Off to the works at touch of a button

By PHILIPPA STEVENSON

Rural internet site Fencepost.com has branched out to offer electronic trading of cattle destined for slaughter.

The Fonterra subsidiary, which already offers Live.ex, an on-line, farmer-to-farmer market for livestock, has added Prime.ex to its stable.

The tendering system, which has taken a year to develop, is designed to enable dairy and bull farmers to sell their stock directly to meat companies.

But Fencepost Prime.ex spokesman Allan Barber, a former Affco chief operating officer, said processing companies were cautious about the new procurement method.

Fencepost has four meat company partners on its site which could use the system - Riverlands, Greenlea Premier Meats, Taylor Preston and Wallace Corporation.

They already offer payment schedules and other information but Mr Barber said discussions were still being held about their involvement in Primex.

The two main North Island companies, Affco and Richmond, had been told of the e-trading system but had not registered as buyers.

The companies will pay commission ranging from $4 to $6 a head depending on their level of association with Fencepost. Full partners paid the lower fee, those with no association the higher figure.

Mr Barber said the system was believed to be the first of its kind in New Zealand. It offered advantages for farmers and meat companies.

"From the farmer's perspective, it's an easy, secure and fair trading system which we believe will ensure the best market price on the day," he said.

"Farmers who want to sell stock individually can set a reserve price and specify the timing of the tender as well as the kill period.

"This is a major advantage in terms of farm planning and management."

E-trading gave meat companies a new, streamlined, confidential and efficient channel for buying stock, he said.

"The company can find stock at the touch of a button, get information on the stock type, tally, tender and slaughter dates to find exactly what they're looking for."

Live.ex manager Dave McPherson, who helped develop Prime.ex, said the site was a tendering system "the same as five agents driving up a farm track. It just puts a lot more efficiency into it".

It was possible to describe prime beef by weight and grade for the e-trading system which would rely on accuracy.

But it was unlikely to be quickly extended to lamb while grade parameters varied so widely between meat companies, he said.

Mr Barber believed Prime-ex would be used on the shoulders of the stock-selling season, not at the peak when meat companies "will be so full of stock they won't need the service".

The site would offer a "bull calculator", a guide to pricing stock taking into account local and overseas market trends and conditions. It had been modelled on the methods used by top farmers and was likely to also serve as an education tool.

Around a million cull cows and bulls are traded each year and Prime.ex aimed to handle 1 or 2 per cent in its first year, he said.

Bulls are sold in mobs but dairy farmers, who often have a small number of boner cows to sell, will be able to group them for sale in pools of 40 head with other farmers in their area.

"From the meat processor's viewpoint, the pooling system offers efficiencies in consolidating small quantities of livestock for collection within a specific area," Mr Barber said.

All parties in the trade are anonymous until a trade is made, when the buyer and seller are notified by e-mail and identified.

Fencepost