July 29, 2008

Nails in the Coffin of NZ's Saleyards

I’ve predicted the demise of NZ saleyards for some time, thinking that animal welfare and effluent issues would be the triggers for change. I was wrong, and didn’t predict that the final nail in the coffin of saleyard auctions would be the price of oil.

It’s a big enough shock to fill the family car, but a chat to a truck operator recently at a local sale confirmed that bigger changes were coming. His truck could go through 700 litres of diesel before afternoon tea, and price fluctuations were making it very difficult to quote on per-animal-carried due to variation in journey length, as it’s cheaper to run a truck on a long trip than a lot of small ones. The rise in road user charges has also hiked costs.

What’s making this worse is that with the demise of smaller saleyards in the back country and concentrating action at the larger ones, livestock have to travel much greater distances in a truck to be sold.

So this whole saleyard exercise makes less and less sense, to sell stock in small pens, with an auctioneer giving them a 30-second blessing, before knocking them down to a small group of buyers who seem to value the social aspects of saleyards as much as the opportunity to do business. The saleyards have been part of New Zealand’s social history in the past where rural folk met with a legitimate excuse to get off the farm.

It was interesting to read the recent concerns of Andre de Haan, the NZ Federated Farmers‘ Meat and Fibre Producers’ Section over the PGGWrighton’s buy into Silver Fern Farms. He was worried about this business expansion resulting in more stock ending up on trucks en route to saleyards, instead of going direct to the meat works. He argued that this would not be a good idea for future efficiency.

The costs of running a Stock and Station business with agents on the road must be going through the roof, so their commissions must rise as they will not be selling more stock to cope with their rising costs. Seeing 4-6 agents and stockmen from a stock company chasing sheep and cattle around at saleyards is part of the 19th Century. It’s out of date for both animals and humans.

Then the last nail in the coffin will be the NAIT requirements. To comply with these “National Animal & Tracing” protocols for cattle (and deer), each saleyard will have to install RFID (Radio Frequency Identification) readers on their premises.

The best option for saleyards will be panel readers that automatically record RFID tags as animals move past them, preferably in a quiet single file and not a stampede. They are about $NZ7500 each. Light hand-held readers for use on farms cost $NZ300 but would be no use at a saleyard, other than for reading the odd beast that missed the main reader. Fixed wand readers for automatic recording similar to plate readers cost around $NZ2000 each but would not be appropriate.

There will clearly be a need for some new tech-savvy stock agents and good new facilities at saleyards. At big saleyards you may need more than one panel reader. I doubt it stock companies being squeezed by rising costs will be keen on this.

Then there’s the handling of data from the reader via the Company into the National Database. Predicted costs for the associated software for premises to link readers to computer systems are estimated to be from $NZ20,000 to $NZ30,000 per site. You can bet your stock stick that these will be underestimates!

So selling on the Internet has to take a giant leap forward I reckon thanks to those with the world’s oil. I dare not suggest this any more to my old stock agent mate. He once dragged me by the ear to a pen of skinny yearlings at the local sale, roaring for the whole yard to hear. “How the blardy ‘ell could YOU describe these little shitty starved baarstaards for your blardy fancy computer then?”

I didn’t dare tell him that what he’d just bellowed in my ear was a perfect description, and I’d add would be details of their liveweight, any animal health treatments (if they’d been lucky to get any), a paddock photo of them, and a large head and shoulders of their proud vendor who mysteriously must have been too busy to come along to the sale while the struggling auctioneer was begging somebody to give him an opening bid!

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