The traditional gathering at the sale yards might become a thing of the past if technology has its way. Joanna Grigg looks at developments in online livestock trading.
Farmers who like the sweat and excitement of a sale yard auction look set to get real-time bidding action online soon.
It might not smell the same but no doubt there will be plenty of live action as groups of advertised stock are put up for sale, with bids streaming in via the internet.
At least two existing agencies currently providing online listings of stock for sale are looking to roll out regular auctions via their online trading platforms within the next few months. Both PGG Wrightson’s AgOnline and online marketplace StockX have indicated projects are underway.
Both are looking for first-mover status and to replicate the success of the Australian online auction platform AuctionsPlus, which accounted for more than $850m of livestock transactions in its 2017-18 year. AuctionsPlus has been operating since 1986 and has also run auctions for other farm outputs, such as grain, wool, and even farm dogs.
The arrival of auction platforms in New Zealand will be a big step beyond the traditional classified listing of stock available now through several livestock trading firms. These typically have photos, a stock description, a suggested price and vendor or agent contact details. The deal is made between one buyer, one seller and often brokered by the agent. Online auctions will throw the buyer net much wider.
Farmers can view the animals by video link and bid themselves, rather than use a local agent to do the buying on their behalf at a sale outside the home district.
PGG Wrightson General Manager Livestock Peter Moore said the livestock division continues to invest in technology and has a number of major projects under development that will come to fruition in 2019. These include its own online auction trading platform called bidr (www.bidr.co.nz). The site is still under construction, but buyers can register there now to buy and sell once it is launched.
StockX is also working on its own auction platform and has plans to launch it in the first half of this year.
StockX boss Jason Roebuck said the site had more than 4000 farmers registered to trade both between farmers, and between farmer and processors.
For store stock traded on StockX, a buyer places a bid on a lot and the seller can accept the bid. Monetary exchanges go through the StockX trust account and payment is only made when the final sale value is confirmed by StockX with both the buyer and seller. Any variances due to weight and tally are settled at this point. Commissions are offered at 2.5% for store sales and zero for prime stock transactions.
With real-time bidding at a live online auction, the prospective pool of competing buyers will increase. Physically attending the sale will no longer be required. Farmers can view the animals by video link and bid themselves, rather than use a local agent to do the buying on their behalf at a sale outside the home district.
Roll-on effects will be that the daily market prices will be more easily seen. This has the potential for a uniformity of price. For example, two auctions held the same day at different sale yards might yield quite different results as they run. Auctions viewed online, side by side, gives the buyer the ability to see which auction is running hotter than the other, and perhaps they will switch to the lower priced auction.
The need for district sale yards is likely to be reduced as farmers choose to sell via virtual auctions, to reduce cartage costs and reduce biosecurity risks.
None of this will be possible without a capable broadband service. The growth in online classifieds of livestock has increased as farmers become more competent with loading photos and video to the internet.
An inability to upload digital images has been an issue in the past, with poor quality photos or no photos accompanying some classifieds. Purchasers expect good quality images.
Verification by trained agents will remain important to many farmers. Checking that stock match expectations (weight, genetics, animal health) is set to remain an important part of the agent’s job.
Carrfields Limited offers an online listing service (carrfieldslivestock.co.nz), mainly for dairy stock, as does MyLoadingRamp (myloadingramp.co.nz) which has built up a strong following since its inception a few years ago.
Lifestyle block traders seem more willing to trade stock without stock agent input, choosing to sell via Facebook pages and TradeMe.
TradeMe already offers a real time bidding option in the form of deadline bidding. TradeMe does not record the number of animals sold per listing but a view at the listings shows that most auctions are for fewer than 10 animals. The number of livestock listings on TradeMe has declined over the past three years. In December 2018, the number of listings onsite for livestock was down 15%on December 2015.
In terms of value, the TradeMe listing fee of $39 is considerably cheaper than what is typically charged by stock agents if selling a larger line of stock. However, the buyer may have to buy stock without physically viewing them or without having a trusted and trained agent view them. Payments are typically direct from buyer to seller, introducing an element of risk. Since 2017 TradeMe has offered the payment facilitation service PING, to improve assurance of payment and quality.
TradeMe suggests prospective buyers do their due diligence before purchasing livestock. This includes checking that sellers are NAIT-registered, and visiting the animals before committing to purchase.