Back in business with ring of confidence21Apr2010
Livestock markets closed all over Yorkshire and the remainder were under threat. Chris Berry of The Yorkshire Post reports on their revival with input from Derek Tyson.
Dead or alive? It’s not so long ago that farmers were wondering whether the traditional auction market livestock system was finished. But the past 12 months have seen all three of the main livestock market sectors of cattle, sheep and pigs enjoy their best run for some years. Prices are on the up and have advanced a long way from a grim period when lambs were being traded at £30 four years ago. Now it’s more like £80 - £90.
What has happened? Looking at the bigger picture, we saw for years steady drift away by the farmers from trading their stock at livestock markets and a shift towards “deadweight” selling. The nail in the marts coffin seemed to be foot and mouth disease. It put them out of action for around 12 months. Between 2001 and 2003 there were fears that many would never reopen. Some didn’t.
Deadweight selling looked like the future. No longer would farmers need take their stock to market to get the best price in a competitive environment. Instead they would trade with individual businesses following discussion and agreement direct through abattoirs and wholesalers in return for guaranteed prices. There are many who are still doing so.
But farmers also learned a lesson during that time. The lack of competition around a sale ring was detrimental to the prices they were able to achieve at deadweight. “The Livestock market sets the prices” is an oft heard cry from farmers and livestock auctioneers alike and without that there was a feeling that those buying through deadweight alone could manipulate prices to their own advantage.
Derek Tyson (pictured below) of Bell Ingram's Thirsk Office, standing in for the regular auctioneer Tony Thompson, explained how the sheep sector has been brought about a real feelgood factor. “It has been a nice uphill trail and you can see some of the sheep farmers smiling today. Sheep have been a consistently good trade all winter and show no sign of easing off yet”.
Further north in Cumbria where foot and mouth was especially rife, the return of farmers to the livestock marketing system has seen Hopes Auction Company of Wigan thinking about expansion. They are now contemplating a move from the centre of town to the outskirts when nine years ago the talk was whether it would ever open again. Bruce Walton, director and auctioneer at Hopes, believes that the current livestock market price might bring back some of those who went deadweight some time ago. “There are still some who are selling their stock deadweight, but if a meat company goes down, livestock farmers can be in danger of losing out. One of the major benefits for farmers selling through the auction market is you always get paid. We are certainly happy with the prices our farmers have been receiving lately and we have seen a number of farmers returning.”
Yorkshire has lost a dozen marts in the past two decades and not all those who are still around are now reporting healthy returns. The cattle market has become increasingly buoyant, but some beef men are unhappy at the rise in price of store cattle – those bought by farmers from other farmers to fatten up for the supermarkets. Peter Turnbull, who farms at Coxworld, is a noted Aberdeen Angus breeder. He believes that a price bubble may soon burst. “Store cattle are far too dear. Unless the price of beef goes up in the supermarket, these store cattle are going to lose money for those who have bought them. There’s no way those who buy them can carry on giving this sort of money. The supermarket can’t sell the beef at too high a price, that’s why they’re doing things like two-for-one offers. “With food being a cheap commodity in supermarkets – and the cattle bought by those who have to fatten them up being too dear – the margin needed is not there any more.”
Derek Tyson sees the same problem “There is definitely a squeeze on at the moment between the processors and the finishers who are caught in the middle with the price they have been giving for store cattle. The man producing the suckler calf or store animal at the start is the winner at present.”
Another of the country’s most successful livestock markets in recent years has been Selby, which also moved to the outskirts of town. Mart auctioneers Chris Clubley and Richard Haig tell of a similar story to Think and identify the cause of the rising prices.
“The year has started well” says Chris “Prices are higher than last year in all three sectors of pigs, sheep and cattle. We expected a little dip in our cattle trade but I think the shortage of cattle in this area is holding up the trade rather well.”
Rachel Haig sees the sheep market steadying as the pound grows stronger, but also warns of the same problems already being experienced by those buying store cattle and sheep “store cattle and sheep are dear going in, so they also have to be dear going out for farmers to make their margins”