Transitioning from Capital to UK Livestock Markets -

Until early 2024, Murray Roos was instrumental in a project focused on reshaping global capital markets via the London Stock Exchange’s developing digital assets platform. Now, the 48-year-old former trader is utilizing technology in a more traditional field — the UK’s historic livestock auctions.

Roos stepped down from his role as the head of capital markets at the LSE in March and relocated to a 200-acre farm in East Sussex that he purchased during the later stages of the Covid-19 lockdown.

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Surrounded by rolling hills, woodlands, and tranquil ponds, the farm serves as a hands-on environment for Roos to teach his children about the food chain, illustrating that meat doesn’t originate in plastic packaging.

The farm is home to chickens, pigs, sheep, and vegetable gardens. Currently, Roos manages about 300 cows, which have captured his interest since leaving the LSE, fueling his ambition to facilitate the transition of farmers from traditional in-person livestock auctions to his online trading platform, LiveStockEx.

“I’ve always preferred looking at things from first principles. Rather than buying bread, I’d rather bake it myself,” Roos reflects, drawing from his family’s agricultural heritage in South Africa and Zimbabwe.

His brief venture into raising chickens in Wimbledon ended unexpectedly due to urban foxes.

Initially, the farm was a secondary pursuit for Roos, who co-led Citigroup Inc’s equities and securities services until early 2020. He hired a manager to handle the day-to-day operations while he juggled his demanding job.

The LSEG intended to leverage blockchain technology, commonly linked to Bitcoin, to enable quicker and lower-cost trading of traditional assets as the UK’s capital markets sought to regain relevance post-Brexit.

Roos quickly became fascinated with the intricacies of buying and selling in the UK livestock sector, which comprises 44,000 cattle farmers and sees annual auction sales of 1.26 million cows.

His farm manager, like many in the UK, must transport animals destined for sale to the nearest livestock auction, roughly 40 miles (64 kilometers) away in Ashford, Kent.

“Being from a finance background,” Roos remarks, “I would ask him, ‘What’s our margin, how much are you selling them for?’ His frustratingly ambiguous reply was always, ‘we’ll get what we get.’”

Roos purchased his farm in the closing months of the Covid-19 lockdown. Image: Ayesha Kazim/Bloomberg

According to Roos, farmers often do not know how many buyers will show up to an auction each day or their willingness to pay.

When bidding starts, farmers must compete with the auctioneer’s price until someone meets the seller’s expectations. On some occasions, if the bids are inadequate, the livestock is loaded back onto the truck and returned to the farm, or they may reluctantly accept a lower offer to avoid that inconvenience.

The conventional payment method relies on checks, leading to substantial transaction costs. Roos cites an invoice from a recent sale totaling £8,120 ($10,285), which incurred a commission of £450 and fees of £137, cutting nearly 7% from his revenue.

Recalling his first auction experience, Roos compares it to entering a trading pit in 1995, where it was easy to identify participants, reminiscent of his early days in equity trading characterized by open outcry exchanges.

“You could visualize it: there’s Goldman Sachs, there’s AJ Bell, there’s the broker, and the big bad investment bank,” he describes.

In this analogy, Roos’ farm resembles a small buy-side portfolio manager “receiving a raw deal.”

A Fresh Perspective

Roos believes he has found a solution that not only benefits his farm but thousands of others. Along with his software engineer co-founder Srikrishna Murali, he imagines LiveStockEx as a digital platform where farmers can list the cows they wish to sell, cataloguing them with passports issued by the British Cattle Movement Service, along with a quality index score from LiveStockEx based on breed, age, and weight.

Buyers — including abattoirs, larger farms, and meat producers — can utilize the platform to make offers on various groups of cows.

Transactions can be completed with a few clicks, and the animals are transported directly to their new homes. This system aims to be more efficient, eco-friendly, and reduce the risk of disease associated with herds mixing at auctions.

LiveStockEx ensures instant payments and releases funds to the seller upon the delivery of the animals. In the event of non-delivery, the platform acts as an intermediary, charging fees to the responsible party.

It operates on a commission basis of approximately 1% to 2% of the sale price and also reports sales to the UK’s Department for Environment Food and Rural Affairs, helping mitigate the risk of farmers facing penalties for not meeting the 36-hour reporting deadline for cattle movements.

Roos argues that the trading platform exceeds existing online classified ads that serve as alternatives to auctions, as those lack the comprehensive features of LiveStockEx and do not function as trading venues.

Roos aims to secure as much as £1 million in external funding for the project by the first quarter of 2025.

After discussing his initiative with finance acquaintances, he noted, “the equity professionals grasped the concept immediately,” adding, “they couldn’t believe it wasn’t already in existence.”

However, attracting more than just equity traders will be essential. The farming community is steeped in tradition, with auctions — often conducted in grandstand settings that evoke theatricality — being a core part of that history.

Roos’s target market includes farmers already utilizing technology, such as automated feeding systems utilizing digital tags on cows’ ears. Image: Ayesha Kazim/Bloomberg

Chris Dodds, head of the Livestock Auctioneers Association (LAA) and a 44-year veteran in the industry, comments, “It’s the oldest marketing platform in agriculture, facing repeated challenges over the past two centuries.”

He adds, “In recent years, companies have emerged claiming they can create something faster and cheaper.”

Nevertheless, Dodds notes that livestock auctions continue to handle at least the same percentage of livestock sales as prior to the 2001 foot-and-mouth disease crisis, which forced the temporary closure of in-person auctions. Attempts to transition to video auctions fell short after buyers voiced concerns about receiving livestock in subpar condition.

Recent data from the LAA indicates that approximately 11 million animals were sold at livestock auctions in 2023, contributing to a total revenue of £2.2 billion.

“Selling livestock online is not a direct competitor to our operations,” asserts John Rossiter, head of auctions at the Hobbs Parker Group, which oversees the livestock market in Ashford.

Rossiter explains that many farmers prefer purchasing livestock through physical inspection, noting, “Many farmers attend auctions weekly without intending to buy or sell; they enjoy the community aspect.” He describes farming as a “solitary existence.”

Additionally, Hobbs Parker’s auctions feature charity-supported medical facilities, barbers and hairdressers, tool shops, a solicitor’s office, feed suppliers, and a café.

“Some people genuinely appreciate the tradition of this practice,” Roos acknowledges. “However, those sentiments don’t reflect our target demographic.”

“They often sell four or five animals for enjoyment; it’s a social event for them,” he explains. “We are focusing on those burdened by high transaction costs, the serious farmers.”

In addition to cattle, Roos raises pigs, sheep, and grows vegetables. Image: Ayesha Kazim/Bloomberg

Roos seeks farmers like Ben Pike.

“I’m all for it,” states Pike, 40, a farmer from nearby Heathfield who sells around 1,000 calves each year. “The current auction system and its accompanying commission fees are excessive, besides the transportation costs to auction and then to another farm add unnecessary expenses.”

Pike mainly conducts his transactions through private sales and turns to auctions only as a “last resort,” he explains.

“Everyone we interact with is working in the 21st century,” Pike observes, adopting digital solutions for accounting, even those in their 60s and 70s are embracing these changes.”

Roos’ ideal target audience comprises farmers already adopting technology. He showcases an automated feeding system activated by a digital tag attached to a cow’s ear — once the animal has eaten its allocated feed, it stops the dispensing process. Various farm management apps can also track an animal’s weight via tags, with the data easily integrated into the LiveStockEx platform.

Roos aims to raise up to £1 million ($2.5 million) in external funding for his venture by the first quarter of 2025. Image: Ayesha Kazim/Bloomberg

The strategy involves offering a complimentary farm management system integrated with the LiveStockEx platform to promote farmer adoption. Initial outreach to prospective users has been largely positive, targeting abattoirs, brokers, and major meat buyers, as stated by Roos.

He is starting with cattle in the UK, where the BCMS passports simplify sourcing, and where the market consists of multiple sellers but few buyers.

If this venture proves successful, Roos plans to expand into related agricultural markets, both within the UK and abroad, and even develop forward contracts for farmers raising cattle they intend to sell in the coming months.

However, he is not keen on revisiting blockchain technology. The LSEG initiative he contributed to has yet to come to fruition, though the stock exchange reports that preparatory work is underway. Roos feels that the technology, frequently linked with hype, would likely deter many of his prospective clients.

He speculates they might react: “Woah, that’s too complicated for me.”

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