Sold! Learning the auction lingo

Vleissentraal auctioneer Vincent Pike explains that the behind-the-scenes planning of a successful auction requires cooperation from auctioneers and farmers.

Farmers enter the livestock they wish to sell, and a livestock marketer subsequently classifies and sorts the animals into lots, which are groups or individual animals that are up for sale.

Lots are grouped according to animal type and specifics such as age, weight, and condition. This information is used to compile an auction catalogue, which is released prior to the auction.

When the auction day arrives, buyers must register and receive their buyer number for the day. Registration entails completing a form that includes business details such as a VAT number, buyer’s personal information, and contact details.

For first-time buyers, part of the registration includes FICA compliance, which requires their banking details, proof of address, and any other documents linked to the buyer’s business.

Buyers settle their accounts directly after the auction has concluded. The payment office must receive proof of payment or confirm a line of credit before any livestock is released for collection.

Auction jargon

Auctioneers focus not only on getting a fair price for the seller but also on keeping the audience energised. To do this, they use the classic auctioneer’s chant, which is often fast-paced and difficult for new buyers to understand.

Although wording varies from auctioneer to auctioneer, Pike and BKB auctioneer Jan Mostert highlight common terms and their meanings:

• Bid: an offer made by a potential buyer
• Reserve: the minimum amount the seller will accept
• Dropping the hammer: the lot has been sold
• Under the hammer: the lot is currently being auctioned
• Going: a call inviting any final bids before the lot is sold
• On the house: the lot that wasn’t sold during bidding
• The hammer speaks today: bidding is lively and prices are strong

To place a bid, bidders simply raise a hand or nod. Alternatively, they can also nod their heads. Most livestock auctions do not use paddles, so these clear gestures are common. Spotters assist the auctioneer by identifying and pointing out each new bid.

Making the right bid

On auction day, physical checks of the livestock, along with the catalogue information, help potential buyers decide whether to bid.

Mostert says the most common mistakes new bidders make stem from uncertainty and a lack of preparation. Doing thorough research on the lots’ welfare and history can help bidders make an assured purchase. He adds that new bidders should also be conscious of their budgets, as they can sometimes lose track and overbid.

Catalogues vary depending on the type of animal being sold. For example, stud listings contain more detailed information on breeding performance and lineage. Aside from seller information and history, a typical stud bull catalogue provides data on fertility value, pedigree, progeny, frame and carcass evaluations, and myostatin test results.

For commercial livestock, a standard catalogue includes breed, sex, age, weight, and reproductive and health status. Commercial livestock are commonly grouped together in lots, while stud animals are sold individually.

Pike explains that starting prices for livestock lots are determined by average market values and negotiations between auction firms and sellers. Stud animals are generally priced higher because of their genetic merit and breeding potential, though market demand also plays an important role in pricing.

Auctions are exciting events for buyers and sellers and an excellent opportunity to network with fellow farmers and industry representatives. They are at the heart of agricultural trading and serve farmers nationwide.