Real Estate Alliance

Livestock Marts - the Future

This is an area of the auctioneering profession which very few practitioners will encounter during their career, yet it is has been an integral part of the farming community since the demise of the “fair days” in the 40’s & 50’s. From people dealing on the side of the road for cattle, horses, sheep or pigs the progress of time resulted in this business and social event being transferred to purpose built facilities where the auctioneer became a very important intermediary. This was a huge change for the farming community at the time but one which they adapted to and have prospered with through the years, but what does the future hold?

The environment has changed substantial since the 1970’s and 1980’s in this sector with rising cost and declining profitability major factors. One can visit any mart in the country and see that there are very few young farmers participating and this is substantiated by the fact that there are fewer farmers in Ireland than ever before. Many farmers are now taking animals direct from calf to slaughter, cutting out any buying and selling. There are also an increasing number of on-farm sales taking place for direct export to the continent which again is cutting out the mart sector. It is also envisaged that livestock numbers will decline into the future with the advent of increased direct payments under the new single farm payment basing more emphasis on the area farmed rather than the number of livestock produced. There have been changes in technology over the years from a paper based tracking system to a fully computerised tracking system which will be fully online in 2007. At present all animals are monitored through the CMMS (Cattle Movement Monitoring System) by the Department of Agriculture which is uploaded to their system at the end of each sale. It will become fully online in 2007 whereby animals are entered on the morning of a sale the CMMS data will be instantly uploaded to the Department as will all sale information as it happens throughout the day of sale. Waste treatment is another important factor; gone are the days when cattle lorries travelled the roads with a slurry trail behind them or farmers leaving a mart without washing out their trailers. The washing facilities in any mart is one of the busier places on sale days as it is compulsory to clean all cattle transport vehicles before leaving a mart premises.

Marts in this country are divided into two categories; privately owned marts and co-operative run marts. There have been a large number of closures in both sectors as the value of the asset held is often enormous compared to the profitability of the operation being run, with numerous marts occupying large town centre sites which are ripe for re-development.

It is therefore imperative that marts look to diversify their business into other sectors. One can look to the continent and the U.K. where there are large commercial parks operated by the livestock mart co-operative/company and below are a few examples of how this can be done successfully.

The Netherlands:

Livestock markets in the Netherlands have made considerable progress with diversified activities. Leiden, Zwolle, and Den Bosch, account for over 50% of all livestock sold in the Netherlands. However, their sales in livestock now account for less than 25% of their total business activities.

The type of event activities carried out include:

• Trade shows
• Concerts
• Exhibition and fairs
• Sporting
• Car parking

In the case of Leiden, the market premises are in use 300 days of the year. In addition, most of the business profits come from non-livestock events. 

Scotland:

In Scotland, the co-operative based Aberdeen & Northern Marts Groups (i.e. ANM) has transformed its business profile in the past twenty years. Previously it had been a dedicated livestock auction business, with a total of seventeen sales centres in the North East of Scotland. Now with a new Headquarters and Agricultural Centre in Thainstone (outside Aberdeen), the co-operative, apart from rationalising its livestock activity, operates a range of non-livestock activities.

• Property sales
• Estate management
• Motor and machinery sales
• Quota sales and auctions
• Electronic selling of timber, oil and equipment etc.
• Quality catering and functions
• Furniture sales

Some notable features of ANM are:

• Strong management team,
• In-house training programmes,
• Total usage of premises on non-sales days (e.g. car boot sales on Sundays),
• All trading activities and servicing are geared to the quality end of the market.

In the recent years an increasing proportion of ANM’s total operations are in non-livestock activities (i.e. 40/50%), while at the same time increasing overall employment in the Group. However, the sale of livestock remains the core service activity.

England:

In the South East of England, the auctioneering firm of Hobbs and Parker based in Kent, opened a new market complex in April 1998. The new development built on a total of 44 acres outside Ashford is a diverse business complex with a total of 25 office and retailing premises. The various buildings, including salesrings, cover a total roofed area of 15 acres.

Diverse Activities Operated by Hobbs and Parker include:

• Livestock sales
• Farms, lands and estates
• House and saddlery sales
• Professional valuations
• Quota agency work
• Car auctions
• Antique and furniture sales
• Offices and retail Units for rental
• Farm financing agency
• Commercial catering
• Country house transactions.

Each of the divisions is operated as a separate profit centre in Hobbs and Parker, with responsibility clearly delegated to an appropriate partner who heads up the profit centre.

(ICOS Ltd. - A STRATEGY FOR THE DEVELOPMENT OF CO-OPERATIVE MARTS, Nov. 2000)

It is quite clear that changes will have to be made by all mart entities into the future if they are to survive and prosper and if these changes are made a very successful enterprise can be maintained. Economies of scale are going to be ever more important factors with a decline in numbers forecast for both livestock & farmers within the industry resulting in diversification being the only solution for many operators.

On a personal note I find that the livestock mart industry is an exciting and very different workplace compared to the more common activities of an auctioneer in todays world. It is both challenging and enjoyable with new tasks and obstacles to be overcome just like any other business.

James Lee, Real Estate Alliance, Newport, Co Tipperary