Auctions provide a wonderful opportunity for farmers to sell or purchase livestock at a competitive or market-related price. However, navigating livestock auctions is an intricate process that requires a comprehensive understanding of the regulations and protocols.
To help you grasp the nuances of the auction process, take a look at the regulations and benefits that underpin the realm of livestock auctions:
Advantages of Buying/Selling At Auction:
- Auctions are still the preferred method of buying and selling livestock in South Africa and offer several advantages, depending on your specific needs and circumstances:
- Buyers have the opportunity to browse dozens of animals from different sellers before choosing the lots that meet their requirements and needs.
- These auctions are important for emerging farmers with a small number of animals to trade and who don’t have the necessary marketing power larger farms possess.
- Auctions provide a transparent environment where buyers can discover fair market prices for livestock and producers receive payment almost immediately after the animal is sold.
- Participating in livestock auctions allows buyers to gain insights into current market trends. Understanding market dynamics and price movements can help buyers make informed decisions and plan their purchases strategically.
Disadvantages of Buying/Selling At Auction:
While buying and selling at auction provides a range of advantages, there are also potential disadvantages that one should consider:
- One of the biggest disadvantages of buying or selling livestock at auction is that animals are coming from various areas across South Africa and from owners that buyers may not know. Therefore, the spread of animal diseases is quite high.
- While various transportation regulations are put in place, animals on sale are still under a lot of stress while being transported and sold. This may lead them to fall ill after purchase.
- Auctions typically operate on an “as-is, where-is” basis, meaning buyers may not receive any guarantees or warranties about the animals’ performance, productivity or behaviour after purchase.
- The success of a livestock sale at auction is heavily influenced by market conditions. If there is a low demand for a particular type of livestock or if market conditions are unfavourable, sellers may not achieve optimal prices.
Selling at Auctions
General livestock auctions have a mixture of animals, such as beef and dairy cattle, goats, sheep, pigs and chicken. The most popular auction method associated with livestock auctions is called a calendar auction, which is held at the same place on a weekly, monthly or quarterly basis. Potential buyers will need to register before attending the auction and provide a refundable deposit of around R2000. However, this amount varies according to the auction and auctioneer.
Additionally, auction houses are obligated to add livestock into various categories. This is determined by the animals’ age, fatness, conformation, damage and sex, with A-grade and B-grade animals being the healthiest and fetching the highest prices. C-grade animals will fetch the lowest.
Transportation
Sellers are responsible for ensuring the animals arrive safely at the auction venue. A clean vehicle with good airflow that is not overcrowded with animals is essential and is a prerequisite when complying with the Animal Identification Act of 2002. This act requires movement permits to be completed by the owner to prove that the animals were not stolen and to help trace the movement of animals if an outbreak occurs. The act also requires the animals to be correctly branded or tattooed with the owner’s brand. Animals are inspected by the stock theft unit at the auction and will not be allowed to be sold if they do not comply with the regulations mentioned above.
Here is what this process entails: Registering with the National Department of Agriculture in Pretoria,
Applying for and being allocated your own identification mark,
Ensuring that your animals are tattooed or branded with your mark. This can be done by yourself or with a registered contractor.
Vehicles and trailers have to comply with regulations when transporting animals. Animals are not to be tied down by the legs or body on the back of an unregulated trailer or vehicle, but should instead be tied by the head or by their horns to the rails of a regulated vehicle to prevent them from jumping out. Additionally, a non-slip mesh or rubber mat needs to be on the floor to stop the animal from slipping and falling. No makeshift rails or crates are permitted when transporting livestock to and from the auction. The SPCA regularly sends inspectors to livestock auctions. Therefore, if these regulations are not met, the auctioneer and owner can be charged by the SPCA, South African Police Service and/or other animal welfare entities.
Additional Documentation
Once at the auction, the seller will need to fill out the acknowledgement of receipt form, which includes his/her name, physical address, ID number and stock identification details. An additional form will need to be filled out, declaring that the animals are healthy and disclosing any diseases that they may have previously been treated for. These forms will need to be accompanied by veterinary certificates confirming the animal's negative status for foot-and-mouth disease (FMD). Animals in poor condition are evaluated on-site. If found to be ill, they are sent back home.
Last Words
The fast-paced bidding environment provides an opportunity for price discovery, networking, and accessing a diverse range of livestock. While the process comes with its challenges, such as market fluctuations and the need for thorough research, the benefits of transparency, competitive pricing, and networking opportunities cannot be overstated. Whether you're a seasoned farmer, a new entrant into the industry, or an enthusiast looking to expand your herd, participating in livestock auctions can be a rewarding experience.
