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Livestock auctions

Introduction

A calendar auction auction is held on the same place /auction pens on a weekly, monthly, quarterly or even yearly basis by an agent who advertises the auction in a calendar. The venue for the auction would have been selected and developed over years and its mere survival shows that there is a need for such an auction. The sellers and buyers at the calendar auction can vary according what is on offer and what are the needs of both seller and buyer. The auctioneer, marketing officer, accountant, roll clerk and labourers facilitate the auction and their versatility enables them to even conduct real estate auctions.

  • The marketing officer will source the livestock for the auction, receive it at the auction pens, classify the animals in lots preferred by buyers and he and the auctioneer will source buyers to attend the auction.
  • The accountant will see to the financial administration — all statutory requirements as well as collecting payments and financing of buyers, and payment of sellers.
  • The roll clerk will keep accurate records of what is sold, by whom, price of animals and who is the buyer.
  • The labourers will identify the animals and load them on trucks to be delivered at the buyers place.

A special auction is an auction requested by a seller or sellers to sell some their livestock or a seller could sell of his livestock, farms etc. It could be a dispersal sale if the seller stops farming.

At a stud auction animals of special breeding qualities are for sale. The auctioneer, seller/sellers will work closely with a breed society who will select the animals according to their standards for such an auction. The auctioneer conducting this auction is a specialised stud auctioneer. The Stud Breeders’ Manual includes an in-depth look at animal and performance recording, the principles of marketing purebred livestock. Visit https://studbook.co.za or call 051 410 0900 for more information.

At game auctions game is either sold in a open auction or on catalogue. Special arrangements are needed to transport game and auction pens and handling facilities must be according to specifications. All auctions are attended by NSPCA personnel to make sure animals are being handled humanely and facilities meet specified criteria.

A private treaty is where a marketing officer/agent facilitates a transaction directly between a seller and buyer of livestock. The transaction is well documented.

 

Farmers can also, of course, sell their animals at guaranteed prices to abattoirs, feedlots etc. with the help of an agent or not. The buyer becomes the owner of the animal. Contract slaughtering refers to animals that are being slaughtered and the farmer is being paid on a kg carcass basis. The 5th quarter (the skin etc) covers the slaughtering fees.

 

The role players in livestock marketing

 

  • Agents – they facilitate transactions between sellers and buyers on a professional basis.
  • Sellers – primary and secondary producers Buyers – abattoirs, trade, feedlots, speculators
  • Financers (usually banks)

The livestock market and related value chain is the single biggest industry in Agriculture in SA. All the role players in the value chain add value and enable survival of the industry.

Livestock Auction (AMT, 2019)

National strategy and government contact

Agricultural Products Agents Council (APAC) www.apacweb.org.za Agents in South Africa must register with APAC in terms of the Agricultural Products Agents Act (Act 12 of 1992 as amended). The biosecurity rules for livestock agents as set out by APAC came into effect on 13 November 2020 as published in the Government Gazette.

Department of Agriculture, Land Reform and Rural Development (DALRRD) Directorate: Marketing www.dalrrd.gov.za Auctions are included in the discussion on marketing of livestock in Training Paper No. 7 of the very useful Agricultural Marketing Extension series. Find this at www.dalrrd.gov.za. On the same website, see The Livestock Auctioneering Process, part of the small-scale farmer marketing series.

There are two South African National Standards, SANS 1469:2014 Humane handling and facilities for the protection of livestock at shows, auction sales, vending sites and livestock pounds and SANS 1488:2014 Humane transportation of livestock by road which have been published to protect livestock during transport and whilst at livestock auctions. These two Standards are read together with the Animals Protection Act, 71 of 1962 and any other relevant national legislation. The Standards are available from the South African Bureau of Standards, at www.sabs.co.za.

The Code of Practice for the handling of livestock at saleyards and vending sites, based on the above mentioned Act, can be found on the internet.

Role players

Note: Click to expand the headings below. To get a free listing on our website like the ones below, visit here for more information or place your order here. Disclaimer: The role player listings are not vetted by this website.

 
African Wildlife Auctions – www.awla.co.za
KLK Landbou Beperk – www.klk.co.za
Farmers’ Livestock Agents – www.farmerslivestock.co.za
AgriServe Cattle Co. – https://agriserve.co.za Sources weaners for feedlots
South African Federation of Livestock Auctioneers (SAFLA) – https://redmeatsa.co.za SAFLA is a federation for livestock auctioneers. It is a member of the Red Meat Industry Forum (see website for more).
SA Feedlot Association (SAFA) – https://safeedlot.co.za A major market focused on at auctions is the slaughter market which has its own specific requirements. This is a different market to stud stock trading.
South African College of Auctioneers – www.auctioncollege.co.za
South African Institute of Auctioneers (SAIA) – www.auctioneering.co.za

Further reference:

Refer to the “Abattoirs” page for details of other role players and major commercial groups.

  • Most Breeders’ Societies now specify a (within breed) standard catalogue format for auctions. Each has its own rules. Find role players on the “Animal Improvement and breeders” page.

The advantages and disadvantages of auctioneering

Advantages

  • Without an auction, prices can be manipulated downwards by the buyers e.g. in beef production there are a few strong buyers and many weak sellers.
  • The fact that the market is price efficient, producers receive payment almost immediately after the animal is sold and all types of livestock can be marketed.
  • No market knowledge is required by the producer. A good auctioneer is able to break up buyer’s rings if the sellers are on his side.

Disadvantages include

  • high shrinkage and transportation costs;
  • disease spreading is more likely;
  • excessive stress is placed on animals;
  • this is a lengthy, time consuming process;
  • auctions can be manipulated. Buyers form rings and this usually occurs when cattle supplies are in a surplus situation;
  • traditionally, auctions are held at specific places such as Farmers’ Association sale yards which means cattle have to be moved from the farm to the yard;
  • the seller feels pressure to sell his cattle at the sale at the price offered or take his animals home again.
Source: SA Stud Book
 

An Auctioneer’s personal skills should include:

  • being professional, competent and projecting an impartial image;
  • excellent communication skills, humour, charm;
  • reliability and trustworthiness;
  • a commanding if not charismatic presence;
  • good sales skills;
  • versatility in applying these skills e.g. being able to sell a race horse today and wine tomorrow;
  • not only being knowledgeable about information in the catalogue but knowing how to interpret, communicate and clarify pertinent details for the buyer e.g. EBVs that are significant to the pedigree about the Sire’s family as well as that of the Dam and her performance traits;
  • intuition and being astute;
  • being a “psychologist” and “sociologist” – know how to read people (the crowd) as well as the context accurately;
  • being able to easily assume appropriate facilitation roles;
  • understanding all the roleplayers as well as their agenda;
  • “reading” the dynamics unfolding before they happen e.g. the values and norms of specific groups and how they are likely to respond to events; each other and why.
Source: Mike Killassy (see http://mikekillassy.com)

Websites and publications

  • Visit the websites listed earlier in the chapter. The APAC website, www.apacweb.org.za, for example, has newsletters, articles and magazines which can be downloaded.
  • The weekly agricultural publications Farmer’s Weekly and Landbouweekblad carry news of auctions. Find the auction report, auction advertisements and auction calendar options at www.farmersweekly.co.za. The electronic arm of Landbouweekblad, www.landbou.com, offers an SMS service with livestock auction prices. Find auction prices under the “Markte” option.
  • The Stud Breeders’ Manual deals with auctions and sales under the auspices of breeders’ societies. The chapter is titled “Auctions as a marketing mechanism”. Contact SA Studbook at 051 410 0900 or visit www.studbook.co.za.
  • Find the DALRRD Info Pak The Livestock Auctioneering Process, part of the Small-scale farmer marketing series, at www.dalrrd.gov.za.
  • The KwaZulu-Natal Department of Agriculture has a dcoument “Buying and selling livestock at auctions – do’s and don’ts” under “Resource centre” at www.kzndard.gov.za.

Some articles:

With gratitude to those who contributed information to this page: Mike Killassy; Lizel Pretorius (ex-APAC); Pieter Geldenhuys (Alliance Group) and Andries Venter (NSPCA).

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