A beginners' guide to auctions

Livestock auctions offer a relatively safe way for farmers to trade their animals, with a fairly low barrier to entry. Cornel Landman and Anton Vos spoke to Glenneis Kriel about factors that producers have to consider when participating in these events, and the administrative processes that need to be adhered to.

- Cornel Landman and Anton Vos

Auctions present an easy option for farmers who have surplus animals to sell or have no agreements with buyers. They also give a true reflection of what the market is willing to pay at any given time, and money and animal transfers are done on the same day.

Animals can be sold at a private or public auction, with the number of animals involved and the value of the animals being the main determinant of where they should be sold.

Cornel Landman, owner of Karoo Lusern, regularly buys and sells animals at auctions in the Klein Karoo.

“I buy most of the livestock we finish in our feedlots directly from farmers. But I still go to auctions at least twice a month to get a feel for the market, network with buyers and sellers, and support the local farming industry by purchasing livestock from smallholder farmers. Their only means of selling livestock is at auctions.

“When auction volumes are low, the auctioneers often ask me to supply the auction with additional animals to increase auction numbers, which I happily do if my livestock numbers allow,” he says.

Private auctions are usually hosted once a year, with the animals of only one seller or group of sellers being on offer. Public auctions, in contrast, are held weekly or monthly, with schedules being available from auction houses.

Hosting a private auction can reduce transport costs if the auction is hosted on the farm, but it adds other costs, as the farmer needs to set up amenities and facilities to host the event.

Anton Vos, managing director of Vleissentraal, says this can be overcome by making use of the facilities of the auctioning company, but it adds the challenge of moving a large number of livestock.