier. "In no way can money be invested into the market if it isnt going to generate a sufficient return."

Many auction companies expect operating costs will rise because of stricter biosecurity measures and additional staffing costs.

"It will hit vendors and buyers," warns Richard Wood of Hobbs Parkers market at Ashford, Kent. "But producers want auctions back. Theyve had their trousers taken down over the last year and want the competition of the auction ring to set prices."

In Cumbria, David Pritchard of Harrison & Hetherington says the company aims to have Borderway Market up and running immediately. "As soon as we can see the rules well be doing everything to get the auction open."

However, operating costs will have to be met, he warns. "We have no intention at the present time to increase the burden on vendors but we expect to review charges annually. A business can only operate if it is viable."

Although producers are eager to see auctions re-open, many farms will have to adapt to new rules, including the 20-day standstill. But Fred Henley, of Green Farm, Seaton Ross, near York, is confident all obstacles can be overcome. "Pig producers have lived with a 21-day standstill for some time where new stock is brought in from an unofficial source and others can only be sent direct to slaughter during that time, but its workable.

"I cant see why sheep and beef producers cant operate within a 20-day standstill. If thats what it takes to get auctions back open then so be it."

CONCERN that meat wholesalers are preparing to boycott live auctions has been played down by abattoir representatives who suggest auctions still have an integral role in the supply chain.

Auctioneers have expressed doubts about the return of some buyers to ringsides after a year-long switch to direct supplies. The move could suppress demand and influence prices paid for stock when auctions resume in late February, suggests the trade.

According to Gwyn Williams of Frank R Marshalls Chelford Market, the decision over the re-opening of primestock rings will depend on support from buyers. "It is a major concern. We must have support from both sides of the industry to make auctions viable. If it isnt forthcoming then serious questions have to be asked."

Sales of finished stock could jeopardise other, more lucrative, non-agricultural markets at Chelford, unless there is sufficient demand.

"Horticultural and machinery sales at the site now account for 80% of income over the last year. That cannot be put at risk. We will be speaking to the divisional vet to look at rules governing re-opening of markets to see if we can accommodate all activities."

Derby-based auctioneer Charles Hollis believes change is inevitable. "I dont see that markets will ever be the same again. Independent butchers have drifted away from the market in the past; many no longer have to time to stand at the ring when its more profitable to be selling in the shop.

"Likewise wholesalers. Those that need a good supply of cattle and can get them direct will go that way. Weve been doing that for many customers during the crisis and it will continue."

The British Meat Federation, which represents 85% of red meat abattoirs, believes the impact will be split along regional boundaries. "Foot-and-mouth has hardened views," says BMF director Peter Scott.

"In the south, there is an entrenched view that direct supply gives (abattoirs) a better handle on the stock coming in to a plant. Producers get used to pricing which may not hit the highs but gives consistency to returns.

"But we recognise that markets have an important function, particularly for procuring lambs."

Meat giant Anglo Beef Producers has also stated its support for markets, although it underlines the companys intention to procure as much stock as possible direct from farm.

Midland Meat Packers Nigel Bond suggests its buyers will also be active as demand dictates. "We will procure stock out of the auction that meets our farm assurance and traceability requirements."

The position of St Merryn Meats remains unclear. "It would be inappropriate to comment given that its still an evolving environment," says the companys John Dracup. &#42

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