Vet on Call: Understand the market before selling beef cattle

This week, I go back to the profitability of livestock farming.

The subject has elicited questions from farmers, especially on beef feedlots.

Most want to know the products in livestock farming, how to price their animals and how to get buyers offering the best prices.

Bungei from Kericho wishes to know if selling an animal for slaughter is profitable.

However, Kimani from Murang’a has resigned his fate to the tyranny of butchers.

He dismisses the concept of negotiating with buyers, saying regardless of how knowledgeable the farmer is on weight, the butcher will always have the last word.

Farmers need to understand the various ways of ensuring they have an unassailable negotiating lead when in business. As experts say, you should never negotiate from a position of weakness.

If you find yourself having to face a stronger party during negotiations, show up with an individual who can cover up for you weaknesses.

The beef cattle trade is interesting because farmers produce the animals and wait for butchers or brokers to give offers.

These latter two are able to know the meat and cash value of the animal at the farm or even a photo. Their aim is to minimise the purchase price and maximise the sale price.

This article is further anchored on the sale of cattle that I facilitated in Kamulu last week.

Paul keeps cattle, sheep and grows food crops. He arrived at the market with 16 Boran-zebu mixed breed cattle that were ready for slaughter. He has been fattening animals for some time but was not happy with the prices offered.

BASED ON BUYER'S OPINION

When he asked me to visit his farm, Paul was clear on his reason. “Help me fetch better prices,” he said.

I assessed the animals, the prices he had been offered and the amount he previously received after selling animals.

Paul’s main weakness was that he sold his animals without weighing them. He also did not know how to estimate their weight. The price was based on the buyers’ opinion.

He informed me his animals were being valued at a live weight of between 150 and 300kg by buyers.

Their offer for the best bull was Sh30,000 and the “worst” Sh18,000.

“Your cattle have a weight range of 150 to 550 kilos,” I told him.

The range of live weight prices for cattle in Kenya depends on the quality of the animals and distance to the abattoir.

Paul’s animals could fetch between Sh18,000 and Sh99,000.

I agreed to steer the sale of his animals but he needed to find a weighing tape.
The other option would be for him to accompany the buyers to the slaughterhouse, weigh the carcases and then get paid for the meat while the offal would be sold at the slaughterhouse. That, however, is cumbersome and expensive.

By the time I went back to the farm with two prospective buyers from Kiambu, Mathenge, the farm manager had weighed the animals and they ranged from 150 to 584 kilos.

George and Gichini, the two buyers agreed with my estimate and the tape weights. Their estimates on randomly selected animals tallied with the tape weights and mine.

“The doctor is here and we have to be sincere,” Gichini told Mathenge.

I told the buyers that the business would be to agree on the live weight prices and the animals would be theirs upon payment of the total price.

CONVERSION FORMULA

The negotiations took a bit of time because we had to agree on a conversion formula for the live weight to estimated carcass weight.

Eventually, we agreed that since the animals were grass fed, we would settle on a 50 per cent conversion rate. The buyers gave an average price of Sh50,000 for the animal except the one weighing 150kg.

We all agreed it was a fair price.

“The sale of slaughter animals is a science and an art,” Paul said.

Farmers must understand the market prices for beef at the various stages of the value chain and invest in knowledge.

The main thing is that every actor in the chain must make profit.

The farmer should get a big chunk of the money because she is the main producer of the raw material.

Farmers should also minimise the number of middlemen.

Finally, beef farmers must understand what they are offering to the market and the market they are targeting.

They should then define their product and package it according to the target market.

In beef farming, the products comprise breeding stock, feedlot stock, slaughter stock and manure.

Every farmer must invest in knowledge in order to know his or her products and package them accordingly.

This knowledge can be provided by animal health and production service providers as well as self-reading.