Livestock Markets in the 21st Century - AHDB Beef & Lambbeefandlamb.ahdb.org.uk/wp-content/uploads/2013/05/... · Livestock Markets in the 21st Century 3 MLCSL 1. Introduction To

Livestock Markets in the 21st Century

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A Review of the Livestock Markets in England - the Challenges and Opportunities

Prepared by MLCSL

December 2010


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Contents Page 1. Introduction 3 2. A Short History of the Development of Livestock Markets

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3. Developments in Livestock Production in the UK Since the Early 1990s

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4. The Operation of Livestock Markets and Liveweight Prices

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5. Factors Affecting the Development of Livestock Auction Markets

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6. Livestock Markets in England in 2010 34 7. The Compliance Pressures on Livestock Auction Markets

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8. The Challenges and Opportunities Facing Livestock Markets

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9. The Future for Livestock Markets in the Next Decade

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1. Introduction To a large extent the livestock market as we know it today, and certainly their locations in much of Britain, is as much a reflection of the development of the transport networks that service them as of the areas in which livestock are produced. Many of the livestock markets still operational today can trace the history of their current locations to the development of the railway networks in the middle of the 19th Century. Over the past 50 years or so, the influence of the railways on livestock markets, has been replaced by that of the developing road network of trunk routes and motorways. In recent years, the influence of this development can be seen in the sites chosen for many of the large combined ‘livestock market and agribusiness centres’ that have been developed, many of which re-located from older town centre sites that were near railways. This report reviews the auction mart system of trading livestock, as it exists in England in 2010. It considers the structure of the livestock auctions system, how it has developed in recent years, the various factors that affect it, the challenges it faces and the opportunities for its future sustainability. The report draws upon information available to AHDB/EBLEX, the Livestock Auctioneers Association and selected reports that have been written concerning the meat and livestock industry and the role of livestock markets. As part of the review, case study visits were made to what were chosen to be a representative group of 12 livestock auction markets, with three markets from each of the four areas which EBLEX divides England into (for development purposes). These were the same as the AHDB price reporting areas comprising the: South West of England South East and Eastern England (referred to as Eastern England in price reports) Midlands North of England. The objective of the visits was to gain a better insight into the role of livestock markets today, the areas they serve and their customer base, and the issues they face, in order to assess their future in the 21st Century. The markets visited were chosen to represent one in each region from three broad groups, defined as: 1) Livestock markets in ‘traditional’ town centre sites (e.g. Thrapston), or markets with limited facilities (e.g. penning and a few small office buildings) located in rural sites. 2) Livestock markets that have moved in recent years from ‘traditional’ town centre sites to those on the edge of town, but only into new functional auction market facilities (e.g. Cirencester). 3) Livestock markets that have moved and are part of a large ‘agri –business’ complex (e.g. Sedgemoor).


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2. A Short History of the Development of Livestock Markets In common speech, the term ‘a market’ is often used to mean a specific location where trading takes place on certain occasions. In economics, the term is much wider and can refer to all the people and institutions concerned in the exchange of any commodity (which can include the whole world). Livestock markets can therefore be defined as specific locations where buyers and sellers come together to exchange live animals. The earliest form of livestock market often co-existed with those specific locations where people came together to buy and sell the essentials of everyday life. In many cases this was in a ‘market town’, from which many livestock markets still operate. Such towns often had a ‘royal charter’, granted by the monarch (usually to nobles connected with the town who had earned favour) and regarded as a highly valued privilege.1 Livestock would usually be brought to the market area of such venues, tethered or corralled in temporary pens and exchanged through ‘private treaty’ haggling between buyers and sellers. This would have been common practice until the middle of the 19th Century and beyond in even the largest towns (e.g. as illustrated by Figure 1 – The Last Days of Old Smithfield Market 1855). This method of exchange was gradually replaced around the middle of the 19th Century, by the auction method that is familiar today of an auctioneer taking ‘open out cry’ bids. This is used as a method of arriving at a sale price not only in livestock markets but also still in various formats on the trading floors of both financial, commodity and derivative markets throughout the world. Purpose-built market structures were erected in towns and cities across the country to accommodate such methods of price formation and exchange, with one of the first livestock markets as they are known in Britain today, with permanent penning and a sales ring, built at Cockermouth in 1865. This has claim to be the first of such facilities in England, although the claim for the first in Britain is held by Hawick Auction Mart. Although the beginnings of the auctioneering business at Hawick can be traced back to 18172, it was the late 1840s before it became established. This period coincides with the tariff reform campaign of Sir Robert Peel whose government in 1846 as well as more famously repealing the Corn Laws, also repealed the less well known Auction Tax. Since 1777 under the regulations governing this tax, auctioneers were under the control of the Excise, and had to inform them of such sales and keep detailed documents. These were

1 The Domesday survey of 1086 mentions 42 markets. In feudal times, all markets were the King’s property and could not be held without obtaining a Charter from the King. In recent years, the continued existence of such charters have often caused problems for local authorities who, after deciding that a market site within a town (including livestock markets) is ripe for development have oftenbeen frustrated by the responsibility of such charters, which means that local authorities have continue to provide and develop alternative sites to run the existing market. 2 See History of Andrew Oliver and Son Ltd, Hawick Auction Mart. Edited by B P Ellis


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required because any moveable goods which included livestock, if taken and sold anywhere than on the farm of origin were liable to a tax of 1 shilling in the £.

The repeal of what most saw as this iniquitous duty laid one of three main foundations for the development of the livestock auction business from the mid 1840s. The second was the gradual expansion in and improvements to livestock production and the third, but not least, was the rapid improvement of transport facilities that was also taking place at this time. The new auction at Cockermouth was a built at a site as described in an advertisement from that time - ‘that was well-served by the new railway’. By the mid 19th Century, railways were fast being built to connect the many market towns and cities that had been the centre of rural market activity for centuries. The railways made it possible for the first time for large numbers of animals to be easily assembled at nodal points and then shipped to other destinations. They enabled people such as buyers of finished stock destined for slaughter at abattoirs in the major towns and cities, to source them from greater distances, and were also responsible for the expansion in the store trade in livestock from Ireland. Figure 2 shows sheep being loaded into railway wagons for onward transport in 1896. Before the coming of the railways, the movement of livestock was only possible through driving them on foot between destinations. However, this did not prevent long distance


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movement of large numbers of livestock over a countrywide network of drove roads that had been established for centuries.3

Although the railways expedited the moving of large numbers of livestock away from a market, at first many livestock were still moved by drovers over local distances to the auction market. Because livestock can only be driven a relatively short distance in a day (distances of five to 10 miles were reported then as being common, although longer daily journeys were possible), this resulted in the establishment of a large number of markets each serving its local area. The limit as to how far farmers/drovers would move livestock to one market rather than another (i.e. the ‘catchment’ area of each market), was and is affected by the local topography, as well as by their feelings about one market in comparison with another.

In previous times for many producers selling general agricultural produce, a day at the market was just that! The journey to market took a third of the day, trading required another third, and the weary journey home used up the remaining third. A man was deemed to be able to travel 20 miles in a day and thus it was determined that markets must be at least six and two-third miles apart. It is believed that this calculation is still 3 For a detailed description of the livestock marketing network in Britain before the coming of the railways, see ‘The Drovers’ by KJ Bonser 1970 published by Macmillan. The railways were a main cause that led to the abandonment of the miles of drove roads. By 1848 there were 5,000 miles of railways in Britain. Even before 1845, the Liverpool and Manchester line was used to transport more than 100,000 animals annually. But long distance droving did not finish altogether, and the he last recorded droves of draft Welsh mountain ewes from the Tregaron area in Cardiganshire to Harrow on the Hill, Middlesex was in 1900.


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used today as the basis for the protection of general market rights, although is not specific to livestock markets. As self-propelled road transport was developed, local livestock transport companies with specialist livestock lorries (small compared to the large articulated vehicles of today) began to move more and more livestock to and from the livestock markets. These were supplemented by farmers gradually acquiring their own transport, which has since developed into the use of the ubiquitous 4x4 vehicle plus trailer that is a common method for farmers to bring livestock to market today. 4 By 1950, the total numbers of livestock carried by rail in a year were 1,750,000 cattle, 3,500,000 sheep, 330,000 pigs and 64,000 calves (source British Railways Board), but the use of road transport was gradually increasing. The transport of livestock away from markets by rail was dealt a severe blow by the Beeching report in 1963, that led to the large scale closure of many railway lines, although the numbers transported by rail were falling before this. In 1962, compared with earlier figures, the number of livestock transported by rail had fallen to 703,000 cattle, 262,000 sheep, 49,000 pigs and 40,000 calves (source British Railways Board). At about the same time, it was reported by the Road Haulage Association (whose members only represented the larger transport companies with larger vehicles), that their members operated some 3,250 livestock vehicles. Most of these vehicles had a capacity of between three and nine tons, compared to the 30 to 49-ton articulated vehicles common today, with 20 per cent of journeys being over 100 miles, 20 per cent between 60 and 100 miles, 45 per cent between 25 and 60 miles, and 15 per cent under 25 miles. By mid 1963, these vehicles and the remaining rail traffic were servicing a network of 550 livestock markets5 throughout England (in the UK as a whole there were 939, of which, 677 were in England and Wales and 856 in Great Britain). Of the the total number of markets in the UK, 569 markets were approved as ‘certification centres’ for administering the Fatstock Guarantee Scheme (of which 385 were in England and 73 in Wales). Through these UK markets, the liveweight method of selling accounted for 70 per cent of the 2.5 million cattle produced, 64 per cent of the 11.8 million sheep and 21 per cent of the 12 million pigs, sold to meet the requirements of this subsidy scheme (or the equivalent of finished/prime stock production/slaughterings). From this time onwards, the movement of livestock by road transport both to livestock markets and from them, was in the ascendancy. The development of the motorway

4 However an interesting point made by more than one of the auctioneers interviewed as part of this study was that it was not until fairly recently that the quality of diesel engines in agricultural transport vehicles such as Land Rovers (i.e. particularly the level of noise and vibration), made farmers willing to drive their livestock over distances of more than 20 to 30 miles, and thus meant that they could practically choose between selling at a local market or one further away. 5 According to the Committee of Inquiry into Fatstock and Carcase Meat Marketing and Distribution 1964. HMSO Cmnd 2282, this figure also includes what are defined as small fairs.


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network that began to be well established in the 1970s was better suited to use by the larger articulated livestock transporters, and meant that road transport began to offer large scale movement economies previously provided by railways. As the meat and livestock industry, which the livestock auction market sector served, began to change as a result of economic, social and agricultural policy developments (considered in more detail in other parts of this review), the number of livestock auction markets began to steadily decline. Better road transport contributed to the reduction in the number of the small local markets that still existed in many towns. In time, this resulted in the development of the larger livestock agri-business centres, many located nearby or with easy access to trunk road networks that today are increasingly common features in the livestock market sector. But arguably bigger forces than changes in the transport logistics were in play. In 1963 there were still 2,326 abattoirs in England and 2,681 in Great Britain (source - see footnote 4), most serving local butchers, many of who would procure livestock from the local livestock markets. The traditional and multiple butchers (such as Dewhurst) at this time accounted for an estimated 97 per cent of total retail sales of meat. Of the total amount of beef produced and imported, over 15 per cent was traded through London’s Smithfield market.6 In less than 30 years, the meat and livestock industry had seen major changes, and many of the forces driving these changes are still in play today. With membership of the European Union and the introduction of the Common Agricultural Policy, livestock farmers had further incentives to increase production, although the livestock markets role in the subsidy schemes that it previously had under the old Fatstock Guarentee scheme disappeared. By 1990 the number of prime cattle produced in the UK had increased to 2.8 million and total cattle slaughterings to 3.5 million. Lamb slaughtering had risen to 18.1 million with total sheep slaughterings at 20 million, while clean pig slaughterings had increased to 13.9 million and total pig slaughterings were 14.2 million. At the same time, the number of abattoirs in England had fallen to 660 (779 in Great Britain). While there were still over 15,000 traditional local and multiple butcher’s shops in Great Britain, their market share had been hugely eroded by the growth of the supermarkets. By 1990, the supermarkets accounted for about 41 per cent of retail sales of beef and veal, 38 per cent of mutton and lamb and 44 per cent of pork. However the major development of out-of-town superstores was still at this time in its infancy and even more rapid growth in market share was still to come.

6 It is interesting to note that the old cattle market at Smithfield was moved to Islington’s Copenhagen Fields in 1855. The Central Meat Market at the old live market site opened in 1868. The Metropolitan Cattle Market at Islington, near the Caledonian road, was quickly a success and by 1864 was selling 210,755 cattle and 1,518,510 sheep. Even by 1925, when the meat market had changed considerably, the total number of animals sent to the market was 111,591. It continued to function until 1939 when it was closed because of the wartime conditions and never re-opened as a livestock market, but functioned as an antique market known as the Caledonian Market.


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Although at this time there were still a relatively large number of abattoirs, many were very small and only a small number of the larger ones, that increasingly also packed the meat, were supplying the supermarkets. However, it was these plants that had driven the growth of the deadweight supply chain, which was gradually taking market share of finished cattle and pig sales from the livestock markets. By 1990 there were, according to the Livestock Auctioneers Association, 259 livestock markets operating in England and Wales (compared to 677 in 1963). On a Great Britain basis, live markets were estimated to account for 57 per cent of total sales of finished cattle, but only eight per cent of pig sales. Their share of sheep sales had however increased, and in Great Britain in 1990 over 72 per cent of sheep for slaughter were sold liveweight. One of the reasons for this was the growth in the live export trade to Europe. This rationalisation in the number of markets had also been accompanied by investment as illustrated by the development of the ‘agri-business centre’ (with one of the first built to accommodate the relocated York market in 1971). A number of markets also benefited over this period from access to capital grants from various EC sources, which enabled them to improve existing and build new facilities. These trends, influenced by other major factors (e.g. disease, particularly the Foot and Mouth crisis in 2001, discussed in more detail in Section 5), have continued up to the present day, although the livestock market remains an important part of the structure of farming throughout England and Great Britain. The continued gradual rationalisation in the sector has seen a steady decline in the number of markets but also major investment for the future in others. In mid-2010, there were 80 livestock markets that were identified as being in regular operation in England (with an additional further four smaller markets that had been in regular use, two of which now operated only as collection centres and two undertook periodic specialist sales – see Section 6). Of those in regular use, in England 74 of these were AHDB/MI price reporting centres in 2010 (in addition there were 25 price reporting centres in Wales and 17 price reporting centres in Scotland). All of the 80 markets in England as defined above are looked at in detail in this review together with their structural and geographic distribution. In addition, other places also exist where markets and fairs are held to accommodate large sales of breeding livestock, like the large seasonal sales of breeding stock that used to be held yearly at Bicester but is now located at the Thame show ground in Oxfordshire. While the share of the liveweight markets in the sale of finished cattle in particular has continued to steadily decline in the face of increasing deadweight sales, there has been some resurgence in the sale of sheep through live markets, since such trade was almost wiped out in the aftermath of the foot and mouth disease crisis in 2001. Markets have also benefited from the removal of the ban on selling older cull cattle for human consumption (which came about as a result of the BSE crisis and lasted more than 10 years), by the resumption of the sale of such cattle in markets.


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The role of auction markets for the selling of pigs has diminished further, with only 24 of the 80 markets identified above recorded as selling pigs in 2009. The pig production industry has consolidated into a relatively small number of large units, most supplying pigs directly to an even more concentrated group of specialist pig abattoir processors on a contractual basis. Similar to pigs, most poultry produced in the country is consigned direct to the large processing plants operated by a very small number of companies, through in many cases a vertically integrated supply chain. Many auctions do still hold specialist ‘small animal’ or ‘fur and feather’ sales, some seasonally, that are used particularly by small holders/farmers to sell breeding stock and seasonally finished specialist birds, like turkeys, guinea fowl and quail. In addition to their continued role in the sale of livestock for slaughter, livestock markets also remain very important for the ‘farmer to farmer’ trading of store and breeding animals. While various other forms of sales for store and breeding livestock (e.g. using electronic computer and video technology) have been tried, they have not proved popular, as buyers like to see first-hand the stock that they are considering buying. More recently internet-based activity is beginning to link some of the more sophisticated livestock breeders and finishers together in new ways, particularly pedigree breeders, but it has so far not made the inroads into the wider commercial livestock production systems that some expected. Many livestock farmers still do not have the time, or sometimes the necessary skills, to use or make best use of PC-based systems, as the difficulties encountered by the DEFRA-sponsored Red Meat Industry Forum showed, when from 2004 to 2008 they had mixed success in getting farmers to record either physical or financial data online using PC based systems. As long as farmers and buyers wish to see the live animal before they make a purchase, the live market system in England provides a tried and tested way of assembling livestock for sale, and arriving at a price in an open and transparent way, on which the trade can be made. Livestock markets generally have a range of buyers from small butcher shops through to wholesalers, main multiples and export buyers and the range of stock offered for sale allows those buyers to fill orders with stock they deem suitable for the particular end use.


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3. Developments in Livestock Production in the UK since the Early 1990s Today, livestock markets exist to service an industry that rears livestock primarily for the production of meat or milk and dairy products, although the residual products from this industry, such as the hides and skins, and other 5th quarter products, the wool from sheep, and the manure, also support industry sub sectors of a significant size. Any changes in the factors that encourage or discourage farmers to keep such livestock will clearly have an effect on the future role of livestock auction markets. This section briefly reviews the main changes that have occurred in the past two decades which have affected livestock production and livestock numbers. Changes in EU Agricultural Policy Since the beginning of the 1990s, a succession of major EU policy changes have been introduced which have affected the development of agriculture in the UK. The introduction of the Single Market from January 1993 necessitated the replacement of the variable premium support systems in the cattle and sheep sectors and the abolition of the monetary compensatory amounts (MCA) system, which acted to offset currency movements through a system of taxes and subsidies on traded meat and livestock. Additionally, the introduction of headage limits for eligibility of subsides on cattle and sheep effectively capped the expansion of herds and flocks that had been occurring since the late 1970s. Disease and Terms of Trade However, far worse things than policy changes lay in store for the industry from 1995 onwards. After relatively good economic times in the 1980s and early 1990s, with subsidised production (for cattle and sheep) and good demand in the domestic and a growing export market, the UK cattle sector was the first to experience problems, being severely affected by the Bovine Spongiform Encephalopathy (BSE) crisis from 1996. The sheep and pig sectors, which had developed large export markets, soon followed, affected by terms of trade issues that began in 1999. In the absence of subsidies, poor profitability had been a serious problem in the British pig sector, and in the 10 years from 1995 to 2005, the number of holdings with breeding sows fell by 33 per cent, and the number of holdings with total pigs fell by 11 per cent. The pig herd began to seriously decline from 1999 onwards, when there were more than 700,000 breeding sows in the UK. This fell to 430,000 by late 2007 but began to show slight recovery in 2009. Problems facing the GB cattle and sheep sector in particular were exacerbated by the outbreak of Foot and Mouth Disease (FMD) in 2001, particularly in the South West, which led to a further decline in numbers. In 2003, this trend showed signs of flattening out as


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sheep and cattle numbers in the UK increased slightly, although the further smaller FMD outbreak in 2007 caused a hiatus New problems have been caused by the outbreaks of disease, including FMD and Bluetongue Virus (BTV) in 2007, and of course the spread of TB in cattle herds. Even the poultry sector has not escaped unscathed, as a result of the various avian flu scares. Reform of the CAP January 2005 saw the commencement of the latest reform of the CAP. The reform was agreed in 2003 and has proved to be one of the most radical overhauls of the EU’s farm support system. The underlying principle of the new CAP approach revolved around the decoupling of farm support measures. Previously the CAP delivered financial assistance to farmers based on their production levels, hence support was coupled to production. The new approach has broken this link and, in theory, all future support payments will be based on environmental and biodiversity objectives rather than commodity output. These new objectives have been categorised under the term cross compliance. Farmers can also gain other methods of financial reward by signing up to various agri-environmental stewardship schemes that demand standards over and above cross compliance to be met. It is widely recognised that in the future, EU farm commodities will be exposed to the world markets more so than ever before. Even though the latest round of negotiations under the WTO has stalled and only produced agreement on the ‘modalities’ around which future negotiations should proceed, it is largely anticipated that the EU market will continue to become more open to imports from Third Countries. This was in 2006/07 and was expected to cause greater price fluctuations of EU farm produce. However, the international economic downturn (recession?), has led to a decline in international trade and an increase in EU commodity prices, in particular for livestock and meat from 2007, which has improved what were more dismal prospects for EU and UK livestock farmers. That said, the uncertainties caused by the global trading can be seen in the concern over increasing feed prices in 2010, following potential problems in supplies from Russia and nearby states. The likely effects on future livestock production as a result of the CAP reform were proving very difficult to predict, even before the economic upsets at the end of the last decade. As a result, livestock producers have been very cautious, and are tending to take a ‘wait and see’ approach over the issue of decoupling and its effect on their businesses, even with the significant increases seen in livestock prices from 2007 to date, before making any major changes to their stocking and cropping plans. The speed of the industry to react to the effects of decoupling has also been slowed as a result of the transitional approach of the Single Farm Payment (SFP) that England has chosen to take up. This in effect has lessened the immediate impact of the CAP reform on English producers. Also, the level of the SFP that is invested to improve business efficiency, as opposed to an income stream, will determine the future economic prosperity of livestock production.


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Lifting of the OTM Ban The other change that the industry has been faced with was the lifting of the Over Thirty Months (OTM) ban and cow meat returning to the food chain, subject to meeting certain criteria. This undoubtedly benefited the cattle sector and in particular saw an increase in the number of cattle being sold through livestock markets. The end of the OTM ruling a short period before the lifting of the beef export ban helped begin the recovery of beef export markets. In addition, the beef and sheep meat export market has also benefited from the weakness of Sterling against the Euro in recent years Problems in the Dairy Sector Over the same period, the dairy sector, whose offspring make up 40 per cent of home produced beef, and cull cows that make up a further 11 per cent, experienced a steady population decrease. This is predominately as a result of the continued tight margins and low milk price being experienced by the sector at present. This has led to the increase in the average herd size as the drive for better economies of scale is realised, and the pressure for super-sized herds, such as the 8,000 cow herd proposed at Nocton in Lincolnshire. Declining Livestock Numbers As a result of all of these forces and uncertainties, there has been a gradual decline in livestock numbers, and hence in the potential livestock that may be offered for sale through livestock markets Table 1 shows how livestock numbers decreased between 2000 and 2009. Although the reduction has since levelled off, the total number of cattle, sheep and pigs appears to be experiencing continued reduction. Whether the significant increases in livestock prices seen in 2008 and 2009 (described in more detail in the following section) will trigger a supply response such as that which such price changes would have done at any time up to the late 1990s early 2000s, remains to be seen. As explained, there are many reasons for caution on the impact of changes in agricultural policy to economic uncertainty. Many of the representatives of the auction markets we visited as part of this study commented on this and the steady number of farm dispersal sales they are seeing, particularly in the hill and upland areas.


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Table 1: UK Total Livestock Numbers: 000s 2000 2002 2006 2009 %Change

00/09 %Change 06/09

Total cattle and calves

11,135 10,345 10,579 9,901 -11.1 -6.4

Total sheep and lambs

42,264 35,834 34,722 32,028 -24.2 -7.7

Total pigs 6,482 5,588 4,933 4,724 -27.1 -4.2 Source: Defra June Census * Figures for 2005 Census are provisional The above figures for the sheep flock (and those in Table 2) are somewhat misleading however, as by far the largest reduction in sheep numbers was caused by the FMD crisis in 2001. Sheep numbers have since stabilised but, because of other uncertainties in the market, have still shown a slight decline. Overall, the declining trend in livestock numbers is generally expected to continue in the immediate future, but the forces for change are affecting different parts of the livestock production sector in different ways. The cattle and sheep sectors in GB are typified by a large number of producers. Many are either micro enterprises or small to medium enterprises (SMEs) and, while concentration in the sector is changing due to modifications in the subsidy structure (i.e. CAP reform, with direct subsidies giving way to the Single Farm Payment from 2005), consolidation has been limited. However, in the cattle sector the auction markets visited noted the growth in the importance of the specialist beef finisher that is taking place, seen in more steady demand for volumes of store cattle from a smaller number of larger buyers. Although many of these units are more prone to sell on a deadweight basis due to constraints of the six-day standstill period (see Section 5 for a full explanation of this), and the perceived negotiating powers these units may have in terms of setting a base price for larger, regular loads of ‘in specification’ cattle, they also use the livestock markets as price testing arenas on a regular basis. At the same time, the auctioneers noted that many smaller/medium sized cattle producers are moving away from trying to finish (and selling finished cattle) to producing store cattle. This was felt to be due to reducing risk by keeping the animal a shorter time, decreasing costs such as feed and over-wintering, and also enhanced by the high store prices seen of late. In the sheep sector, there has been a trend in the growth of large flocks but also a reduction in the number of flocks in the hill and upland areas, which was commented on by auctioneers in livestock markets that served these areas. With the removal of direct subsidies in 2005, cattle and sheep enterprises depend on profits generated in the market. However, research such as EBLEX Business Pointers,


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showed that the average cattle and sheep holdings, particularly suckler beef and hill/upland sheep, in 2006 made net losses, with only store cattle finishers making a profit. Fortunately, from 2008 to the early part of 2010, finished cattle and sheep prices increased, in the face of shortages in supply, although cattle prices have fallen back again since then. Sheep prices have, however, continued to increase, helped by export demand. Prices seem also to have kept pace with the increase in costs particularly of fertiliser, fuel and feed, which have shown some decline since the highs of 2009. Reducing costs of production is a clear priority for the industry and this is an area where EBLEX, for example, is targeting its Better Returns Programme. Table 2: UK Breeding Numbers: 000s 2000 2002 2006 2009 %Change

00/09 %Change 06/09

Total cows 4,178 3,884 3,716 3,486* -16.6 -6.2 Breeding sheep flock

20,449 17,630 16,637 14,912 -27.1 -10.4

Breeding pig herd

610 558 468 445 -27.1 -4.9

Source: Defra June Census * Made up of 1,864,000 dairy cows (a fall of 20.0% since 2000) and 1,622,000 beef cows (a fall of 12% since 2004/05) For a time, it seemed that many beef and lamb producers were being driven in one of two directions. The first was the commodity-based approach, relying on efficiency and economies of scale that help to withstand the increasing exposure to international markets. The second approach appeared to be the ‘niche’ or specialist market type of production, that sometimes involved the actual production and selling of the meat. These latter types of enterprises are often on a smaller scale to those of the commodity-based enterprises. The niche producers’ hope is that they can tap into higher-value sectors of the marketplace, which can return significant premiums over commodity goods. However, the significant increase in cattle and sheep prices seen in recent years (accompanied by the recession in the rest of the economy), has meant that it has become more and more difficult for such producers to derive additional premiums over what is seen as an already expensive product compared to other meats such as poultry or pig meat products. The well-documented difficulties currently being faced by organic producers, who have always sought much higher premiums, are a good illustration of this. As a result, many cattle and sheep producers have turned to focusing more of their production and marketing to servicing the specialist sectors of the ‘commodity livestock market’. This is an approach that EBLEX has been helping livestock farmers to undertake through activities in its Better Returns Programme, that highlights the different markets that exist for different types of livestock.


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4. The Operation of Livestock Markets and Liveweight Prices This section considers in more detail how livestock auction markets and the liveweight marketing system operates, and illustrates the major advantages to the seller and the buyer of this system as well as the problems and issues that can arise, not least for the auction market company itself. The Method of Sale The price of livestock is usually stated in one of three ways. Breeding and store stock are most often referred to on a headage basis, thus the total price in pounds will be given for one animal. Finished livestock being sold for slaughter on a liveweight basis, are usually recorded as ‘pence per kilo liveweight’, or stated as p/kg/lw, although in most markets finished lambs will be sold on a headage basis. Cull ewes are also generally being sold on a headage basis. The third method of measuring the price of livestock is on a carcase basis, as is the approach taken by abattoirs procuring stock direct from farm. They state the price of the finished livestock that they process as ‘pence per kilo deadweight’, or written as p/kg/dw. In some instances, but which nowadays are confined largely to sales of pedigree breeding stock, livestock are still sold by an auctioneer in Guineas. This old English currency was originally worth 21 shillings and has been adopted by some auctioneers for its traditional values. A Guinea is the equivalent to £1.05 for the purposes of conversion.


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Finished cattle are invariably sold individually. Store cattle and followers tend to be sold more in small, evenly matched groups in the ring, as illustrated in Figure 3. The amount of information that is stated verbally and/or on electronic screens is discrete, but provides enough information together with the visual appraisal in the ring for a buyer to assess the animals on weight, age, breed, fatness/finish, conformation, condition and any special attributes, such as farm assurance status. For sheep and pigs, except in the North of England where selling through the ring is more common, the auctioneer will normally sell them as batches in pens, moving from pen to pen with the buyers, as illustrated in Figure 4.

For finished lambs where possible, buyers prefer sale lots to contain animals of a similar type/quality. In some markets, staff will sort the animals as they are delivered to achieve this, (with some using independent sorting staff such as provided by MLCSL). However, our interviews with auctioneers indicated that this is still, to some sellers and even a few buyers, a controversial issue, with some preferring that no such sorting take place. The fear is that the poorest sorted animals will make an insufficient price to compensate for them not being sold at a more average price with better quality animals. The method of sale remains as it was a 150 years ago, with the auctioneer taking bids from buyers in what is technically an ‘open outcry’ rising price system, with the trade concluded when a price is reached above which no other buyers are willing to bid. This is the price that the sellers will usually accept as defining the terms of trade, particularly for


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finished livestock, although for high quality store and breeding livestock, sellers may have an un-stated reserve price, which if not met will allow them to remove the livestock from sale. Auction markets use their sales teams and field staff to encourage sales through the market. One of the auctioneers interviewed as part of the study put this in terms of the fact that, more than ever, they have to offer a complete livestock marketing service to their customers that is not reliant on the expectation that a producer will bring livestock to the market at a certain time of the year because that is what they have always done. A well-managed auction starts for the auctioneers many weeks before the market. In the past, this was particularly true for the specialist seasonal store and breeding stock sales, where it is required that a catalogue is produced to advertise the sale. But today it is more and more the case with the more regular store sales. A successful auctioneer will have a sound knowledge of the livestock that are finishing on the clients’ farms and will increasingly advise them on many issues directly related to livestock production and marketing (e.g. required finish of livestock, state of the market, tagging requirements, movement regulations, transport) as well as more indirect issues like as Single Farm Payments. Many of the auction market companies interviewed as part of this study will also organise deadweight sales on behalf of clients, with the involvement ranging from ad-hoc arrangements for clients tied up with TB or the use of the market as a collection centre on non liveweight sale days, to offering a complete service liaising with the buyers and the sellers. The Livestock Sellers Our interviews with the representative group of markets indicated that while all markets principally draw customers from the surrounding local area, the size of this catchment area varies from market to market. It will depend on the size of the market, as represented by the normal levels of throughput on regular market days and/or by the expected throughput on periodic/seasonal/special sale days, the quality/efficiency of the road network that connects it and the local topography.7 Many of the markets interviewed indicated that a radius of 25 to 40 miles was a typical distance which many of their sellers travelled (longer or shorter depending on road communications and topography), except for special sales when sellers could come from a much larger distance. There was a group of markets however, which were at times of the year increasingly competing with each other on a cross-regional basis, particularly as regards the larger cattle and sheep markets, for example Newark for cattle and Longtown for sheep, and those serving areas where many smaller local markets had closed, such as Melton Mowbray that also draws sheep from much of Eastern England. 7 It is interesting to note from comments made by auctioneers, that as in the days when animals had to be driven to the market and a geographic feature that made a journey less straightforward resulted in sellers going to one market over another (e.g. on the other side of the hill), the perception of that feature can still be a factor, even if it today only means the difference of a relatively short period of time.


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In many markets the producer is still present when the animals are sold, but it is becoming more common for sellers to bring the livestock to the market and unload them, leaving and then returning later to see the result of the sale. In some markets, it was reported that producers leave the entire process to the auctioneer and do not accompany their animals to the market at all. The occasions where producers will take livestock away because they did not meet an expected reserve price, are, becoming fewer. This is mainly due to markets providing an overall better service to the sellers than was the case 10 or 20 years ago. In addition it was felt that the operation of the ‘six-day rule’, which will be discussed late, also affected this. A successful market is one that will attract large numbers of buyers and sellers, that will provide what is often described as a ‘buzz’ of activity and a dialogue and exchanges of views, news and ideas amongst those present. This contributes to the wholesale experience, particularly if producers get good prices and buyers can source the type and number of livestock they want. While it is true that in many markets there is an ageing seller profile, on closer inspection this seems to be more a reflection of the changing nature of the size of the labour force on the farm. As farms have become more mechanised and the numbers working on them have fallen, it is more likely that on family farms in particular, the less physically active member of the family will usually elect to undertake the regular trip to market. For many, young or old, the social dimension of attending a livestock auction market is also still a very good way of networking with others and updating their knowledge about what has become a fast changing and for many farmers because of a reduction in the labour force on farms, an increasingly ‘lonely’ industry.


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The Livestock Buyers As with livestock sellers, interviews with the representative group of markets indicated that while all markets draw customers wishing to use the market to buy livestock from the surrounding local area, there are also increasingly customers that will travel from much further afield. For livestock farmers wishing to purchase store and breeding livestock, this will especially be the case for the larger seasonal/periodic/special sales. For the buyers of finished livestock, the rationalisation that has occurred in the abattoir sector in recent years combined with an increasing tendency of the larger plants to supply dedicated outlets, means plants need regular supplies of particular qualities of livestock (as discussed in more detail in the next section). This means that either their buyers will regularly come from much greater distances, to the larger markets in particular, or their representatives may themselves be local but will be buying livestock for a number of customers on a regional or even a national basis. Prices and Market Fees In theory, the prices that livestock can command will be dependent on the economic market forces of supply and demand, although at times other less obvious factors can affect the operation of these fundamental forces (e.g. as happened when some of the previous direct subsidy schemes were in place – see footnote 8). For finished cattle and sheep sales, the transparency of price formation within the deadweight selling process is still not as clear to many as it could be. The open outcry system of price formation seems much clearer for many, even though in reality there may be a restricted number of buyers, with some agents buying on more than one account. The impact of the development of deadweight selling will be discussed in some more detail later. However, it is interesting to note that a great deal of interest about the latest average weekly liveweight prices still comes from deadweight purchasers setting price schedules for the following week. Livestock markets work on a commission basis for selling livestock. Typically, in markets for finished stock this is between 2% and 4%, and often subject to a minimum fee. A few markets will also add set charges such as entry fees or tolls on a headage basis that vary by the type of livestock, and some will also add charges to help recover lorry wash fees or pay for the cost of bad debt insurance. 8 For example, when there was a direct subsidy based on a headage payment system for beef cattle and sheep this sometimes caused the values of stock to be artificially high. Although this could never be directly seen, it was apparent that many transactions of breeding and store stock were taking place at certain times and at certain prices purely for the ability to claim livestock headage payments. Now that the headage payment system has been superseded by a new look approach to the CAP (described earlier), market forces alone will increasingly determine livestock values.


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There has also been a tendency over the years for abattoir buyers to try and force additional costs back onto the farmer. For example, the majority of markets will deduct Anti-Mortem Inspection charges (AMI), whilst others still charge a fee for the removal of some specified risk materials, a practice that was forced on markets initially following the problems with BSE. In some cases these additional deductions have also come to be added to auction market charges and have at times become mixed up with the statutory AHDB (previously MLC) levy. This has resulted in farmers in some cases believing that the levy they are paying is much higher than it actually is, a problem which is now being addressed. Other older practices also survive, such as the giving of ‘luck’ money (see footnote 9). Payment The livestock auction company sells livestock on behalf of the producer and collects the money from the buyer. In the past, most livestock producers selling stock expected payment from the auctioneers on the day of the sale, whereas most finished livestock buyers would pay the auctioneers at later date. Thus the auction market bore the risk of bad debt from the buyer,10 as well as the interest on any outstanding amounts. Although it is becoming more common for producers to be paid by cheque or bank transfer within a week of the sale, our interviews with auctioneers and subsequent research showed that many markets would still pay farmers on the day. This practice when combined with the extended credit facilities given to some customers regularly buying livestock, can cause serious cash flow problems unless it is properly managed. Tracking the extent and exposure to indebtedness is crucial for the successful operation of auction markets and a great deal of their investment is in computer-based back office systems, such as those offered by Newline, XKO, and Infoscience, that help track such debt. Our interviews with auction markets indicated that many now take out bad debt insurance. Many markets have a history of bad debt that has affected their development and many have customers from certain sections of the livestock trade whom they are wary of dealing with. However, if they are to continue to attract customers, their room to manoeuvre is limited and risks have to be taken. Most livestock markets still pay the producer for the stock sold within a shorter period than abattoirs, if not on the day of the sale. Therefore, many farmers still prefer selling through the livestock market system rather than direct to abattoirs because of either the fear of bad debt or to avoid the problems with cash flow caused by slow payment.

9 A traditional practice that still survives in some parts of the country, is in the practice of the giving of ‘luck money’, whereby the vendor of the livestock rewards the buyer of that stock with a token sum of money. 10 It seems that this was ever the case for the meat trade. Records from Old Smithfield market show that cash sales for livestock were few, and all butchers took them on credit, arranging to pay at a stated inn immediately adjacent to the market three weeks later, the carcases having then been sold. There were a great many inns, of varying repute – see ‘The Drovers’ referred to earlier.


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Weak and Strong Livestock Prices The auctioneer’s income is influenced not only by the throughput of stock, but also by the sale price of livestock, because a sales commission is taken as a proportion of the total value of the animal. This meant that from 1996 up to 2007 when livestock prices were relatively weak, auctioneers’ margins were also very poor, but as livestock prices have increased, margins have improved. Up until 2006/07, cattle and sheep prices had been weak from the beginning of the BSE crisis and the terms of trade crisis in the late 1990s (referred to earlier), as shown in Table 3. Table 3: GB Slaughter Livestock Prices for Cattle and Sheep– 1995 to 2009 rounded to nearest pence

Livestock Prices – Average Price per Kilogram

Steers (p per kg lw)

Steers (p per kg dw)

Sheep (p per kg Dw *

Sheep (p per kg lw) SQQ

1995 124 225 Ni 111 1996 107 193 Ni 133 1997 97 179 Ni 121 1998 86 162 Ni 90 1999 94 175 Ni 84 2000 91 171 Ni 87 2001 N/a - FMD 166 Ni N/a - FMD 2002 92 171 235 107 2003 95 176 264 120 2004 102 188 262 118 2005 103 189 246 112 2006 111 204 256 114 2007 112 208 236 104 2008 144 261 298 129 2009 155 281 350 158

Source: MLC/AHDB Ni – no information * Note- deadweight sheep prices have been and are currently only derived from a small number of

abattoirs and are less comparable with liveweight prices in the short term than is the case with the cattle prices, although in the longer term they reflect the overall trends in the market. The low prices for finished/slaughter stock over the period from 1996 to 2006 increased pressures on livestock markets and made it more difficult for them to operate as viable businesses that generated a large percentage of their income from slaughter stock sales. Other Sources of Income Over the period when the prices for finished livestock were weak, the income obtained for markets from the sales of store and breeding stock became more important, and remains so today.


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Many livestock market auctioneers have kept solvent by effectively subsidising the livestock sales business of their companies with income derived from their associated chartered surveyors and property agency businesses. In many cases, the market acted as an agricultural network, vectoring in the demands for other professional services from clients. This is reflected in the wider business activity of all of the auctioneers who were interviewed as part of this study. The structural location of livestock markets as the centre of a local agricultural network puts many of their operators in a prime position to initiate many other business activities. Many markets also supplement their livestock sale revenue by holding non-livestock based sales activities on the market site, like car boot sales, antiques fairs, fine arts sales, machinery and vehicle sales, farmers markets and stall markets.These are occasionally held on the same day as the main livestock sales, although mostly on other days.. Where their facilities are on larger out-of-town centre agri-business sites, additional revenue is also generated from rents from franchises on the site, which as well as cafes, and agricultural merchants and the providers of professional services to the agricultural sector, can include businesses as diverse as hairdressers and model shops, as well as from the hire of halls and meeting rooms. An increasing number of markets also hold more agricultural-based lifestyle sales, aimed more specifically at the part time and hobby farmers who have populated increasing sections of the rural community in recent years. These sales have, for some markets, brought back the sales of small numbers of pigs, as well as the rare breeds of animals often favoured by such producers The significant increases seen in prices in the between 2008 and the early part of 2010 for all stock, with sheep prices still remaining high at this time, have provided a much-needed economic boost for livestock auction companies, even though it has been accompanied by a decline in the total number of livestock being produced. Costs In 1985, the then MLC carried out a survey of British livestock markets, which included a costing benchmark based on results from 29 markets out of a total number operational in Great Britain at that time of 311. This showed that the principle cost of running a market at this time was made up of salaries and wages, including auctioneers, permanent and casual market staff, administrative staff, cleaners and fieldsmen, which accounted for 44% of total costs. Of all the other costs, none individually made up more than 6% of the total. Of these, the principle ones, excluding depreciation, were in order of importance – bank charges and other financial costs, rent, rates and advertising. Although this work has not been repeated in this detail since, project work by MLCSL with individual markets have shown that by and large, this remains a fair reflection of the cost


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situation facing most markets today. The exception to this is, as with all businesses, energy and water costs have increased as a proportion of total costs, while for many markets the costs (both operational and capital) involved with the treatment, removal and disposal of effluent and other waste materials have become much more significant. Rates are due for revaluation in 2010. The basis for Revaluation 2010 will remain related to income in terms of gross commission but will also reflect the size of the facility, its structure and the services offered and so will vary according to the type of market. Factors such as the degree of local competition and the extent and nature of the catchments area will have a bearing on the valuation. Profitability When the main source of income for many markets is the commissions they receive on livestock sales, which in turn are heavily dependent on livestock price, the long period of relatively weak livestock prices from 1996 to 2007 has seriously affected their profitability. This was because this period of weak prices was accompanied by a steady inflation in the cost of most inputs required in running a livestock market. This resulted in a classic cost-price squeeze. The increasing costs and the decline of profitability that occurred over this period have been commented on by a number of independent studies11, and was undoubtedly a major reason for the closure of many of the smaller markets in particular (as identified in Section 6). These economic pressures were also exacerbated by a number of significant factors other than the steady decline in livestock numbers. These factors are now considered in some more detail in the following section, as many of them have an ongoing implication for the future sustainability of livestock markets. Despite the significant decline in national livestock numbers, in more recent years increases in the throughputs of some types of livestock, together with higher prices resulting in higher commissions, have meant that the turnover per market for many markets in England has been higher than for some time.

11 See the work done by JVH Jones e.g. ‘The economic pressures for change being felt by the livestock auction markets’ Proceedings of RICS Roots 1997 Reading conference; and more recently ‘Time to take stock?-A review of prospects for livestock auction markets’. RICS Roots 2008 Oxford conference.


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5. Factors Affecting the Development of Livestock Auction Markets The continued gradual decline in the number of livestock auction markets (seen in the reduction from the estimated 259 operating regularly as sellers of finished livestock and price reporting to MLC in England and Wales in 1990, to the 99 price reporting to AHDB in mid-2010, referred to in Section 2), has occurred for a combination of reasons. The decline in the number of livestock produced has been a major issue, but there have also been a number of other significant factors. The influence of these needs to be considered to understand not only the impact they have had, but any further impact gong forwards. The major ones this review has identified are:

Disease - the impact of the Foot and Mouth Crisis (FMD) Increase in competition from the deadweight sale of finished livestock The Influence of the Over Thirty Months Scheme (OTMS) The requirements to control the bovine TB crisis in the cattle industry The effect on livestock markets of falling abattoir numbers

Disease - The Impact of the Foot and Mouth Crisis (FMD) The 2001 Foot and Mouth (FMD) crisis was a major blow to the livestock production industry in general, but to livestock auction markets in particular. For almost a 13 monthslivestock markets had to effectively close, due to various bans on the transportation of livestock to combat the disease. During this period, livestock for slaughter could only be moved through a direct supply chain to abattoirs, although some markets established slaughter-only collection centres which operated under stringent conditions. One of the lasting effects of this crisis was the introduction of the Disease Control Order (England) 2003 as amended (with similar in other parts of the UK). This Order states animal movements must not take place from any premises where one or more animals have been moved onto those premises in the six-day period (or 20 days for any pigs on a holding onto which pigs have been moved) prior to the movement (with some exemptions). Many of the auctioneers interviewed as part of this study felt that this requirement had also effectively stopped part of the activity of many livestock dealers, some of whom in past times operated a type of arbitrage trade between markets, taking advantage of local knowledge and differences in changing prices between markets. In addition the compliance with the requirements of the Animal Gathering Order (see Section 7) were generally tightened up after 2001, which had a major impact on and was a factor in the closure of many of the older smaller markets that needed investment to meet these standards. It was expected by some that the effect of the FMD crisis would see the end of many livestock auction markets, if not the system of the liveweight marketing of finished livestock as a whole, as deadweight buyers had a period with no effective competition, to


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encourage and facilitate livestock producers to remain with the deadweight system of marketing after the FMD marketing and transportation bans had been relaxed. As will be shown in the next sub section, this is not what subsequently happened.

Outbreaks of Foot and Mouth Disease in August 2007 meant that markets were once again forced to close for a short period, which unfortunately also coincided with the peak marketing season of the year. Shortly after the imposition of restrictions for Blue Tongue (which is a midge-carried viral disease), which had slowly moved up through Europe into the UK, meant that the markets could remain open, but for a time their trade was severely hampered. This was because of restrictions on movements of cattle and sheep in or out of the respective zones, or even into the clear area, until the protection zones were expanded to cover the whole of England, Wales and Scotland on 3 November 2008.

Increases in Deadweight Selling Livestock sold on a deadweight basis are generally sold direct to the buyers at the main abattoirs, or through their field representatives, who are sometimes agents acting on behalf of a number of clients (and even dealing in their own right), or through livestock procurement groups often owned and run by farmers, thereby bypassing livestock markets altogether. In the nine years since the 2001 FMD crisis, livestock markets and the system of liveweight marketing have, however, proven much more resilient for the sale of cattle and sheep than many expected. The latest information on the national share of primary livestock marketing is shown in Table 4. Table 4. National Share of Primary Livestock Marketings. GB Slaughtering Analysed By Marketing Type (Percentage Breakdown) – 2000 to 2009:

2000 2006 2009 Liveweight 39.4 23.8 23.6 All cattle Deadweight 60.6 76.2 76.4

Of which prime cattle Liveweight 39.4 23.6 19.6 Deadweight 60.6 76.4 80.4 Cows/bulls Liveweight na 24.8 40.0 Deadweight na 75.2 60.0

Liveweight 54.1 52.6 57.1 All sheep Deadweight 46.0 47.4 42.9 Of which clean sheep Liveweight 52.0 49.7 54.2 Deadweight 48.0 50.3 45.8 Ewes and rams Liveweight 67.7 69.7 74.2 Deadweight 32.3 30.3 25.8

Liveweight 3.6 0.8 0.6 All pigs Deadweight 96.4 99.2 99.4 Source. MLC/AHDB; na – not available


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Finished cattle numbers sold through market, although declining, have not fallen by as much as many expected since the 2001 FMD crisis. Sheep sales in recent years have recovered so that the auction market share is higher than in the year prior to the FMD crisis. The markets have also re-captured a large share of the markets for cull cows since the ban was removed in 2006. Total GB slaughterings of livestock for comparable years, of which the figures in Table 4 are percentages, are shown in Table 5. Table 5. Total GB slaughterings of cattle, sheep and pigs in 2000, 2006 and 2009 000s 2000 2006 2009 Cattle and calves 2,020* 2,208 2,174 * Sheep 17,783 15,533 14,799 Pigs 11,434 7,902 7,676 Source Defra/AHDB Note: In 2000, prime cattle accounted for almost 100% of total cattle slaughtering (including prime cattle, cows and bulls). In 2009, prime cattle slaughterings in GB had declined by similar amount to the 11% fall seen in UK as a whole, and cull cow slaughterings accounted for 20% of total UK total cattle slaughtering. Clearly any further pressure to increase the deadweight selling of finished stock is a major threat to the future sustainability and viability of livestock markets. This pressure for an increase in direct/deadweight selling has come almost totally from the large supermarkets, whose share of the retail red meat market has been steadily growing, via the large abattoir groups that supply them. Table 6, is an analysis of the source of household purchases for the 52 weeks ended February 2010, taken from continuous panel information subscribed to by AHDB. These figures show that for household purchases from retailers for red meat:

a) The dominance today of the large multiple supermarket companies, within all three species 13 major companies (including their internet-ordered home delivery services sales), plus a small number of other freezer store groups and regional supermarkets, such as Booth’s, accounting for almost 90% of retail sales.

b) The extent to which the share of traditional high street specialist butchers has

declined, e.g. from percentage shares which were in the 20 to 25% range only 10 years ago.

c) The relatively small retail share of the remaining categories, the market stalls and

all other outlets, which in the main make up the other local sector. This contains many of the local retailers, the farm shops and speciality retail outlets (other than traditional butchers) selling meat. Although the share of such outlets is small, it has grown from a very small base, with the number of outlets growing and whose regional influence may be greater than the sales share indicates.


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Table 6. GB Retail Market Shares of Meat 52 weeks to February 2010 Beef GB % Total Multiples * 90.1 Total Butchers 8.1 Total Independents & Symbols 0.2 Market Stalls ** 0.6 All Other Outlets *** 1.0 Total 100.0 Lamb Total Multiples * 86.8 Total Butchers 10.9 Total Independents & Symbols 0.4 Market Stalls ** 0.9 All Other Outlets *** 1.0 Total 100.0 Pork Total Multiples * 90.5 Total Butchers 7.3 Total Independents & Symbols 0.3 Market Stalls ** 0.9 All Other Outlets *** 1.0 Total 100.0 Source: AHDB/Kantar Notes: * Multiples include, Tesco, Asda, Sainsbury, Morrisons, Co-operative, Iceland, Farm Foods (and other freezer centres), Waitrose/Ocado, Budgens, Liddl, Netto, Aldi, Marks and Spencer, plus other smaller regional supermarket chains (includes internet sale/delivered) ** Market stalls, include all types of ‘market’ outlet (including farmers markets) *** Includes farms shops, direct internet sale/box scheme (other than from main multiples), speciality shops etc In the past, many of the large supermarkets have stated that in future they wish to move to a position where all of their abattoir suppliers source direct from farms. The two main reasons often given for this position by supermarkets are typically to do with:

• Traceability – there is a growing demand for auditable systems of livestock production and processing that more clearly demonstrate the standards under which animals and meat are produced, and it is argued that the ‘deadweight system’ is better at achieving this.

• Animal Welfare – the experience of the livestock market – the loading and unloading, standing in pens with other unfamiliar animals – is seen by some people as distressing for the stock.

However, many observers are of the opinion that their position should really be seen within the context of their attitude to the supply of all other products, which is to shorten the supply chain, as it is believed that shorter, leaner, supply chains are more efficient and more efficient chains produce better value for the consumer.


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In reality, the supermarkets’ desire to reduce the length of the supply chain is as much about trying to remove cost from the system, usually to their advantage, than providing value to consumers. Within a supply chain scenario, some supermarkets see livestock markets as an unnecessary link in the chain. This is undoubtedly a key reason why many supermarkets are still keen to see an increase in deadweight selling. As far as traceability is concerned, with the introduction of the recording requirements of the GB Cattle Database and EID systems for sheep, if markets are well connected into this system, the developments go a long way to answering previous critics, and many auction markets are investing in better data capture systems to match the new systems of animal identification. At the same time, auction markets need to investigate ways in which the classification details of slaughtered animals can be obtained from livestock that have been sourced by abattoirs through the liveweight route so that this information, together with any animal health issues like the prevalence of liver fluke, can be passed back to producers. As regards animal welfare, all markets today have increased responsibilities in this area. In addition, it is a well-known fact within the industry that the direct deadweight route (i.e. from farm to abattoir) can in practice be anything but. The practice of multiple pick ups of livestock form various farms to make up a load, can significantly add to the transport mileage and the animal welfare issues. In addition in order to meet the need for efficient, cost effective livestock transport, many animals that are sold deadweight to abattoirs are first transported to a collection centre, where they are typically sorted and then loaded onto the larger livestock transporters. Such collection areas have to be licensed as assembly areas, some of which are at existing markets. As of June 2010, 49 were identified as being on a Defra Animal health Approved list in England and Wales. In order to facilitate the sale to supermarkets, which largely require livestock that have been produced and marketed through an approved assurance scheme such as the ABM Red Tractor Beef and Lamb, today virtually all livestock auction markets in England are assured through the livestock markets section of this scheme. Intelligence from ABM indicates that many non-market assembly centres are, however, still not approved under the ABM scheme. It is unfortunate and surprising given the more direct sale practices referred to above, that the RSPCA Freedom Foods assurance schemes do not approve of the use of livestock markets. Their standard for cattle and sheep T1.1 states that cattle and sheep – ‘must not be presented for sale at livestock markets’. The issue of the growth of deadweight selling and confidence about price transparency was alluded to in the previous section. Although as part of EU regulations, deadweight cattle prices based on classification results, using agreed dressing specifications, have to be reported by all abattoirs over a certain size, these are only what can be regarded as base prices. Similar to the quoted liveweight prices, what they mean for the true value of the animal can only be assessed after various deductions have been taken into account. For abattoirs, this can include, in addition to the statutory levy, deductions for veterinary and health inspections, contributions to the cost of the removal of some specified risk


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materials, contributions to transport, animal insurance, and unspecified marketing charges common in Scottish abattoirs and reputed to be one of the reasons why the quoted base Scottish deadweight cattle prices are usually higher than the equivalent cattle in England. The result is that it is not as straightforward as it may seem to make a comparison between what a quoted liveweight price and a quoted deadweight price may mean as regards the value of cattle, even if the factors used to convert between livewieght and deadweight were correct, unless there is perfect knowledge about the other deductions. But at least for the liveweight price, the producer knows that the prices have been set in ways that are very transparent, like through open outcry at a large number of markets, whereas they are more uncertain as to how the deadweight cattle price has been arrived at by each deadweight purchaser. For sheep, the situation is even less transparent as the price reporting to AHDB is only voluntary with currently only a few abattoirs participating, and there are no agreed standard dressing specifications.12

12 The problems that can be caused when prices and price formation are not as transparent as they could be, which is a problem for deadweight purchasing systems, can be seen in the ongoing heated debate that has been occuring between livestock producers in the USA and ‘meat packers’ for the last 20 years or so. As the market has become dominated by a small number of large meat packing companies, the lack of price transparency has resulted in many allegations of their anti-competitive behaviour. An article in the Economist June 26 2010 describes the latest moves in this debate under the heading ‘Slaughterhouse Rules’.


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The Influence of the Over Thirty Months Scheme (OTMS) For some livestock markets, the introduction of the OTMS following the 1996 BSE crisis, replaced the pre-1996 cull cow market business. The scheme replaced the live sale with dedicated cow collection centres and in doing so adjusted the income that markets gained from cull cattle sales. Livestock markets that were operating as a collection centre for such animals until the demise of the scheme in January 2006, managed all of the OTMS finances within a separate bank account to the main marketing activities. Following the demise of the scheme, as shown in Table 4, livestock markets have again become an important link in the cull cow supply chain as the cow beef business re-established itself. Those cattle born before August 1996 and still in existence are unlikely to ever be re-introduced into the normal market activities. The Requirements to Control the Bovine TB Crisis in The Cattle Industry In late 2005, Defra announced a range of measures to help combat the increasing occurrence of Bovine Tuberculosis in England, which were also mirrored in Wales and Scotland. The effect of the rules, which dictate that all cattle over 42 days of age moving to a market out of a one-to-two-yearly tested herd must have tested negative to TB within 60 days prior to movement, has complicated the gathering of cattle for sale and led to the development of so called ‘Green’ and ‘Red’ markets. In brief, the term Green Market generally applies to sales of store/finished cattle where all such stock have been pre-movement tested or are exempt from such (three or four year PTI). Producers must comply with the six-day standstill and cattle can be moved anywhere from such gatherings. An exempt Green Market provides the luxury of selling primestock without the need for a pre-movement test, e.g. Bakewell on a Monday and Chelford on a Thursday. Those which have not been tested can only travel to onward destinations such as slaughterhouses or to an approved or an exempt finishing unit, whereas those which are tested/exempt can go anywhere. Once again, the six-day standstill rule applies. Red Markets provide a platform for selling primestock negating the need for pre-movement testing and without producers worrying about the six-day standstill, which doesn’t apply. Cattle can only be onwardly consigned to slaughter from such sales and livestock may not return to the holding of origin. The Effect on Livestock Markets of Falling Abattoir Numbers Notwithstanding the increased trend towards deadweight selling of finished cattle, particularly following the closure of markets during the FMD crisis, livestock markets remain important in the sale of finished cattle and particularly sheep, purchased in the main by domestic abattoirs to serve both the domestic and the export markets.


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However, as the number of abattoirs has declined, the number of buyers has fallen, particularly as many of the larger abattoir companies that supply the large supermarkets have generally been reluctant to purchase livestock through auction markets, especially cattle. There were 267 abattoirs operating in Great Britain (that made AHDB levy returns) in 2008/09, compared with 416 10 years earlier. Some of these were very large single species plants but many were multi- species plants. In the cattle sector in Great Britain, eight companies operated 23 plants in 2010. AHDB levy data for 2008/09 shows that these plants accounted for 56.3% of total GB slaughterings. These companies were the main suppliers to the large supermarkets, the large food service suppliers, and most were also exporting. There was also a second major group of nine abattoir companies, each killing more than 25,000 cattle, who were significant suppliers to the larger secondary supermarkets and larger food service suppliers, but not main suppliers to the large supermarkets. These accounted for 16.5% of total GB cattle slaughterings in 2008/09 In the sheep sector in Great Britain, seven companies operated 17 plants in 2010, and were the main suppliers to the large supermarkets and large food service suppliers. Most of these plants also exported. AHDB levy data for 2008/09 shows that these plants accounted for 42.6% of total GB sheep slaughterings in 2008/09. In addition, in the sheep sector there was a second significant group of 10 abattoir companies, each killing more than 300,000 sheep, largely involved in supplying larger secondary supermarkets and large food service suppliers and/or the halal or export markets, but not main suppliers to the large supermarkets, that accounted for 28.5% of total GB sheep slaughterings in 2008/09. Of the remaining traditional retail butchers, estimated at fewer than 6,800 in 2009, fewer than 120 would also have small or medium-sized abattoirs that principally serviced their shop. Very few of the auction markets interviewed as part of this study still had regular customers from the traditional butchery trade (i.e. buying animals to kill or have killed in order to retail the meat in their shops).. Today many of the buyers for abattoirs, particularly for the larger ones still buying stock through auction markets, will also be representative agents often buying on more than one account, thus reducing further the number of actual buyers that may be around the ring at any time. It is sometimes feared that a decline in the number of buyers at auctions can affect the competitive process by reducing the confidence of vendors who may believe that lack of competition/demand results in lower prices, or even at the extreme fear of collusive behaviour in the form of buyer rings. There is no proof, or even any recent allegations, that this is major problem but the issue can reinforce the sellers thinking about using alternative methods, such as the deadweight route.


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There is also sometimes concern expressed by buyers, although not an issue raised by the auctioneers interviewed for the report, that the best stock in a particular catchment area are sold via the deadweight method, which therefore reduces the quality of the remaining stock at the market. Clearly if this is the case it could affect the overall market price for livestock, where as has been commented on earlier, deadweight buyers pay attention to the trend in livestock prices before setting their deadweight price for the coming week. While livestock prices were weak, such attitudes tended to feed on each other. However, the history of the livestock auction markets is that, on a rising market as we have seen in the past two years, livestock prices are more responsive to the changes in demand and supply than deadweight markets, in which it is often maintained that price schedules are set a week in arrears. As a result, this encourages producers to bring more and better quality animals for sale through livestock markets.


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6. Livestock Markets in England in 2010 The remaining number of livestock markets operational in England in 2010, are the result of the industry-led rationalisation that has taken place in recent years. However, during this time, the decline in the total number of livestock markets has also been accompanied by significant investment in many. This has particularly been the case for a core group of livestock markets particularly significant in the sale of finished livestock that are located in what could be regarded as key regional nodal points in the livestock production and market network. Many older town centre livestock market facilities have been relocated and rebuilt, some with the help up EU Grant Aid until the mid 1980s. Since then, any redevelopment has usually taken place financed by arrangements between various interested parties i.e. market operators, local authorities (many of whom such as those at Rugby, increasingly do not want to own and maintain a livestock market site) and developers. Such initiatives typically involve the redevelopment of old market sites for commercial use, with the livestock market moving to a new site, such as Ludlow. Figure 5 shows Bakewell market, which was relocated from its old town centre site to a new location, which provides better access and facilities for livestock buyers and sellers but for visitors still has good connections with the town.


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Without funding from such interested parties, the low level of profits from commission sales in recent years has meant that it is difficult to make a case for investment funded solely by private operators in new markets, particularly where this depends on funds borrowed at commercial rates of interest. It is also for the same reason hard for such private operators to justify major improvements in existing markets as a viable business proposition. However, this has not prevented groups of investors, often including potential farmer users coming together to finance development, based on the belief that a livestock market is essential of the agricultural health of the area, like at recent new market developments such as Sedgemoor, Cirencester and Rugby. The use of livestock markets as centres for the buying and selling of store and breeding animals, particularly cattle and sheep, continues although like finished stock numbers, these have fallen as the national herd and flock sizes have declined. In Great Britain during 2000, according to the LAA Annual Report, auction market throughputs of store and breeding cattle, sheep, pigs and calves stood at 7.1 million head, of which 5.4 million were sheep and 1.2 million were cattle. Table 7 shows store and breeding sales at markets in England in 2006, 2008 and 2009, which indicates that while cattle numbers have trended down sheep numbers have increased, reflecting the small growth in lowland finishing enterprises, while hill and upland breeding flocks have fallen. Table 7. Sales of Store and Breeding Livestock at Markets in England 2006 2008 2009 Store and breeding cattle

646,000 601,899 629,239

Store and breeding Sheep

1,608,000 1,775,914 1,812,926

Calves 202,000 171,695 181,598 Source: LAA The following sections look at the distribution and throughputs of livestock markets in the South West of England, the South East and Eastern England, the Midlands and the North of England. Analysing the information on throughputs available from the price reporting activity (prices reported to AHDB), a discrete group of markets stand out as being what could be regarded as core nodal sites within their region for the sale of finished cattle, or cull cattle, or finished sheep or cull sheep/ewes (with some markets being prominent for more than one species).


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In this analysis, core and nodal are defined in the sense that all of these markets: a) Sold in 2009 5,000 or more cattle, or 4,000 or more cull cows, or 45,000 or more sheep, or 15,000 or more ewes, with some falling into more than one of these categories. b) Are, it is believed regularly attracting buyers and sellers that come from outside of the region in which they are situated, with some having a truly national clientel The number and names of these in each region are shown in Table 8.


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Table 8. Number and Names of Core Nodal Markets (as defined) in Each Region Throughput per year **

Prime cattle 5,000 or more

Cull cattle 4,000 or more

Prime sheep 45,000 or more

Cull ewes 15,000 or more

South West number 1 2 3 3 Sedgemoor * Sedgemoor Sedgemoor Sedgemoor Frome South Molton South Molton Exeter Exeter South East & East

number 2 0 2 1 Ashford * Ashford Ashford Colchester Winslow/Foscote * Midlands number 10 3 13 10 Newark Newark Ludlow Ludlow Ludlow Market Drayton Market Drayton Market Drayton Market Drayton Bridgnorth Bridgnorth Bridgnorth Ross Ross Ross Bakewell * Bakewell Bakewell Bakewell Derby Oswestry Oswestry Oswestry Worcester * Worcester Worcester Melton Mowbray * Melton Mowbray Melton Mowbray Bishops Castle Hereford Hereford Kington Rugby Shrewsbury Shrewsbury North number 8 4 22 10 Carlisle Carlisle Carlisle Gisburn Gisburn Gisburn Gisburn Wigton Darlington Darlington Darlington Northallerton Northallerton Selby Thirsk Thirsk York * Chelford Beeston Castle Bentham Bentham Wooler Wooler Cockermouth Cockermouth Kendal Kendall Kirkby Stephen* Lancaster Leyburn


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Longtown Longtown Penrith Penrith Ulverston Acklington Acklington Hexham * Hexham Otley Skipton Barnard Castle Clitheroe Malton Source: AHDB/MLCSL Note * Markets interviewed as part of the study (plus Thrapston, Cirencester and Holsworthy) ** Not in order of throughput, plus, each market may also sell smaller numbers of livestock in each species category.

Table 9 shows the livestock throughputs by the main geographical areas in England identified in this report, for 72 markets that were price reporting in 2009 compared with the same markets in 2006. .


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Table 9. Combined market throughputs of finished and cull livestock at 72 auction markets in England, 2006 and 2009, by geographical area. Geographical areas

Prime cattle

Cull cows

Prime sheep

Cull Ewes

2006 2009 2006 2009 2006 2009 2006 2009 South West 36,430 25,117 18,893 25,816 294,235 328,933 132,486 118,370

South East and Eastern

15,919 14,051 1,065 2,081 174,970 262,495 52,305 61,582

East Midlands 55,532 45,882 3,872 15,350 243,846 352,972 69,945 86,744

West Midlands

92,297 68,220 5,874 22,701 834,109 1,070,603 206,877 261,123

North East 48,649 38,716 24,785 33,907 883,005 1,055,259 328,818 406,446

North West 111,179 88,312 7,915 16,496 828,637 1,146,673 211,093 231,944

Source. MLC/AHDB MI – price reporting markets Note – Data for Sedgemoor for 2006 is the combined throughputs of Highbridge and Taunton which it directly replaced . na = information was unavailable for the market for this year. Livestock Markets in South West England In 2010, there were 16 livestock markets identified as being operational in the South West, with one in each of the counties of Gloucestershire, Wiltshire and Dorset, three in Cornwall, three in Somerset and seven in Devon. A number of these, as shown in Table 9, share common operators. These are: Kivells, operate markets at Hallworthy, Holsworthy and Liskeard; Exmoor Farmers Livestock Auctions, operate markets at Cutcombe and Blackmoor Gate; Southern Counties Auctioneers, operate from Salisbury and Shaftesbury In addition there were 3 other centres that used to hold regular markets but are now used primarily for periodic specialist sales – Bristol/Avon and Chagford, or as a collection centre – Honiton.


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Table 10. Livestock Markets in the South West Location and site classification

Operator Ownership of site

Main regular market days

Main regular livestock sales

Blackmoor Gate Devon RS

Exmoor Farmers Livestock Auctions

Private Monday SS, E/R

Cirencester Gloucestershire RLM

Voyce Pullin Markets

Private Cotswold Agricultural Centre

Tuesday Wednesday

SC, C/B, DC C,S,P, SS, C/B Plt - m

Cutcombe Somerset RS

Exmoor Farmers Livestock Auctions

Private Wednesday SC, C/B, Clv alternating weeks SS, E/R Plt - m

Exeter Devon AB

Exeter Market Auctioneers

Local Authority The Matford Centre

Friday C, S P Periodically SC, SS, SP, DC

Frome Somerset RLM

Premier Livestock Auctions

Frome Agricultural Centre

Wednesday Friday

C,S, P, DC,C/B SC

Hallworthy Cornwall RS

Kivells Private Friday C,C/B,SC, S Plt - periodic

Hatherleigh Devon TC

Vicks Local Authority Monday Tuesday

S,SS, E/R Plt -m

Holsworthy Devon TC

Kivells Local Authority Wednesday Saturday

C,S, P SC,SS, DC – periodic ‘lifestyle market’ – P, Plt,- m

Liskeard Cornwall TC

Kivells Local Authority Thursday C,SC,S,SS,E/R

Newton Abbott Devon TC

Rendells Sawdye & Harris

Local Authority Wednesday Saturday

C, S Plt -f

Salisbury Wiltshire RLM

Southern Counties Auctioneers

Local Authority Tuesday Saturday

C, S, P, C/B, SC Plt


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Sedgemoor Somerset AB

Greenslade, Taylor, Hunt

Sedgemoor Auction Centre

Monday Tuesday Saturday

C, S, Clv E/R, S, C/B SC, SS, Clv P -f

Shaftesbury Dorset TC

Southern Counties Auctioneers

Local Authority Monday Thursday

C/B, Clv SC

South Molton Devon TC

Staggs Local Authority Thursday Sunday

C,S, C/B, E/R, SS Plt

Tavistock Devon TC

Ward & Chowen

Local Authority Tuesday - m C/B, SC, SS, Clv

Truro Cornwall RLM

Lodge & Thomas

Truro Livestock Centre

Wednesday C, S, C/B, DC, SC, Clv, S, SS, E/R

Source. Livestock Auctioneers Association/ Auctioneers Web sites/MLCSL Not included above are the markets at Honiton, Chagford and Bristol/Avon Notes (s) =seasonal; (f) =fortnightly; (m) = monthly. Most markets will also have periodic specialist sales Abbreviation Name Abbreviation Name C FINISHED CATTLE Clv CALVES S FINISHED SHEEP C/B COWS/BULLS P FINISHED PIGS E/R EWES/RAMS S/B SOWS/BOARS SC STORE/BREEDING CATTLE DC DAIRY CATTLE SS STORE/BREEDING SHEEP Plt POULTRY SP STORE/BREEDING PIGS Hs HORSES

Site classification: TC - Livestock markets in ‘traditional’ town centre sites. RS – Rural sites, with a basic market. RLM - Livestock markets that have moved in recent years from ‘traditional’ town centre sites to those on the edge of town, but only into new functional auction market facilities. AB- Livestock markets that have moved and are part of a large ‘agri–business’ complex.

The rationalisation in the live markets sector that has occurred in the South West in recent years, as across GB, is well illustrated by comparing the situation today with that described in a report produced on the ‘Future of Livestock Markets in the South West’ as recently as 2003. This identified some 27 livestock markets that were in regular operation at that time.


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The markets in the South West that are believed to have ceased operation, and or selling stock over the past 15 to 20 years, are as follows: St Austell Yeovil Highbridge Gloucester Taunton Sturminister Newton Bideford Chippenham Helston Andoverford Wadebridge Axminister Barnstaple Bridgewater However, rationalisation has not always led to closure and in recent years Highbridge and Taunton were both replaced by a new market at Sedgemoor, a new market was built to replace the older town centre site in Cirencester, and a new market is currently under construction to replace the old market at Cutcombe. In some market towns in the South West, the location of the market in the centre of the town has been a point of concern with local authority planners for a number of years. For example the livestock markets in South Molton and Holsworthy have been the subject of a number of studies to relocate them (the latest for Holsworthy in 2009/2010). The problem preventing such relocations, as in similar situations in other parts of the country, has usually been due to a combination of financial issues, particularly where the market site is owned by the local authority and leased to the market operator, and social reasons. The latter includes local disagreements as to what to do with the vacant site that would be released following the closure of the market, how to use the released value, and the opportunity and/or need to relocate the market and where its new location should be. Auction Market Throughputs of Finished Livestock in the South West All the markets selling finished livestock in the South West record their information through the AHDB MI (formerly MLC) Auction Market Price Recording Service, except for Blackmoor Gate, Cutcombe and Tavistock that mainly sell store and breeding stock. This data from 13 markets has been used to compare the throughputs of finished livestock of the major markets in the South West region, between 2006 and 2009 and is shown in Table 9. In addition, livestock markets remain very important for the sales of store cattle and sheep and breeding stock. A 2005 Defra report on autumn breeding sheep sales showed that there were three markets in the South West that were particularly important for these sales, which see large numbers of young breeding sheep from the hills sold to buyers from all over the country. These three sites at Blackmoor Gate, South Molton and the now-closed Andoversford market, had special licences that allowed them to extend their sales over a


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wider area on the site than that covered by the normal licence. In addition, some other markets in the South West participated in such seasonal sales from their normal site Whilst some breeding pigs are also sold through a number of auction markets in the South West, their importance in terms of volume is low. Nationally, the vast majority of producers now operate closed herds in an effort to reduce disease risk and improve herd health. Also with relatively large numbers of pigs to be marketed each week, the majority have adopted the direct-to-abattoir pig supply chain model. In recent years though, there has been an increasing interest in using a livestock market to sell pigs, although usually from smaller producers, particularly in the South West, from some of the many, lifestyle and hobby farmers who have purchased many smaller holdings in this region. Both Holsworthy and Sedgemoor, two markets visited as part of this study, reported an increasing interest in such pig sales, while pigs were also reported to be sold at Cirencester, Frome, Exeter and Salisbury. Throughput data of store stock is only collected from a small number of individual markets, and has therefore not been analysed on a regional basis. The Main Markets in the South West for Finished and Cull Livestock 2009 From the information used to derive Table 9, these were in order of size of throughput: Prime Cattle – Of the 12 markets selling prime cattle in 2009, Sedgemoor, Frome and Truro had the highest throughput, out of all the markets in the South West in 2009. but only Sedgemoor had a throughput of over 5,000 prime cattle in this year. Cull Cows – Of the 12 markets selling cull cows in 2009, Frome and Sedgemoor also had the highest throughput of cull cows, but no other markets sold more than 4,000 cull cows a year. Prime Sheep – Of the 12 markets selling prime sheep in 2009, Sedgemoor and South Molton had the highest throughputs, with Exeter the only other market that approached a throughput of 50,000 a year. Cull Ewes – Of the 11 markets selling ewes in 2009, Exeter, Sedgemoor and South Molton had the highest throughputs, all selling over 20,000 ewes a year.


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Livestock Markets in the South East and Eastern England In 2010, there were only seven livestock markets identified as still operating in the whole of the South East and Eastern England. Of these, five were in the South East of England, with Maidstone the only seasonal market, and two were located in the Eastern counties. The market at Norwich had been closed for a period, but at the time of the study, had been recently re-opened, operating on a fortnightly basis, although its future is uncertain. The markets at Thame and Winslow/Foscote, share a common operator in Thame Farmers Auction Mart, who also hold major seasonal sheep fairs at a site that used to be in Bicester, but is now located on the Thame show ground. Table 11. Livestock Markets in the South East and Eastern Engalnd Location and site classification


Main regular market days


Ashford Kent AB

Hobbs Parker

Private Tuesday Friday

C, S, C/B E/R, Clv, SS, SC, DC, Hs,P S -seasonal sales

Maidestone Kent RS

Lambert & Foster

Private Thursday s- SS,SC C/B periodic

Hailsham Sussex TC

South East Marts

Private Monday Wednesday

SC,SS C,S, E/R, P, Clv, DC

Thame Oxfordshire TC

Thame Farmers Auction Mart

Local Authority Wednesday Friday

C/B, C,S, E/R SC,SS, Clv, DC

Foscote – replaced Winslow Buckinghamshire RS

Thame Farmers Auction Mart

Private Monday C, S, SS, Sc ,

Colchester Essex RLM

Stanfords Local Authority Tuesday Saturday

C,S, E/R, SS,SC Hs -m Plt


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Norwich - status uncertain at time of finalising the report RLM

Norwich Livestock Market

Local Authority – web site now Says owned by farmers

Monday Saturday

f -C,S, SC, SS

Source. Livestock Auctioneers Association/ Auctioneers Web sites/MLCSL Notes (s) =seasonal; (f) =fortnightly; (m) = monthly. Most markets will also have periodic specialist sales Abbreviation Name Abbreviation Name C FINISHED CATTLE Clv CALVES S FINISHED SHEEP C/B COWS/BULLS P FINISHED PIGS E/R EWES/RAMS S/B SOWS/BOARS SC STORE/BREEDING CATTLE DC DAIRY CATTLE SS STORE/BREEDING SHEEP Plt POULTRY SP STORE/BREEDING PIGS Hs HORSES

Site classification: TC - Livestock markets in ‘traditional’ town centre sites . RS – Rural sites with a basic market. RLM - Livestock markets that have moved in recent years from ‘traditional’ town centre sites to those on the edge of town, but only into new functional auction market facilities. AB- Livestock markets that have moved and are part of a large ‘agri-business’ complex.

In the South East and Eastern England, the rationalisation in the number of livestock markets has in the past 15 to 20 years, has seen the closure of markets at: Haywards Heath Guildford Bury St Edmonds Banbury Heathfield Rye Kings Lynn Bicester Reading Canterbury Wickham Market Chelmsford More recently in the South East, there has been a change in the ownership/management of markets at Thame, Hailsham and Winslow. The latter market was recently closed and replaced by a facility at Foscote, near Buckingham. In Eastern England at the time this report was being written, Norwich City Council was in dispute with the former tenant of the livestock market and all markets from the site were suspended until matters are resolved between the parties. The Council was of the view that ‘it was thought unlikely the site will be reopened within six months - the condition of the market means a lot of work needs to be done if it is to be reopened’. As in other regions, rationalisation has not always led to closure and the old market at Ashford was replaced by a new livestock market and agri-business centre in 1999. A new location for the old market currently in the centre of Thame, has also been under discussion for some time, as has that at Hailsham.


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Auction Market Throughputs of Finished Livestock in the South East and East Five of the markets selling finished livestock in the South East and Eastern England record their information through the AHDB MI (formerly MLC) Auction Market Price Recording Service (Maidestone mainly sells store and breeding stock and Norwich is currently closed). This data has been used to compare the throughputs of finished livestock of the major markets in the South East and East in 2006 and 2009, and is shown in Table 9. In addition, most of these livestock markets remain very important for the sales of store cattle and sheep and breeding stock, although Colchester is today more important for finished cattle and sheep sales. The markets at Ashford and Hailsham also sold some pigs. The Main Markets in the South East and Eastern for Finished and Cull Livestock 2009 From the information used to derive Table 9, these were in order of size of throughput: Prime Cattle – Of the four markets selling prime cattle in 2009, Ashford and Colchester were the largest prime cattle markets, and these were the only markets with a throughput of more than 5,000 prime cattle a year in 2009. Cull Cows – Of the two markets selling cull cows in 2009, Ashford was the largest market, but it only sold just over 1,500 cull cows a year in 2009. Prime Sheep – Of the five markets selling prime sheep in 2009, Ashford was by far the largest market, which with Winslow/Foscote, were the markets selling more than 50,000 prime sheep in 2009. Cull Ewes – Of the five markets selling ewes in 2009, Ashford was by far the largest seller of cull ewes , and the only market with a throughput of more than 20,000 ewes in 2009.


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Livestock Markets in the Midlands In 2010, there were 20 livestock markets identified as being operational in the Midlands. Of these, seven were located in the East Midlands, with two in Derbyshire and Leicestershire and one in each of Lincolnshire, Nottinghamshire and Northamptonshire. There were 14 in the West Midlands, with six in Shropshire, three in Herefordshire, two in Warwickshire and one in both Staffordshire and Worcestershire. A number of the 20 livestock markets that are currently operational in the Midlands as shown in Table 12, share common operators, these are: McCartneys, operate markets at Ludlow, Worcester and Kington (as well as in Wales at Brecon, Knighton and a collection centre at Three Horseshoes). Henry H Bletsoe, operate from Thrapston and also recently have taken over the operation of the market at Stratford on Avon. Halls, operate mainly from Shrewsbury but also at Bishops Castle. Bagshaws, operate from Bakewell and also operate in partnership in the markets in Derby and Leek. In addition there was one other centre that used to hold regular markets but is now used primarily as a collection centre – Three Horseshoes. Table 12 Livestock Markets in the Midlands Location and site classification


Main regular Market days


East Midlands Bakewell Derbyshire AB

Bagshaws Local Authority Monday Other days

C, S, SC, SS, C/B,E/R, DC s, m – SS, SC

Derby Derbyshire TC

Derby Market Auctions: Bagshaws Eton & Hollis

Local Authority Tuesday Wednesday Saturday

C, S, SC, SS, , E/R, Clv, DC SC, SS, E/R , Clv, DC H, Plt

Market Harborough Leicestershire RS

E A Lane and Sons

Private Wednesday S, C, C/B, SC, s- E/R, SS


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Melton Mowbray Leicestershire TC

Melton Mowbray Market

Local Authority Tuesday,

C, S, P, SC, SS, C/B,E/R, DC s– SS, H

Louth Lincolnshire TC

Louth Market Auctioneers: Willsons, Masons

Local Authority Thursday C, S, P, SS, ,E/R f-SC, SP

Newark Nottinghamshire RLM

Newark Livestock Market ( Newark Cattle Market Co)

Private Wednesday C, S, P, E/R, C/B f- SS, SC,Clv

Thrapston Northamptonshire TC

Henry H Bletsoe & Son

Private Thursday Saturday

C,S, P, C/B,E/R SC,SS, s – SS, H

West Midlands Leek Staffordshire TC

Leek Auctions Ltd: Bagshaws; Daniel & Sons.

Local Authority Tuesday Saturday

C, S, C/B, E/R f- SC, SS, Plt

Bishop’s Castle Shropshire TC

Halls Local Authority Wednesday Thursday

S, E/R s- SC, Clv

Bridgenorth Shropshire RLM

Nock Deighton Agricultural


C, S, E/R SS,SC, Clv

Ludlow Shropshire RLM

McCartneys Private Monday also major seasonal sales

C, S, SS, SC, C/B, E/R

Market Drayton Shropshire RLM

Barbers Auctions LLP

Local Authority Wednesday

C, S, SS, SC, C/B, E/R, DC

Oswestry Shropshire RLM

Brereton & Daulby; Halls; Norman R

Private Wednesday

C, S, C/B, E/R, SC, SS s- Clv,


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Lloyd; Bowen Son & Watson

Shrewsbury Shropshire RLM

Shrewsbury Livestock Auctioneers (Halls)

Local Authority Tuesday Thursday

C, S, SC, SS, SP, E/R, C/B, Clv SS,C/B

Hereford Herefordshire TC

Hereford Market Auctioneers Ltd

Local Authority Wednesday

C, C/B, Clv f-S, P, SS, SP,S/B, E/R

Kington Herefordshire TC

McCartneys Private Tuesday Thursday

S, SC S,C/B, E/R

Ross on Wye Herefordshire RLM

Williams and Watkins Auctioneers

Private Monday Wednesday Thursday

S, SS, Clv f- C, DC, E/R, P C/B f- SC

Rugby Stoneleigh, Warwickshire RS

Rugby Farmers Mart LLP

Private Monday Friday

C, S, SC, SS. SP, E/R, C/B, H, Plt, Clv s- SS, SC

Stratford on Avon Warwickshire RLM

Henry H Bletsoe

Private Tuesday

f- C, S, SC, SS., E/R, C/B,

Worcester Worcestershire RLM

McCartneys Local Authority Wednesday Saturday - alternate

C,S, C/B, E/R SS, SC, DC s- SS

Source. Livestock Auctioneers Association/ Auctioneers Web sites/MLCSL Not included above is the market at Three Horseshoes Notes (s) =seasonal; (f) =fortnightly; (m) = monthly. Most markets will also have periodic specialist sales Abbreviation Name Abbreviation Name C FINISHED CATTLE Clv CALVES S FINISHED SHEEP C/B COWS/BULLS P FINISHED PIGS E/R EWES/RAMS S/B SOWS/BOARS SC STORE/BREEDING CATTLE DC DAIRY CATTLE SS STORE/BREEDING SHEEP Plt POULTRY SP STORE/BREEDING PIGS Hs HORSES

Site classification: TC - Livestock markets in ‘traditional’ town centre sites.


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RS – Rural sites with a basic market. RLM - Livestock markets that have moved in recent years from ‘traditional’ town centre sites to those on the edge of town, but only into new functional auction market facilities. AB- Livestock markets that have moved and are part of a large ‘agri-business’ complex.

As in other regions, there has been a steady rationalisation in the number live markets throughout the Midlands, which in the past 15 to 20 years has seen the closure of markets at: Ledbury Hope Northampton Craven Arms Uttoxeter Grantham Leominister Ashbourne Oakham Tenbury Wells Penkridge Stamford Kidderminister Lichfield The market at Henley-in-Arden has also ceased selling cattle, sheep and pigs but the site is still used as a local market centre and also to periodically sell horses and poultry (fur and feather). As in other parts of the country, the rationalisation over the period has been accompanied by investment, with for example Bakewell moving to its new out-of-town agri-business centre site in 1998. The market at Melton Mowbray was substantially re-developed at about the same time. Other markets that have moved from older town centre facilities to new sites involving major investment include those at Ludlow, Newark, Bridgnorth, Shrewsbury, Ross-on-Wye, Worcester and Market Drayton, while others moving on a tighter budget include those at Rugby (now on the old Stoneleigh showground), Stratford and Market Harborough. The markets at Thrapston and Hereford have been considering moves from their town centre location to new sites for a number of years, while the market at Louth is the subject of ongoing local debates about its location. The remaining markets in the Midlands which also occupy what could be termed as ‘traditional town centre sites, are those at Derby, Leek, Bishops Castle, and Kington, while Oswestry remains at it extensive site on the outskirts of the town. Auction Market Throughputs of Finished Livestock in the Midlands All the markets in the Midlands selling finished livestock record their information through the AHDB MI (formerly MLC) Auction Market Price Recording Service. This data has been used to compare the throughputs of finished livestock of the major markets in the Midlands, for prime cattle and sheep and cull cattle and ewes, and is shown in Table 9. In addition livestock markets remain very important for the sales of store cattle and sheep and breeding stock. The markets at Worcester, Bakewell, Thrapston and Melton Mowbray that were visited as part of this study maintained that only a few, mainly store and breeding pigs had been sold in recent years through their markets. Other markets reported as selling a small


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number of pigs were Louth and Newark in the East Midlands and Hereford and Ross in the West Midlands. The Main Markets in the Midlands for Finished and Cull Livestock 2009 From the information used to derive Table 9, these were in order of size of throughput: Prime Cattle – Of the 15 markets selling prime cattle in 2009, The markets with the highest throughput of cattle were those at Newark, Ludlow and Market Drayton, while seven others also sold more than 5,000 cattle a year. Cull Cows – Of the 13 markets selling cull cows in 2009, Market Drayton was the largest market for cull cows, together with Newark and Bakewell; no others sold more than 4,000 a year Prime Sheep – Of the 20 markets selling prime sheep in 2009, Oswestry was the largest market for prime sheep, followed by Ludlow and Melton Mowbray, but nine others also sold more than 50,000 prime sheep a year. Cull Ewes – Of the 20 markets selling cull ewes in 2009, Ludlow, Melton Mowbray and Oswestry sold the highest number of cull ewes, and three other markets also sold more than 20,000 cull ewes a year. Competition from Wales The markets near the Welsh border areas of the West Midlands also face significant competition for sheep from large markets in nearby Wales. Particularly from St Asaph and Ruthin, the also the large new market at Welshpool. With regard to prime cattle, only the markets at Ruthin and Mold, in North Wales, had throughputs of more than 5,000 cattle a year.


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Livestock Markets in the North of England In 2010 there were 37 livestock markets identified as being operational in the North of England. In the North East, there were 21 markets, with 10 located in North Yorkshire and two in West and one in East Yorkshire, four markets in Northumberland and four in County Durham (of which the markets at St Johns Chapel and Middleton, in Teesdale, are today mainly store markets). In the North West, there were 16 markets, of which 10 were located in Cumbria (with that at Lazonby being mainly a store market), four in Lancashire and two in Cheshire. A number of these livestock markets, shown in Table 13, shared common operators. These were: Harrison and Hetherington, that operated from Carlisle, Kirkby Stephen, Broughton in Furness, Lazonby and Middleton in Teesdale (also have an interest in markets in southern Scotland, at Lockerbie and Newcastleton). Hexham and Northern Marts, operate from Hexham and Scots Gap. North West Auctions, at Lancaster and Kendall. R Turner, at Gisburn and Bentham Table 13. Livestock Markets in the North of England Location and site classification


Main regular markets days


North East Acklington Northumberland RLM

North East Livestock Sales

Private Monday Thursday

E/R, SC C,S,C/B,E/R

Barnard Castle Co Durham TC

Barnard Castle and Teesdale Farmers Auction Mart Co

Private Tuesday Wednesday

s- SC,SS C,S,E/R,SS

Bentham Lancashire TC

Bentham and District Farmers Auction Mart Co Ltd;

Local Authority

Tuesday Wednesday Saturday

C/B, f-SC S,C, E/R,SS,DC s-SS


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(R Turner & Son)

Darlington Co Durham TC

Darlington Farmers Auction Co

Local Authority

Monday Thursday

SC,SS C,S

Hawes North Yorkshire TC

Hawes Farmers Auction Mart Co

Local Authority

Tuesday S, SS,E/R, Clv m-SC s- special sales on various days

Hexham Northumberland AB

Hexham and Northern Marts


C, S, m- E/R m-SS, SC

Hull/Dunswell East Yorkshire RS

Frank Hill and Son

Private Monday Saturday

C,S,P,C/B,E/R, f- S/B,SP, Clv m&s – H, Plt

Leyburn North Yorkshire TC

Leyburn Auction Mart Co: Stephen Walker &Co

Private Wednesday Friday

C,S,C/B,E/R SS,Clv s-SC,DC

Malton North Yorkshire TC

Malton Livestock Auctioneers; Boulton Cooper Ltd; Stephenson & Son


C,S,P, C/B, E/R, S/B SC,SS,SP,Clv,Plt

Middleton in Teesdale Co Durham TC

Harrison and Hetherington

Private Monday, Tuesday, Friday

s- SC, SS on various days

Northallerton North Yorkshire TC

Northallerton Auctions


C, S, P, C/B, E/R, S/B SC,SS,SP,Clv,DC

Holmfirth West Yorkshire TC

Holmfirth Attested Auction (AA) Market

Private Tuesday Thursday Saturday

C, S m- Plt Hs

Otley West Yorkshire

Wharfedale Farmers Auction Co

Private Monday Friday

C, S, P, C/B, E/R, S/B f- SC, Clv,DC


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TC Ruswarp, Whitby North Yorkshire TC

Richardson and Smith

Private Monday Wednesday

C, S, P, E/R, S/B C,E/R,C/B,SC,SS,SP s&m – Clv, DC,H

St Johns Chapel Co Durham RS

St Johns Chapel Auction Mart/ Harrison and Hetherington

Private Wednesday Friday Saturday

s- SS, SC on various days

Scots Gap, Morpeth Northumberland RS

Hexham and Northern Marts

Private Wednesday

S,E/R

Selby North Yorkshire RLM

Selby Livestock Auction Market

Private Wednesday Saturday

C, S, P, C/B, E/R, S/B SC, SS, SP, Clv, Plt

Skipton North Yorkshire AB

Craven Cattle Markets Ltd; Ta CCM Auctions

Private Monday Tuesday/Wednesday Thursday

C, S, P, E/R, Clv, DC s- SS,SC S, E/R

Thirsk North Yorkshire AB

Thirsk Farmers Auction Market

Private Monday Thursday

C/B C, S, P, E/R, S/B

Wooler Northumberland TC

John Swan & Sons

Private

Tuesday Wednesday

f- SC,SS C,S,C/B,E/R, s-SS

York North Yorkshire AB

Stephenson and Son; RM Edwards

Private

Monday Thursday Friday Saturday

S,C,P,C/B,E/R SC,SS,SP,Clv,DC m-H f-Plt

North West Chelford Cheshire TC

F.R Marshall Private

Monday Thursday

DC, Clv, SS, SC, SP, P,Plt C, S,C/B, E/R

Beeston Castle Cheshire TC

Wright Manley Private Tuesday Wednesday Thursday Friday

m- DC H f-DC C, SC, Plt, P

Claughton on Brock Lancashire RLM

Brockholes Arms Auction Mart Ltd


C, S, E/R, Sc, Clv C/B, Clv


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Broughton in Furness Cumbria TC


Private Monday Tuesdays

C, S, E/R m & s -SC, SS

Carlisle Cumbria AB


Private

Monday Wednesday Friday Saturday

S,C, C/B, E/R, SS SC,Clv ,m-DC m&s- SC, SS s- Plt

Clitheroe Lancashire RLM

Clitheroe Auction Mart Co Ltd

Private Monday Tuesday Friday

SS C,S,C/B, E/R, P f-SC,SS s-Plt

Cockermouth Cumbria RLM

Mitchells Auction Co

Private

Wednesday Friday

C,S,C/B, E/R s&f – SC,SS Clv,DC

Gisburn Lancashire TC

Gisburn Auction Market; (R Turner&Son)

Private Monday Thursday Saturday

C,S,C/B, E/R,SC C,S,C/B,E/R,SC,SS, P Clv , DC f-SC SS

Kendal Cumbria TC

North West Auctions Ltd

Private Tuesday Thursday

C,S, Clv f-SC,SS, P

Kirkby Stephen Cumbria TC


Private Monday Tuesday

SC S,E/R, SS s-sales on other days

Lancaster Lancashire RLM

North West Auctions Ltd

Private Monday Thursday Friday

C,S, E/R m- DC SC, Clv

Lazonby Cumbria TC


Private Monday, Thursday, Saturday

s- SS on various days

Longtown Cumbria TC

Cumberland and Dumfriesshire Farmers Mart PLC

Private Tuesday Thursday Saturday

S, SC f-SS C, S, C/B, E/R Clv


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Penrith Cumbria RLM

Penrith and District Farmers Mart LLP

Private Monday Tuesday Wednesday

C SS S

Ulverston Cumbria TC

Ulverston Auction Mart PLC

Private Tuesday C,S, C/B, E/R,SC,SS, Clv, DC

Wigton Cumbria TC

Hopes Auction Co Ltd

Private Monday Tuesday Thursday

m-SS C,S, E/R C/B,SS, Clv, DC

Source. Livestock Auctioneers Association/ Auctioneers Web sites/MLCSL Notes (s) =seasonal; (f) =fortnightly; (m) = monthly. Most markets will also have periodic specialist sales Abbreviation Name Abbreviation Name C FINISHED CATTLE Clv CALVES S FINISHED SHEEP C/B COWS/BULLS P FINISHED PIGS E/R EWES/RAMS S/B SOWS/BOARS SC STORE/BREEDING CATTLE DC DAIRY CATTLE SS STORE/BREEDING SHEEP Plt POULTRY SP STORE/BREEDING PIGS Hs HORSES

Site classification: TC – Livestock markets in ‘traditional’ town centre sites RS – Rural sites with a basic market. RLM – Livestock markets that have moved in recent years from ‘traditional’ town centre sites to those on the edge of town, but only into new functional auction market facilities. AB – Livestock markets that have moved and are part of a large ‘agri–business’ complex.

While the North of England has the highest number of operational markets in England, it has also seen a large number of market closures as the industry has rationalised over the past 15 to 20 years. These include markets that formerly operated at: Seamer Tow Law Tyneside Preston Guisborough Ponteland Sedbergh Crewe Stokesley Rothbury Penistone Congleton Pickering Bishop Aukland Driffield Chester Reston Bellingham Haslingden Ripon Wetherby Bingley Masham Other old markets, such as that at Pateley Bridge, have seen their throughputs fall to virtually zero. As in other parts of the country, this rationalisation has also been accompanied by significant investment. In 1971, York market moved from a location near the walls of the old town to what was one of the first out of town agri-business centres. Other markets, such as Hexham in 1995, have followed this trend and re-located to new purpose-built sites or invested heavily in existing sites, these include markets such as Skipton, Thirsk,


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Cockermouth, Wooler, Carlise, Penrith, Acklington, Selby, Clitheroe, Lancaster, Longtown, Bentham and, to a lesser extent, Ruswarp and Hull/Dunswell. Markets that are also known to be considering planning to relocating are those at Darlington and Wigton, while as with some markets in other parts of the country there is an ongoing local debate about the future of the markets at Kendal and Malton. Of the other markets in the North of England, most are in traditional town centre sites or on older established sites, such as Hawes, Barnard Castle, Middleton, Otley, St Johns Chapel, Scots Gap and Leyburn in the North East and Kirkby Stephen, Broughton, Chelford, Beeston Castle, Gisburn, Ulverston and Lazonby in the North West. Auction Market Throughputs of Finished Livestock in the North of England All the markets in the North of England selling finished livestock record their information through the AHDB MI (formerly MLC) Auction Market Price Recording Service, except for Middleton in Teesdale and St Johns Chapel, which mainly sell store and breeding stock. This data has been used to compare the throughputs of finished livestock of the major markets in the North of England, and is shown in Table 9. In addition, livestock markets remain very important for the sales of store cattle and sheep and breeding stock. The 2005 report on the autumn breeding sheep sales (referred to earlier), showed that there were seven markets in the North of England at that time that were granted special licences that allowed them to extend their sales over a wider area on the site than that covered by the normal licence. Of these markets, two were in the North West at Kirkby Stephen and Lazonby, and five were in the North East at Barnard Castle, Bentham, Hawes, Middleton in Teesdale and Tow Law (now closed). These markets, other than the latter, remain particularly important for these sales that see large numbers of young breeding sheep from the hills sold to buyers from all over the country. Many other markets in the North also participated in such seasonal sales from their normal sites. The North of England also has more markets that sell finished and cull pigs than in other parts of the country. While the numbers are not large from the perspective of the total number of pigs that are produced, they provide an important service for the smaller producers in particular. The main markets that sold a regular number of finished pigs and cull sows in 2009, were those at Selby, York, Chelford, Hull/Dunswell and Otley, but others also reported small sales of store and breeding pigs and periodically finished pigs, these were Malton, Northallerton, Ruswarp, Skipton, Thirsk, Beeston Castle, Clithero, Gisburn and Kendall.


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The Main Markets in the North of England for Finished and Cull Livestock 2009 From the information used to derive Table 9, these were, in order of size of throughput: Prime Cattle – Of the 27 markets selling prime cattle in 2009, the markets with the highest throughput of prime cattle in the North of England were those at Thirsk, Darlington and Selby, with York also selling more than 10,000 cattle a year. In addition, there were four other markets that sold more than 5,000 cattle a year. Cull Cows – Of the 26 markets selling cull cows in 2009, Beeston Castle was the largest market for cull cows, followed by Carlisle and Chelford. Together with Gisburn, these were the only markets in the North that sold more than 4,000 cull cows a year. Prime Sheep – Of the 32 markets selling prime sheep in 2009, Longtown, Bentham and Penrith had the highest throughputs of prime sheep, with Carlisle, Acklington, Darlington, and Skipton also selling more than 100,000 sheep a year. In addition, 12 other markets also sold more than 50,000 sheep a year. Cull Ewes – Of the 30 markets selling cull ewes in 2009, Longtown was by far the largest seller of cull ewes, but Penrith, Bentham, Acklington also sold more than 40,000, together with two other markets selling more than 20,000 cull ewes a year. Competition from Scotland The markets near the Scottish border face limited competition for cattle and sheep from three markets in Scotland. These were the markets at Newton St Boswell, and to a lesser extent Lockerbie and Dumfries.


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7. The Compliance Pressures on Livestock Auction Markets Due to animal health scares and related problems, all places where livestock are gathered together (defined in legislation as ‘animal gathering areas’), and where livestock are handled, have been faced with an increase in regulatory standards and compliance inspections. This has impacted on livestock auction markets in a number of ways, but particularly as regards issues relating to animal welfare, with bio security and the prevention of the spread of disease in animals also being key issues. Legislation for Animal Welfare The overall requirements for animal welfare are currently set out in: The Animal Welfare Act 2006 (for details go to http://www.opsi.gov.uk/acts/acts2006/pdf/ukpga_20060045_en.pdf) The Act states that animal owners, keepers and those with temporary responsibility (market operators and staff) have a duty of care to ensure animals are protected at all times. They must have a suitable environment and diet, and be able to exhibit normal behaviour. They must also be protected from pain, injury, suffering and disease and be housed according to their specific needs. This applies at all times, including during transport and while at markets and shows. The market owner and operator are responsible for the animals at the market and penalties for not carrying out this duty range from fines to imprisonment. There is also specific legislation covering the welfare of animals at markets and gatherings and during transport, set out below in the sub sections on Market Operations and Transport, but also covered by: The Welfare of Animals at Markets Order (1990) and its amendments. (for details go to - www.opsi.gov.uk/si/si1990/Uksi_19902628_en_1.htm) The original Order placed greater emphasis on the market’s responsibility for animal welfare, as regards to the number of animals per pen, handling, the separation of species and treatment of unfit arrivals. It was the sections on animal welfare in this Order and in particular, the ‘Protection of animals from injury or unnecessary suffering’ as stated in paragraph six, which were or most relevance:

• No person shall cause or permit any injury or unnecessary suffering to an animal in a market

• Without prejudice to the generality of the paragraph above, it shall be the duty of

the person in charge of an animal in a market to ensure that the animal is not, or is not likely to be, caused any injury or unnecessary suffering by reason of:


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The animal being exposed to the weather; Inadequate ventilation being available for the animal; The animal being hit or prodded by any instrument or other thing; or Any other cause.

This resulted in all new markets having to be covered. The main headings in the amended legislation set out below indicate the main topics that are now covered:

Interpretation Scope Unfit animals and animals likely to give birth Protection of animals from injury or unnecessary suffering Handling and tying of animals Control of animals Obstruction and annoyance of animals Penning and caging of animals Feeding and watering of animals Provision of lighting and bedding Covered accommodation Restrictions on the sale of calves Additional duties of market authorities Accommodation for unfit animals Detention and treatment of unfit animals Marking of animals Ramps Offences Local authority to enforce Order

Market Operations The main legislation under which markets operate is contained within the Animal Gatherings Orders, which defines animal gatherings as an occasion at which animals are brought together for:

• A sale, show or exhibition; • Onward consignment within Great Britain for the further rearing, finishing or

slaughter; • Inspection to confirm the animals possess specific breed characteristics.

They require that the premises must have an agreed standard operating procedure and be licensed by a veterinary inspector. The licence must be in writing, detailing the name of the licensee, the premises in which the gathering will take place and the specific areas to which animals may be given access. If the premises are to be used more once every 27 days, the Order states that the animal area must be paved with cement, concrete, asphalt or other hard, impermeable material that is capable of being effectively cleansed and disinfected. It also states that cleaning must not begin until all animals have been removed from the area.


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The Orders also require that the licensee must ensure that all feeding stuffs to which animals have had access, and all bedding, excreta, other material of animal origin and other contaminants derived from animals in the animal area are, as soon as possible and before animals are allowed to enter the licensed premises again:

• Destroyed; • Treated so as to remove the risk of transmission of disease; or • Disposed of so that animals do not have access to it.

However, in practice, the issue of bio-security of is a matter of interpretation by, previously, the Defra veterinary officer responsible, and now by Defra Animal Health division. Key issues covered in the Order include:

• That floors and surfaces can be adequately cleaned and disinfected; • That penning can be adequately cleaned and disinfected and is in a good state of

repair so as not to damage animals; • Those adequate washing/disinfection facilities are available for staff and visitors; • That there is a lorry wash with drainage suitable to handle straw and excreta

without blockage; • That the drainage for all wash downs (and the effluent) does not present a further

environmental (bio-security) hazard – also depends on local requirements for effluent disposal.

All of these requirements result in the need for additional investment. Many older markets find it difficult to meet them without major re-building and development. The main implication of the new Orders introduced since the FMD crisis has been to increase the operational costs of markets. The main headings in the 2010 legislation set out below indicate the main topics that are now covered: Animal Gatherings Order 2010 No. 460 (for details go to - www.opsi.gov.uk/si/si2010/uksi_20100460_en_1) The main headings in the amended legislation set out below indicate the main topics that are now covered:

Interpretation Notices and licences Exceptions The use of premises for animal gatherings Restriction for 27 days between animal gatherings Exemption from the 27-day restriction for licensed premises with any paved animal area Destruction, treatment or disposal of feeding stuffs and other materials Admittance of animals only for a period of up to 48 hours Requirement to notify and publicise the times for bringing animals to animal gatherings Dedicated slaughter sales and dedicated slaughter collections Restrictions following an animal gathering Enforcement Revocation and transitional arrangement for existing licences


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Transport The main headings in the 2010 legislation set out below indicate the main topics that are now covered: The Welfare of Animals (Transport) Order (England) Order 2006 (for details go to - www.opsi.gov.uk/si/si2006/uksi_20063260_en.pdf)

Similar legislation applies in Scotland and Wales.

PART 1 Introduction 1. Title, commencement and application 2. Interpretation 3. Extension of definition of “animals” and “poultry” PART 2 Transport of Animals 4. General provision on the protection of animals during transport 5. Transport 6. Transporters 7. Roll-on-roll-off vessels 8. Organisers 9. Keepers 10. Assembly centres 11. Control posts PART 3 Derogations for means of transport by road on journeys under 12 hours 12. Application 13. Derogation from inspection and approval 14. Derogation from requirement for continuous access to water 15. Derogation from insulated roof requirement 16. Derogation from temperature requirements 17. Derogation from ventilation system requirement 18. Derogation from temperature monitoring requirements 19. Derogation from navigation system requirement PART 4 Approvals 20. The competent authority 21. Approvals, authorisations etc 22. Suspension, revocation of approvals etc 23. Representations to an appointed person PART 5 Miscellaneous 24. Powers of inspectors 25. Compliance with notices 26. Production of plans 27. Obstruction 28. Offences by bodies corporate 29. Enforcement 30. Amendments 31. Revocations


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The Transport of Animals (Cleansing and Disinfection) (England)(no 3) Order 2003 (for details go to the web address - www.opsi.gov.uk/si/si2003/20031724.htm) Similar legislation applies in Scotland and Wales.

Title, commencement, application and extension of definition Interpretation Cleansing and disinfection in relation to the transport of hoofed animals and poultry Cleansing and disinfection in relation to the transport of other mammals and birds, and hoofed animals and poultry in certain circumstances Cleansing and disinfection in relation to the transport of horses Drivers' cabs Disposal of material after cleansing Means of transport leaving a slaughterhouse or sale premises Powers of inspectors, etc. Enforcemen Revocations and amendments Journey made within a single farming enterprise Journeys between the same two points Journeys to and from livestock shows not in the course of a single day Temporary unloading Level of cleansing and disinfection Parts of the means of transport required to be cleansed Method of cleansing Method of disinfection

Welfare Strategy In 1998, the Government launched the Strategy for the Protection of Animal Welfare at Livestock Markets. The aim was to improve welfare standards at markets and it was developed after consultation with a number of interested bodies so that it would be jointly owned and implemented.

The main aims of the strategy were to:

• clarify the division of responsibilities in the market;

• encourage market operators to appoint market welfare officers;

• emphasise the value of the codes of practice;

• provide action points for addressing the most pressing welfare issues;

• promote good communication between all people with an interest in markets;

• monitor welfare standards so that points of concern can be identified rapidly and

dealt with appropriately.

Many of the operations and procedures set out in the strategy have proved to be very successful and have been adopted by many markets. Some of the original legislation referred to in the strategy had been revoked and replaced with new legislation (see above).


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The Defra Animal Health division carries out welfare assessments of each market and these visits help to ensure the standards are maintained and applied evenly across the country. Monitoring in this way enables them to assess if certain problems are becoming less (or more) frequent and also alert then to any new problems. Any problems identified are brought to the attention of the market operator and to the local authority, as the responsible enforcement agency.

The legislation concerning auction markets and gatherings also forms an important part of the Governments Animal and Welfare Strategy for Great Britain.

The Animal Health and Welfare Strategy for Great Britain is the route map for work to improve the health and welfare of kept animals in England, Scotland and Wales. It is a Strategy for all who have a role to play - Government, the food and farming industry, vets, consumer groups and many others. It covers animals kept for pleasure or profit - pets, livestock, game and wildlife where it impacts on kept animals. The Strategy’s aim is to: “develop a new partnership in which we can make a lasting and continuous improvement in the health and welfare of kept animals while protecting society, the economy, and the environment from the effect of animal disease”.

It sets out a vision for animal health and welfare in Great Britain, showing where we want to be in 2014. This is a strong challenge for everyone involved and the Strategy contains important guiding principles, showing what needs to be done to create the world described in the vision.

taken from DEFRA website - http://www.defra.gov.uk/foodfarm/policy/animalhealth/index.htm

The welfare improvements and requirements resulting from the new legislation often result in the need for additional expenditure, but many older markets find it difficult to meet the requirements without major re-building and development. This, together with the operational changes resulting from the FMD crisis, has also increased the operational costs of markets.


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8. The Challenges and Opportunities Facing Livestock Markets The challenges and opportunities facing livestock markets are assessed in this section through a PESTLE analysis. This sets out an overview of what are the general political, economic, social, technological, legislative and environmental issues facing the meat and livestock industry at the beginning of the 2010 decade, and considers how these issues in turn may affect livestock markets and how markets could respond. The main issues are summarised under relevant PESTLE sub headings and then the key points arising from them as they relate to livestock markets are set out. Political Political factors can be wide-ranging and subtle. Change in government or changes in policy can have important consequences both for individual businesses and for whole sectors of the economy, a recent case in point being the change in attitude of the 2010 coalition government towards regional development, with the closure of the regional development agencies and the reduction in funding for the development of regional food initiatives. 1. Changes to Agricultural Policy

The cattle and sheep sectors have faced a difficult period since 2006, adjusting to

a new subsidy structure as a result of the reform of the Common Agricultural Policy (CAP). With no direct enterprise subsidies, producers in each sector are focusing more on the financial performance of their enterprises. Possible further changes to the CAP post the 2013 EU review may create further difficulties, for instance a limitation of Single Farm Payment (SFP) by size of holding, while other EU states/regions could continue coupled payments on, for example, suckler cows and ewes, such as the current Scottish calf premium.

The proposed reform of rules governing international trade and potential global

competition was put on hold following the collapse of World Trade Organisation reforms – The Doha Development Round – in July 2008. Since then, with the economic recession in large parts of the world, the threat to the UK livestock industry of further opening EU markets to greater competition has receded. Indeed with renewed concern over food security, which had seemed to be off the government agenda since the 1980s, the problem has shifted to one of maintaining the existing livestock industry to meet national, and international, need for protein foods.

For the forseeable future in the UK, the economy measures being taken by the

coalition government in 2010 mean that any opportunities for UK agriculture that come about due to policy devlopments in other areas will have to be carried out against a background of significant cuts in public services, regional infrastructure and support grants.


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2. Agriculture in Great Britain (GB)/United Kingdom (UK)/European Union (EU)/World Context

Livestock markets work within a livestock and meat-processing supply chain that, particularly among the larger companies supplying the large supermarkets and food service suppliers, is structurally configured to work on a European, even international, basis.

There is also increasing globalisation, which has a fundamental impact on the food production and supply in the red meat industry through increased competition from imports, as well as opportunities for exports.

Although beef, sheep and pig production in the EU as a whole has fallen, the

expectation that supplies from other world producers will also remain tight for the foreseeable future means that there is an opportunity for GB farmers to increase production to meet unfilled demand.

However, the increased world demand for limited fossil fuel supplies will become

more of an issue, as there is an increasing focus on energy usage and greenhouse gas/climate change issues.

3. Environmental Policy Issues

The agricultural and food industry as a whole has to adjust to an increasing EU demand for low input, low environmental impact farming and food production. Legislation through EU and UK policies aimed at reducing Greenhouse Gas, (GHG) emissions to meet climate change targets, will have a direct impact on the industry.

The industry however also has to cope with seemingly diverse objectives and pressures from Government bodies and non-government organisations (NGOs), some of which for example see a reduction in the intensity of grazing, and also a reduction in meat eating, as potential social and environmental objectives

4. Food Safety/ Legislation/ Labelling

Animal disease continues to pose a challenge to the red meat industry, impacting on demand for products and farm-gate profits, such as Bovine Spongiform Encephalopathy (BSE), Foot and Mouth Disease (FMD), Escherichia Coli (E Coli), Postweaning Multisystemic Wasting Syndrome (PMWS), Bluetongue Virus (BTV), Bovine Tuberculosis (bTB), Avian Flu, Lyme Disease etc.

Many of the measures associated with dealing with these diseases affect the operation of livestock markets and the livestock marketing system, for instance


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from the continuation of the six-day standstill rule to the provision of lorry wash and disinfection arrangements, from bi-security arrangements to the enhanced traceability requirements.

Demand for red meat products and farmgate profits are also affected directly by

food safety scares, which lead to calls for official controls like nutrition ‘traffic lights’ on food products, a ban on producing beef mince from carcases hung for more than six days, greater emphasis on food safety and reducing disease incidence from such zoonotic infections as campylobacteriosis (the most commonly reported infection in the EU, particularly associated with raw poultry meat but also found in pigs and cattle), salmonella (the second most reported infection, most frequently found in poultry and pig meat), listeria, Q fever, and Escherichia coli (VTEC). All these result in enhanced concern over the state of the live animal as it is presented for sale (e.g. emphasis on the clean livestock policy)..

All of these issues have led to an increasing demand for labelling (to inform on

origin, nutrition, environmentally friendly, animal welfare friendly, etc.), and food education, which impacts upon the meat industry.

Key points for the development of livestock markets:

• There will be a continuing need to invest in and develop the market sector to ensure that existing facilities and operations are in a good working condition, particularly in relation to livestock handling and animal welfare. New markets have to be built to ever higher standards, while there are site specific problems for some older markets e.g. it may be necessary to have certain penning covered, paved areas need to be in good condition to enable them to be sanitised and old penning will need to be replaced.

• They will have to cope with the challenges or be seen to be working with the industry to improve carbon footprints, not only for the market site but also for the liveweight marketing transport supply chain. .This will involve working more closely with environmental organisations where relevant and defending the role of auction markets within the livestock supply chain at all levels, from breeding to store to finishing. It will also encompass minimising the greater environmental pressure on existing facilities and on requirements for new markets by taking into account and/or dealing with issues such as water treatment, effluent disposal and water run-off.

• Markets will have to continue to be aware of the local problems that can build up around sites, like traffic congestion and urban/industry park spread, which are now beginning to affect some markets which were re-located from town centres.


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Economic Economic factors affect both the purchasing power of customers and the type of products and services they are willing to buy. They also shape the structure of the industry that provides these services. 1. Business Improvement

Taken as a whole, meat production and red meat production in particular, has historically had a record of poor profitability. As a result of the disease outbreaks and their affect on consumer confidence and farmgate prices, the industry has faced a difficult period, which led some to question at what size the industry is sustainable. However, recent relatively large increases in farmgate prices and steady increases in retail prices have not led to massive falls in consumption, which gives hope that the industry is more sustainable than some perhaps anticipated.

By 2007/08, the profitability problems in the industry were being further

exacerbated by rising costs, including compliance costs, rising cost of energy and raw materials, as well as feed and forage, pesticides/herbicides, fertiliser, etc. These eased off somewhat by mid-2009, but the cattle, sheep, pig and poultry industry are still fragile, , because of the long period of poor profitability... Despite recent increases in producer prices, increasing input costs, from such as rising feed prices, were beginning by 2010 to erode the slender profits.

The industry has always been, and will continue to be, affected by short-term and

long-term cyclical forces, like weather/climate, disease and economic issues. By and large, the state intervention mechanisms that were introduced to combat these have been withdrawn under successive Common Agricultural Policy (CAP) reforms and not replaced with global measures. Replacement measures may be being considered post-2013, in line with new concerns over food security.

Currency fluctuations within the EU zone in particular can cause problems and

opportunities. The devaluation of Sterling to the Euro in recent years has been a boost for UK exporters and increased the cost of imports.

Profitability and economic boom/bust cycles mean that unless business

improvement is achieved, profitability will be limited and the industry will remain fragile and subject to immense national and international market pressures. For producers, there is a continued need to engage in business improvement activities, including benchmarking and developing best practice on improving farm management, yields, farm processes and lowering input costs.

Differentiation is seen to offer an important solution in helping to revive the

industry, which it is hoped will improve margins and develop a more sophisticated trade. This provides opportunities for quality products, which ultimately aims to increase demand and secure market share but is not always about improved price.


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The dominance of the main multiple retailer companies in control of the retail sales of meat in the UK remains a challenge for other parts of the supply chain. Whether the continued decline in traditional butchers can be replaced by increases in the activities of new agents, such as farm shops and direct sale by farmers, will be an important determinant of the shape the non-supermarket and large foodservice part of the supply-chain and its practices in the future.

A major issue is the extent to which the domestic consumer is prepared to pay

premiums particularly for beef and lamb which are already seen as a premium product. Can the increase in livestock prices be eventually passed on in the same proportions to consumers, without demand falling?

Pressures on abattoirs will continue to lead to large and small company

rationalisation, which could reduce the potential number of buyers at livestock markets.

2. Competition

There are increasing opportunities in the export market as a result of globalisation and EU expansion which will increase the need for the export abattoirs to source livestock.

There are also increasing challenges in coping with the import competition from

countries such as New Zealand, Denmark, and (until recently) Brazil, and understanding the threats and opportunities posed by the new Eastern European dimension of the EU, including Romania and Bulgaria.

The various meats will continue to be in competition with each other and will all vie

to maintain market share, but perhaps in the face of increased messages to consumers to cut down on overall meat consumption, from a health (i.e. concern over diet, diet related illnesses and obesity) and environmental perspective.

Due to the reduced national flock and therefore reduced prime lamb numbers

many of the abattoirs that try to source all their lambs direct off farms have been forced to return to the live market to fulfil their supply contracts. In a normal year markets would possibly see their buyers during the late hogget season and early lamb season, but it is reported that in 2010 such buyers have been active in the markets all year.

3. Supply chain

The supply-chain for beef and lamb is long and populated by many agents. Improving supply chain efficiency is a long-term goal. This issue is closely linked to business improvement. However, various sectors of the chain have different needs – some could improve by operating in more ‘inked supply chain type models, in


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others business is better suited to the trading model. Within both scenarios, livestock markets have a role.

Differences in market power at various points in the supply-chain, for instance

large supermarkets compared to producers, with few large and many smaller players, lead to wide variations in margins. This makes it difficult to introduce supply chain improvements through collaboration, like the debate over dressing specifications in the cattle and sheep sectors.

The Competition Commission is considering whether features of the groceries

market prevent, restrict or distort competition. Provisional conclusions suggest that action is needed to improve competition in a number of local markets and to address relationships between retailers and their suppliers. The industry therefore must address this challenge to ensure open competition in the future.

. The different pressures on livestock producers and the meat sector makes

forecasting the changes to size of the industry very difficult. Previous AHDB forecasts indicated a slow but steady decline in the dairy and beef suckler breeding herds from 2008 to 2013, and a concurrent slow but steady fall in finished cattle slaughtering over this period. However, the sustained prevalence of the higher livestock prices seen over the last few years may change producer attitudes. Finished cattle slaughtering have increased in 2010, particularly of black and white young bulls but cull cattle slaughtering has also increased. The 2010 June census indicated that cattle numbers had stabilised, while sheep and pig numbers continued to fall, with sheep slaughtering in 2010 declining by over 10%. However, some recovery in the pig sector is expected, but depends very much in the movement in feed prices which in late 2010 were looking unfavourable to the livestock farmer.

Key points for the development of livestock markets:

• Some supermarkets and their main abattoir suppliers may continue to try and phase livestock markets out of the primary procurement chain for livestock, encouraging farmers to enter into direct selling agreements with the abattoirs, unless they can be better persuaded of the need for them in the system. Markets need to respond to the pressures to improve supply chain efficiency by proactively demonstrating why they are needed.

• Probable continued reduction in the number of smaller buyers for finished stock e.g. local butchers, small/medium abattoirs as their numbers decline.

• Possible fall in the overall number of commercial cattle farmers bringing large volumes of stock to each sale day and the increasing trend towards the presence of large specialist finishing units, may benefit the deadweight system, but there is likely to be a continuance of the need by such specialist farmers to use the livestock market as a back-up marketing mechanism. In addition these larger feeders may need markets even more to more efficiently source their store cattle from than sourcing directly off farms.

• Possible fall in the number of commercial sheep farmers, but with a growing export market there may be a greater willingness for the large export abattoirs to


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continue to source from livestock markets that attract large volumes of sheep, as these abattoirs are not constrained by the policies of the large supermarkets about sourcing from auction markets.

• Possible greater volume of small lots e.g. from part-time and hobby farmers. • Markets need to respond to the trend for greater differentiation e.g. become part

of local product supply groups, such as in the East Midlands, the Lincolnshire Quality Beef and Lamb schemes relationship with Newark and Louth markets.

• Undertake more special sales such as breed society sales (although there are, of course, only a limited number of these sales available to find), or non-livestock sales, and work to maintain status of the store market.

• Keep up to speed with the developments of farm ownership and livestock supply in their catchments area – review marketing/PR activity.

• As key centres within the local agricultural network, livestock markets are well placed to help producers develop business improvement activities, like working with the EBLEX Better Returns Programme. This in turn will help build stronger links with local farmers and the opportunity to secure the sale of their stock.

• Market finances are tight and issues of taxation, such as rateable value and the lack of benefit from agricultural rate relief, as well as other costs need to taken into account when setting market fees.

• Markets could investigate incentive schemes to encourage stock to the market, such as a reduced commission rate based on animals traded through the market or, where appropriate, linked to discounts for professional work such as SFP scheme form completion.

• Markets need to keep costs under control, investing wisely in techniques and technology that can reduce labour costs in particular.

Social 1. Demand Drivers The meat supply chain as a whole needs to better understand the changing patterns of, and trends in, consumer demand. For example, the market for meat in recent years has become more segmented with demand drivers like taste, packaging/portion sizes, tenderness and colour, increasingly influencing purchases. The consumer is also looking for convenience in preparation, hence the expansion in more processed products both in red meat, white meat and game. These trends are reflected in the demand for animals that produce carcases that more easily meet these requirements.

However, whilst there is an increasing demand for local/niche/premium produce, there remains a core demand for convenient, cheap food, and these different markets and market requirements are of importance to the industry in the future.

Local food procurement is increasingly of interest to consumers, (partially as a

result of the linked climate change concerns re ‘food miles’), whether buying food for consumption in the home or out of the home from the private and public food service sector.


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There are also increasing consumer concerns about food safety, health and

nutrition, which the red meat industry needs to respond effectively to. Food safety is increasingly influencing consumer choice, as a result of food scares, like E-coli, salmonella and listeria, and disease outbreaks, such as BSE, FMD and BTV.

These demand drivers and concerns over production are increasingly leading to demand for produce that demonstrates specific attributes, like quality, animal welfare friendly or environmentally friendly. This requires the sector to focus on what real differentiation attributes brands can be based upon other than geographic, e.g. systems of production - extensive production, organic, quality mark etc. At the same time, paying for such additions through seeking premiums and added value may be difficult in some sectors, for instance as prices rise, beef and lamb are already seen by some consumers as premium foods, before any further attempts at differentiation are made, which are often aimed at adding even higher premiums.

Animal welfare is a major concern to consumers, and raised as an issue by some assurance schemes that question the animal welfare profile of presenting livestock at livestock markets.

The industry must consider how it is best able to provide food sustainability in the

future as demand for (e.g. differentiated) food increases, increased volumes of imports that also meet these attributes may also be the result. The industry needs to consider how it can best respond.

2. Demography/Society

With an ageing population in the domestic market, future opportunities exist in educating the next generation on the benefits of consuming red meat and the nature of the production and marketing system that produces it.

The industry needs to consider how it will respond to society issues such as

obesity, food intolerances and disease issues, and be in a position to combat any negative attitudes, such as suggested links between consumption of processed meat and the incidence of cancer, and address consumer concerns and lack of trust in the science that may affect their view of the red meat industry and meat eating, like attitudes to genetic modification and disease control. Consumer demands need to be addressed and ensure the product is fit for purpose.

Traditional demand for red meat has faced enormous changes as society has

experienced increases in disposable income, reductions in time availability and skills in cooking, plus changes to the make-up of the family unit, and attitudes to food. Those providing livestock, as well as those selling meat, must adapt to these changes.


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Increasing globalisation has also impacted on the sector, as alternative foods have entered the market place. This provides an ongoing challenge to the industry but also opens up new opportunities in supplying the increasing migrant population with domestically produced meat. Opportunities also exist in the export markets for both carcase and offal products.

Recent indications that the UK population is growing faster than expected may

offer increased or even new opportunities (e.g. Eastern European immigrants have a taste for dried/ cured meat products and also offal products, while Muslims require halal meats of a better provenance).

The predicted flattening in the growth curve of the world’s population in the long-

term (but steady growth in the medium-term), accompanied by increasing wealth in what were previously undeveloped sectors of the world economy, will continue to bring both food scarcity and/or fair food prices onto the social and political agenda. This creates both opportunities and challenges for the industry.

As a result of recent difficulties in the industry, and the downward pressure on

producer incomes, there was expected to be a loss of small/medium commercial livestock producers in the red meat industry, leaving little middle ground between the large commercial producers and lifestyle/hobby farmers.

3. Labour

There is increasingly an ageing labour force in agriculture and other sectors of the meat supply chain, like traditional retail butchers, and an increasing problem of encouraging new entrants into both farming and the food industry in general.

Difficulties in encouraging younger people into careers in the industry are

increasingly leading to a skills shortage (referred to by Lantra recently as a developing skills crisis), at both the artisanal and the managerial level. This creates both opportunities and challenges for the industry in the future. In recent years, the increased migration from new EU member states partially addressed the challenge of obtaining skilled staff in the industry, but with this falling off, it raises concerns over the future of the current skills base and the need for succession planning. It also creates a problem in delivering relevant training.

Key points for the development of livestock markets

• Markets should be seen, and should position themselves, as an integral part of the local marketing system. They are particularly important for small/medium size producers selling smaller batches of finished stock, and for all producers in the sale and purchase of store stock. They should also consider how they can better target the sale of animals for different markets.

• By their nature, markets could help the livestock industry to better re-connect with consumers, and help explain why in the face of varied challenges, they are an important part of an industry that is essential to the well-being of the consumer.


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• Markets need to address the concerns of some assurance schemes about the presentation of livestock at live markets and ensure that this anti market attitude does not spread.

• Markets need to increase the attractions for visitors, other than buyers and sellers of livestock, to come to the market site. If possible, they could utilise the market site or car park for other related activities (i.e. it may be difficult to justify the investment in a site if it is only used one day a week).

• Markets offer a valuable social and commercial networking focus for farmers. They should consider maximising essential services, particularly at out-of-town sites. For example, some markets have a chaplain in residence on market days, others have a nurse operating a drop-in clinic, while some have a barbers shop.

• Attracting/finding staff that understand livestock is proving more difficult. In the future, livestock markets may have to work more closely with local networks of farmers and colleges that offer agricultural training to better prime the market for such staff.

• Create closer links to the local Young Farmers network to attract them to use the markets. This could include sections for them in the Christmas Prime Stock Show, or run ongoing competitions throughout the year to try and ensure regular custom.

• Consider offering a trainee auctioneer programme. Candidates are likely to have strong links with local young farmers.

• Younger farmers may have limited experience of livestock markets, particularly if they remained at the farm working whilst an elder representative took stock in. Create opportunities to inform new, particularly young, clients of how markets operate to try and avoid the deadweight option becoming the preferred method of sale.

• In general markets should strive to demonstrate their value better. It is a marketing system that has stood the test of time, is transparent, open and fair that creates competition and more often than not determines the overall market price. It allows buyers the opportunity to select the animals they want and leave those that they don’t, which in turn means that a greater percentage of their purchases should “hit the spec” of their clients.

Technological Technological developments affect competitiveness across the food chain. 1. New Technology and Research and Development (R&D) Issues

How the industry uses IT rather than just coping with it (such as with the electronic Identification of livestock) remains an issue in the industry which needs to be addressed to provide producers with the tools to improve efficiency and adhere to legislative requirements.

There is a need to raise awareness of the advantages of using technology to

improve business profitability, and networks of best practice are required to share R&D with the industry, and could form the basis of livestock improvement projects.


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The industry needs to also consider better means to link the producer to the

consumer, and remove suspicion from the supply chain. (e.g. improve the liveweight and deadweight selling systems)

There will be increasing opportunities to improve plant and animal breeding with

the use of genomics and the industry needs to consider its response to this. 2. Need for Better Knowledge Transfer

There is an ongoing need to improve efficiency of production to reduce costs and improve performance at an individual animal and enterprise level, by improving livestock performance efficiency, reducing inputs and maximising outputs for the same costs. The industry needs to consider opportunities for the future and how to better harness existing strengths (perhaps through closer collaboration).

There is also a need to improve the ability of livestock producers to produce

consistent animals of the required specification.

Opportunities exist in improving eating quality of red meat by utilising standard best practice, as well as further research and development into new techniques.

Producers must increasingly demonstrate due diligence in production and highlight

the animal health and welfare advantages of their production systems.

The industry is increasingly being required to feed back data and information through the supply chain, and improvements in this supply chain communication will provide opportunities for the industry in the future.

3. Disease Control

Trade of meat products at a UK level is influenced by a number of factors, many of which are outside of the control of those in the supply chain, especially disease outbreaks and food scares. Improving the ability of the industry to better cope with outbreaks of disease such as FMD, Bovine Tuberculosis (bTB), BTV, etc., will assist in ensuring a long-term future for the sector.

There is a need for research and planning, and accompanying knowledge transfer

to maintain competitiveness, and to ensure the industry is in a position to respond to food borne infections (e.g. e-coli, salmonella, listeria, etc.).


• Markets need to creatively use modern techniques like (e.g. ICT - EID readers and data capture), but without them taking over the essence of a market, which is to bring buyers and sellers together to enable the better exchange of a unique product i.e. a live animal.. The new techniques adopted need to improve the


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capability of livestock markets to be an integral part of the mainstream livestock supply chain.

• Such systems need to be linked into the back office requirements within markets. • Utilise new ICT to improve the efficiency of back office activity. • Act as vectors for the knowledge transfer that needs to accompany research and

development • Improve the liveweight selling system, with better displays of information in the

sales ring and at other points around the market. Use CCTV and digital video systems to better display sales and livestock and improve the feedback of information from buyers of livestock to farmers.

• The electronic marketing of livestock was once seen as a major potential threat,13 yet despite the opportunities that such as the impact of the FMD crisis created with the closure of markets, the initiatives introduced were not a success and it is today seen as less of a threat. However, this is not to say that this will remain the case. As technology improves and the cost of hardware falls, while broadband coverage grows, new initiatives may arise. The onus is on auctioneers continuing to demonstrate the advantage to buyers and sellers of actually being physically close to the live animals being traded.

Legislative 1. Complying with Regulations

There is a need to comply with regulations, which can be burdensome to the industry. As a whole, the industry is ill-equipped to cope with the high number of regulations, and requires assistance. For example, recent legislation about animal identification and traceability (e.g. EID in sheep,) and related supply chain traceability requirements – Food Chain Information, (FCI) part of the 2004 harmonised EU Food Hygiene Regulations. Today there are many areas that concern farmers and the wider industry, ranging from water management and soil conservation, to waste disposal, pollution prevention, fallen stock, animal by-products, food labelling, animal welfare, hygiene, food safety and transport. which All require communication and assistance to comply with.

Most producers do not have legal expertise in this area, particularly with regard to

horizon scanning of new regulations, or taking a pre-emptive approach to EU proposals.

Complying with regulations has implications for agriculture, the related food

processing industries, and the waste they produce. Some examples include UK Climate Change Bill 2007 proposals, Climate Change Levy, Integrated Pollution Prevention Control – IPPC, Hazardous Waste, Water Framework Directive and its implementation through regional River Basin Management Plans and the

13 For a description of the main initiatives, see L Grega and D Ray ‘Electronic marketing of livestock in the UK’ . Farm Management 1992. Vol 8, No 3.


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interlocking policy around it, Urban Waste Water Directive, ‘daughter directives’ on groundwater and priority substances and the related landfill Directive, and Soil Framework Directive.

In a post-CAP reform era, how producers react to market signals, when they are

being encouraged to join environmental schemes with prescriptive stocking rates, is a challenge the industry are increasingly facing

2. Regulation Development and Minimising Requirements

There is general discontent regarding the level of regulation imposed on the industry (which is partly a cultural and attitudinal issue), and, as a result, implementing changes can be difficult.

The cost of complying with measures, such as animal movement control and

tagging, are borne by producers with no option of passing them up the supply chain or to consumers. Meanwhile, abattoirs have a record of passing such costs back down the chain. Not only is there a physical cost, but there is also a labour and administrative cost.

Many view the quantity of control and paperwork to be out of proportion to the

end result. Key points for the development of livestock markets

• Markets need to develop their role as key centres of the local agricultural network to help producers cope with burdensome legislative requirements.

• This could be achieved by offering a more holistic marketing service to producers, enabling them to more easily cope with issues such as movement records, food chain information, EID requirements, and extending the work that many of the companies or divisions related to auction markets do through their professional services sections.

Environmental 1. Climate Change

The issue of GHG emissions from agriculture is increasingly becoming an issue,

specifically methane emissions.

The future impact on agricultural activities by global warming is also a consideration for the industry, e.g. changing opportunities for plant growth, creating opportunities and challenges for the future.

There is a rapidly increasing interest amongst some consumers and in certain

Government bodies, in producing food that is carbon neutral. This provides both a challenge and opportunity for the sector. Red meat needs to better quantify its


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carbon footprint and consider options for neutralisation. This could be the next demand the large supermarkets place on their suppliers.

2. Bio-diversity

In the past, the intensity of grazing has been seen as an issue with the general public and with Government, with regard to maintaining a diversity of bird and insect life on grazed land. There are therefore both challenges for the sector to cope with this issue, but also opportunities as grazing animals provide an important means to conserve large areas of the countryside. The issue of managing agriculture’s dual role in growing food and in protecting and developing specific environments is of vital importance. This issue also raises an important issue with regard to the industry effectively competing in both the domestic and export markets, as a critical mass of stock needs to be maintained.

There are also challenges of cross compliance within the SFP regime, and

opportunities of locking into additional environmental payments.

Furthermore, once the environmental objectives are largely met, it is expected that environmental support for producers will reduce and potentially leave the industry struggling to regain a production focus in the future.

3. Water and Waste Disposal

Water itself is not a big concern for the production sector. The cattle and sheep

sector relies primarily on grazing, and watering/irrigation is not generally required, with the exception of drinking water and to combat uncharacteristic drought periods. However, water remains an issue for the intensive production units, as well as the livestock markets, abattoir and processing sector, and waste disposal is increasingly an issue for all producers and the processing sector.

Disposal of water, refuse, fallen stock, and offal and by products. is increasingly an

issue the industry needs to consider, as is water pollution.

New proposals concerning water management require consideration, in particular coping with the Water Framework Directive and related legislation. Nitrate Vulnerable Zones (NVZs) also pose a threat for arable farmers and for the disposal of animal manures, whilst the Farm Waste Directives and Integrated Pollution Prevention Control (IPPC) will affect all agricultural sectors.

There is also an impending challenge in land use, as increasingly flooding

incidences are experienced across Great Britain and future uses of land will rise in importance in the future.

4. Energy

Any rises in energy costs have an impact on the whole supply chain. However

producers are not impacted to the same extent. Live markets are not affected to


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the same extent as abattoirs and processors, who also currently operate with small margins, so an increase in energy prices can have a significant effect.

The increasing demand for energy and alternative methods to produce it provides

an opportunity for some producers, via growing biomass, or crops for bio fuels, devoting land for wind/solar power generation etc. These may have an impact on future livestock farming.

There is expected to be an increasing demand for bio-fuels in the future, including

energy from bio-digester sources, which raises both challenges and opportunities for the livestock and meat industry.

5. Land pressures

Because of their relatively large site footprint and the traffic that they generate,

livestock markets are susceptible to planning pressures. This is the reason why many of those remaining have moved out of town centre sites. In parts of the country like the South East, the high site values (when related to the relatively low income generation capabilities of livestock markets), have contributed significantly to the reduction in the number of livestock markets.


• As well as livestock market sites having to become more environmentally friendly and reduce their carbon footprint and waste emissions, there will also be challenges to reduce the marketing carbon footprint).

• Contrary to the view of some that markets involve animals in more ‘food mile’ journeys, or are an inefficient way of livestock distribution, emphasise their key role in store and breeding stock sales and in the finished market in matching buyers to sellers given the variability of livestock weight/classification.

• Be aware of the pressures caused by location and how these may change.


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9. The Future for Livestock Markets in the Next Decade Despite almost two decades beset with problems, livestock markets have survived as a means of buying and selling store and finished livestock, albeit with a rationalisation in their number. If they are to survive and prosper in the next decade, they need to continue to maintain, as in the past, the support of the local farming community. In particular, all markets need to develop a much closer rapport with the younger members of this community. First and foremost, farmers need to be confident that that they will get a fair price for stock sold through the market. At the same time, farmers must continue to regard the market as being a key hub in the local agricultural network, a place where they can meet other farmers and discuss and get help with farming problems and associated matters. In order to help retain this confidence and support, markets need to continue to attract both buyers and sellers to the market by maintaining or improving the attraction of the market site, ensuring good road connections and adequate parking, that service buildings are suitable for purpose and have good facilities that, where appropriate, utilise new technology. To be able to continue to do this, the market site and the activities on it need to generate an adequate turnover, from a cost base that will deliver a profit margin that will allow for reinvestment. In order to retain and improve turnover, individual markets can compete both locally and regionally with other forms of marketing. However, on a national basis they are dependent upon the fortunes of the livestock industry, which is outside of their control. The fortunes of the livestock industry will continue to remain subject to both periodic and cyclical national and international economic forces, as well as to other more unpredictable ones, such as disease outbreaks. In order to compensate for the fluctuations in turnover from livestock sales that will inevitably arise because of these forces, markets need to continue to diversify and improve their income from other sources (e.g. from such as agricultural machinery and other associated sales, as well as demand for their professional services), making optimum use of the site.

Following the major disease problems in the previous decades, bio-security and the safeguarding of animal (and human) health will remain major compliance issues, as will animal welfare. As a result, pressure to invest to upgrade older facilities in order to achieve higher standards will continue and the capital costs of building replacement market facilities will inevitably rise.

In addition, the next decade is already shaping up as one where meeting environmental requirements will be a major consideration (e.g. from saving energy, using less water, disposing of waste, and organising the market activities so that the overall carbon


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footprint of the activity is reduced), and will require further attention to existing practices and greater investment.

In some of the older, smaller markets, which may today be less well located as urban development has progressed, the ability to generate income from higher livestock sales or from diversified sources may be limited. Such markets may also have high running costs, particularly as regards effluent disposal, maintenance and greater bio-security measures that further erode profit margins.

In such cases, even with continued farmer loyalty and the operator using the market as a contact point for selling other profitable agricultural services, with regards to pure mart operations, the market may struggle to trade at break even or worse. Where such marts are in areas of low stock numbers the problem is compounded. As a result, further rationalisation can be expected.

Other markets, particularly many of those located at core nodal points, with good road communications and that are large enough to benefit from economies of scale, can be expected to survive, even to prosper, particularly if livestock prices remain relatively strong, despite having to meet new challenges.

CMP. MLCSL. 30.11. 2010

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