LAST week the RSPCA released a set of guidelines which stipulated livestock shouldn't be sold through saleyards.
This wish may eventually come true if the selling trend highlighted in the latest data continues.
There has been a noticeable shift to sell cattle direct to meatworks in southern Australia this season, with the auction system's share of cattle slaughtered in Victoria last month dropping to a low of 40 per cent.
The calculation is based on National Livestock Reporting Service figures which show 104,090 adult cattle were processed in Victoria last month.
At the same time, the NLRS reported throughput of 42,786 cattle at the major prime markets.
It works out as a 60:40 per cent split between the number of cattle killed compared with the total number sold through auction.
The figures, however, can only really be used as a guide for selling trends, as the figures aren't exact due to meatworks buying animals from interstate and the NLRS not collecting figures from every saleyard.
However, the overall trend towards direct selling, which has been a hot topic in the prime lamb industry, appears to be just as significant for cattle and is evident across all the southern states.
For example, in South Australia last month, the adult cattle kill climbed to 41,330, but saleyard throughput stayed stagnant at just over 21,000 head.
As a comparison, in November last year there was just 34,442 cattle processed in South Australia yet more than 26,000 were sold via auction that same month.
I am not supporting the RSPCA's claims that animals should be sold direct to meatworks to limit stress and improve welfare. However, the issue came up when discussing the prime beef market at the recent Euroa store sales when one agent made the observation that "cattle prices shouldn't be as bad as they are".
His argument was that the season wasn't bad enough, or meat exports so depressed, to cause the slump in prices witnessed late last month.
Instead he linked it to farmers selling more cattle direct, creating the scenario of abattoirs having enough supply, which had dragged down competition at physical markets.
"There is a waiting list of two to three weeks to get into most abattoirs, and when you have supplies booked up like that, you just don't get competition in the auction system and prices and confidence just slide and it becomes a downward cycle," he said.
It is not a new argument - indeed, when the merits of saleyard selling are debated, the topic of the auction system being the main price-setting mechanism for livestock is the key reason people say the saleyard sector needs to be supported.
So what is driving the shift towards direct selling? Talking to people at the Black Friday store sales in the past fortnight at Euroa, the issues raised were:
THE erratic price results for cattle sold via auction in recent weeks, which has prompted farmers to turn to the safety of a locked-in price;
MAJOR cattle buyers such as JBS Australia encouraging direct selling;
GENERATIONAL change, with younger producers more inclined to opt for different selling methods over the traditional auction system.
I think the erraticness of the cattle market and the costs of saleyard selling are the two biggest reasons behind the growing trend to direct selling.
At a recent store sale, a producer had brought along his paperwork from a consignment of grass-finished cattle sold at a North East Victorian prime market, wanting to know if the costs and charges were in line with other centres.
The producer had sold a mixed load of 18 steers and heifers, with an average weight 505kg, for an average return of 180c/kg or $908.
The selling costs, including GST, amounted to $1857, which included transport, transit insurance, commission, weighing, yard and delivery fees, and Victorian compensation fund levy.
He was flabbergasted he had lost nearly two cattle (they could claim the tax back) in costs to sell just 18 cattle, and told The Weekly Times he would look at other selling options next time.
The biggest threat to saleyard throughput is not the RSPCA with its ideas on how producers should deal with livestock, but the costs of selling via auction - perceived or otherwise.
When producers are trying to tighten their belts, selling direct probably appears the easy way to cut out the middle man and save on some costs, but it does potentially come at a price.
Last week market analysts with Meat and Livestock linked the backlog of cattle waiting to be killed at meatworks to falling prices.
"National direct to works cattle prices eased again this week, with many processors reporting an ample supply of cattle," MLA reported.
"Indeed several reports of processors being fully booked into 2013 is placing downward pressure on overall national prices."
Historical data for the southern states suggests that a healthier ratio for saleyard throughput compared to slaughter is 45 per cent plus, and the current skewed result of down to 40 per cent is working against producer returns and confidence.
