The Courier & Advertiser (Fife Edition)
Competitiveness being eroded, say auctioneers
Concern over fixed contracts and direct sales to supermarkets
Scotland’s livestock auctioneers have called on farmers to recognise the value of the role they play in ensuring market competitiveness and transparency.
The growing challenge posed to livestock marts by fixed contracts and direct sales of animals to supermarkets was highlighted by the Institute of Auctioneers and Appraisers in Scotland (IAAS) in the publication of their annual throughput figures.
The statistics reveal almost 2.7 million head of livestock were sold by auctioneering firms in 2019 for a total of £482.5m.
While the number of animals sold was up by just over 112,000 on the previous year, the average prices achieved dropped by 8.1%, reflecting a fall in commodity prices as well as uncertainty surrounding Brexit.
However, the IAAS claimed: “There is no doubt the livestock auction system has been challenged, especially in the prime sheep sector, by those supermarket suppliers who would rather avoid competition and seek price control through direct sourcing.”
Executive director Neil Wilson added: “Negotiating power in the supply chain must not be lost and the figures for 2019 remind us of this.
“That’s why we caution against fixed contracts which can be inflexible,
“Short-term solutions may not provide long-term answers. NEIL WILSON
negatively impacting on market price and competitiveness. Short-term solutions may not provide long-term answers for agricultural enterprises.
“The live ring remains the most transparent and competitive way to sell all livestock.”
IAAS president Scott Donaldson said: “There are some positive trends in the numbers, but they also reflect the financial reality of some of the issues faced, with the trade for beef producers particularly challenging.
“The picture for lamb trade was more positive throughout 2019, but everyone’s watching anxiously to see how Brexit may affect that because we can ill afford any slump.”