Farm Ireland

Saturday 18 November 2017

Most farmers do not stand a chance against the dealers in bidding rings

John Shirley

A CHANGE of circumstances this spring gave me more time to contemplate buying cattle for summer grazing. The hope was that if I could attend enough marts and had enough stamina then I would be able to pick up value. But I reckoned without the mart ring professionals.

I did have a game plan. This included buying some short-keep stores that could be slaughtered in June and early July, by which time beef prices might eventually rise. The more weight on the animal to catch this potential price rise the better.

I also planned to take a punt on some plainer stock on the chance of the live shipping trade to North Africa resuming during the summer. (The latest update is that the prospective shippers have orders for cattle but cannot get the cattle boats approved.)

If a few cattle needed meal feeding to fatten them at the end of the season, this would be OK as long as they came at the right price. And, of course, I needed a few better-looking cattle that would be seen from the house or the main road!

So into the jungle I dived. A quick look around the pens of cattle on offer showed that the 'hairy outlier', with plenty of growth potential, was a scarce article. Most of the mart cattle had been fed a lot of meal and were really too hot to start gaining weight once they hit the grass.

A lot of the others had designs on the cattle I would have liked to have brought home. And they seemed to have more courage and deeper pockets than I. It was very hard for a farmer to buy against the dealers.

Before the auctioneer could ask for a bid on a particular lot, a dealer would put out his hand as an indication: 'I want this one.' While the dealers might hang back for each other, the individual farmer buyer was always pushed to the limit.

And the dealers are everywhere. I went to a few different marts, only to see the ring exit gate manned by the same familiar faces. I thought the dealers would take a few days off during the Punchestown National Hunt Festival in late April, but not so.

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To test out the value of the cattle and the skill of the dealers, I bought one lot of six finished cattle and sent them for immediate slaughter to a meat plant. I ended up losing the value of the last bid plus the transport.

The dealer had bid the cattle right up to the factory value before pulling out. This showed that they were able to value the cattle in the ring almost to the last cent. Mart cattle being sold for slaughter do not qualify for the Quality Assurance bonus.

Conventional wisdom says that 'the day you buy is the day you sell'. If you buy a poor beast, even at a low price, you will most likely have to sell at a poor price. But sometimes a beast that is not run-of-the-mill can be bought in marts below its real value. This can be an unusual-breed animal that should really be sold in a specially promoted sale.

I reckon some of the cheapest cattle in the marts this spring were suckler cows and calves that just turned up in the sale without being flagged or advertised. The dealers were not geared to handle such stock and the farmers that might have bought them were at home looking after their own cows and calves.

I found that the mart screens, giving the weights and ages of the cattle, date of TB test, name and address of the owner etc, were extremely helpful.

The screens helped identify cattle that had high weight for age because of a lot of meal feeding. Such cattle could take six weeks to regain their turnout weight on going to grass. At the other end of the age scale, the screens showed up the chronic bad thriver that at four years was still only yearling weight.

Trading cattle through marts is not a cheap exercise. Most marts charge €8.50 a head to the buyer, with a commission of 1.5pc and more charged to the seller. Then there is the transport to and from the mart. These are heavy costs on a low-margin enterprise.

Time will tell how badly I was polled this spring.

Irish Independent