Selling primestock – is auction or abattoir best?
As the livestock sector finds itself in times of radical change on so many fronts, is the vexed issue of whether the best way to sell stock is under the hammer or on the hook any nearer being resolved?
While the industry has had no option but to adapt to having fewer auction marts to sell its stock, it isn’t all bad news for the live seller.
There’s been improvement in this sector with the building of bigger and highly efficient new marts, now established in several regions.
And the trend is continuing with the opening next year of the new £50m auction mart at Middlewich in Cheshire and the creation of the new company Wright-Marshall.
But having less time to devote to selling stock is still cited by many livestock farmers as being responsible for making deadweight marketing an attractive option – as well as preferring to have a previously agreed contracted price underpinned by the more structured approach of selling on the hook.
But surprisingly, there has been little change in the number of cattle being traded either live or dead in recent years.
In 2004, 77.2% of all slaughter cattle were sold deadweight and last year the figure was 77.8%. Ten years ago 52% of all sheep were sold liveweight and last year that increased to 58%.
So what is it that makes individual producers choose “the hammer or the hook”?
Liveweight selling
Lancashire sheep producer David Hargreaves of Westby, near Blackpool, sums up why he believes that selling liveweight is the fairest for the farmer:
“The deadweight system bases its prices on the live market, so selling live must be the system that reflects the true value of the stock.
“Selling stock through the market gives the producer exactly what those animals are worth,” says Mr Hargreaves.
“The are no fears that animals haven’t been fairly graded and there are always enough buyers around a ring – and some buying on more than one account – to make sure producers have a market for everything they’ve brought to sell.”
Supporters of liveweight selling believe the tight specifications that underpin deadweight contracts can impose heavy discounts for stock falling outside the specification.
“Anyone putting primestock into the sale ring knows they’ll have a buyer for everything. So while it may be that a deadweight buyer is discounting lambs that are, say, over 40kg, lambs considerably heavier than that sold live will still find buyers and earn a fairer return on their value.”
Mr Hargreaves, who sells through Brockholes Arms Auction Mart at Garstang, Lancashire, says no argument in favour of live selling can be made without stating that the auction mart system “puts a bottom in the market”.
“The old argument that selling through the market is too time consuming is no longer valid. Our market takes lambs from 6.30am so they can be dropped off and left to be sold without taking any time out of the working day. For the most transparent method of selling stock there’s nothing to beat the auction ring.”
Deadweight selling
Simon Bainbridge, of Donkin Rigg, Cambo, Morpeth, Northumberland, has 1,400 ewes in his closed, organic flock of Swaledales and North of England Mules as well as 140 suckler cows.
“We are committed to selling deadweight. We know the price we’re going to get before anything sets foot on the wagon and leaves the farm,” says Mr Bainbridge, who sells about 100 head of Angus and Hereford-cross finished cattle a year, as well as 1,700 prime lambs.
“If you’re selling through the market and you pick the wrong week when prices are falling it can be very costly.
“Because we’re selling organic stock we’ve got access to premium-priced markets by selling deadweight into Dovecote Park and Waitrose, because they don’t buy out of the ring.”
Mr Bainbridge says the feedback he receives on how the stock kills out enables him to take an overview on his breeding policies and introduce changes if necessary.
“And we also get feedback on any health issues that may be evident from the carcass.”
Knowing what the buyer wants and marketing to that specification and weight creates an important marketing template, believes Mr Bainbridge.
“We have a dialogue with our buyers, which I find is an essential part of marketing stock. Waitrose has been good, in that we now know the price we’ll get paid on a monthly basis.”