AuctionsPlus weekly commercial sales offer a unique advantage for agents and buyers to negotiate and finalise deals after the auction has ended, which depending on seasonal and market conditions can be a critical feature of the sale.
With the sheep and lamb market witnessing a slow start in 2023, the percentage of sales that have taken place post-auction has risen significantly. On average, 24% of all lots sold on AuctionsPlus since 2019 have been sold post-auction, increasing the clearance rate from 56% at the close of the auction to 72% within 48 hours of the auction's end (Figure 1). So far in 2023, 39% of lots are selling post-auction. Analysing season and price trends over the past four years has highlighted the varying extent and impact that different factors have on the negotiation period in the 48 hours after a sale.
Figure 1: AuctionsPlus commercial sheep and lamb sale clearance Jan 2019-23
Reviewing the month of January in 2023 and 2022, the impact of seasons and market factors on the point of sales for AuctionsPlus commercial sheep and lamb sales is evident (Figure 2). January 2023 saw weaker demand and softening prices across the industry, resulting in a disparity between vendor expectations and buyer willingness, causing auction clearance rates to drop to 35% from 62% in 2022. Low clearance rates at auction have led to an increase in post-sale negotiations, accounting for 39% of total sales in January 2023 and helping to lift clearance rates by 23% compared with 2022 where post-sale negotiations accounted for 18% of total sales.
Figure 2: AuctionsPlus commercial sheep and lamb sale points of sale January 2022 vs 2023.
The increase in sales after the fall of the hammer has coincided with a widespread easing of prices, highlighting a strong correlation between a falling market, and increased post-sale transactions. Since 2019, the crossbred lamb category has had the largest number of lots selling post-sale when the average sale price has fallen over consecutive months. This has been particularly evident during January 2023 where the average price fell to $115/head and 43% of sold lots occurred after the sale. On average since 2019, crossbred lambs have seen 19% of the total offering being sold post-auction. This is slowly on the rise as the market retreats, averaging 31% in Dec 2022 and 43% in Jan 2023.
Figure 3: Average price and percentage sold post-auction for crossbred lambs offered in AuctionsPlus commercial sales Jan 2019-2023.
In conclusion, the ability to negotiate and finalize transactions post-auction has proven to be an important feature for agents and buyers. The analysis of seasonal and price trends over the past four years has shown that different factors have varying effects on the negotiation period post-sale. With the rise in post-auction sales, especially in crossbred lambs, it is evident that buyers and sellers are using this time to reach an agreement, particularly during a softer market. This feature not only offers flexibility and convenience but also ensures that both parties are satisfied with the outcome of the transaction.