Livestock Marketing

By

Mr Allah Dad Khan

Livestock Marketing

Every operation should develop a marketing plan.

To develop a marketing plan, producers must answer the 3 W’s What? Where? When?

What?What product is being produced?

Market animals Size, weight, sex, breed

Replacement animals Age, open or bred, breed, sex

Niche markets All natural, organic, etc.

Knowing what product is going to be sold helps determine an operations market potential.

Where? Off of the farm

No commission or transportation costs Need to know current market situation Weight?

Auction Barn Easiest No problems collecting money May not receive complete worth of livestock

Cooperatives Able to group like kind and weight Usually receive higher prices Must of right kind and type to participate

Livestock Marketing Channels

Producer

Consumer

Trader/Middleman

Processors

Purveyors

Cooperatives

Food Service

Retail

Local MarketRegional Market

When?

Most livestock prices have a seasonal pattern. Prices are higher and lower than average for

certain types and weight groups during certain times of the year.

These changes are generally caused by: Increased demand

Holidays Summer BBQ season

Decreased supply Production cycles

Risk ManagementThe use of different management techniques

in order to reduce the amount of risk.Types of Risk

ProductionThe uncertainty of weather, disease, insects, weeds and infertile breeding stock.

PriceFluctuations in price due to unforeseen events.

FinancialUncertainty of operations ability to pay off debts, future interest rates, future borrowing ability and needs, and etc.

Risk Management ToolsProduction Risk

Keep up to date on the latest production practices and never be afraid to seek more information

Advanced input pricing (Booking ahead)Price Risk

Futures contracts and options Forward pricing contracts

Financial Risk Keep good records Keep up to date on all financial statements and

reports

Value Added Opportunities

PreconditioningCooperative marketing/purchasingRetained ownership through custom feedingStrategic alliancesNiche Markets

OrganicNatural

Summary

Every livestock operation needs to develop a marketing plan.

Remember the 3 W’sWhatWhereWhen

There are risk management tools available.Be sure to investigate value added

opportunities.