Cattle Baron Master Business Plan — Route to Market
Selling weaners into the feedlot channel, auction versus direct sale, price formation and the buyer relationships that matter.
Route to Market
Jump to section
- Overview & contents
- i. Important Notice
- 1. Executive Summary
- 2. A Note on the Name
- 3. The Market and the FMD Crisis
- 4. Foot-and-Mouth Disease as a Business Risk
- 5. The Production System
- 6. Herd Performance
- 7. SWOT and Competitive Position
- 8. Grazing, Land and Water
- 9. Unit Economics
- 10. Route to Market
- 11. The Five-Year Build and Its Gates
- 12. Funding
- 13. People, Security and Stock Theft
- 14. Compliance and Traceability
- 15. Financial Projections
- 16. Break-Even
- 17. Sensitivity and Scenarios
- 18. Risk Management
- 19. Implementation Timeline
- 20. Returns
- 21. Key Performance Indicators
- 22. Key Assumptions
- 23. Conclusion
- A. Appendix A: Consolidated Financial Summary
- B. Appendix B: Capital Schedules
- C. Appendix C: Funding and Debt Schedules
- D. Appendix D: Risk Register
- E. Appendix E: Glossary
|
Channel |
Character |
Note |
|---|---|---|
|
Feedlots, direct |
Volume, contracted, banked payment |
The primary channel. Feedlots want an even line of weaners of consistent weight and type, delivered when promised. |
|
Speculators and agents |
Immediate, cash, lower price |
Useful for surplus and off-type animals, and for cash flow in the build years. |
|
Auctions |
Price discovery, transparent |
Worth using periodically to benchmark what the direct buyers are offering. |
|
Cull cows |
Abattoir or speculator |
16.0% of the herd a year at roughly R16 000 a head. A material and often overlooked revenue line. |
An even weaner line is worth real money. Feedlots discount mixed loads because they complicate their own feeding programme. A controlled breeding season produces calves within a narrow age band, which produces a uniform weaner line, which sells at a premium to the same animals sold piecemeal.
10.1 How the channel mix evolves
|
Years 1 to 2 |
Years 3 to 4 |
Year 5 onward |
|
|---|---|---|---|
|
Feedlots, direct |
Limited; volumes too small to interest them |
Building; the line becomes uniform enough |
The primary channel |
|
Speculators and agents |
The main outlet for small, mixed lots |
Used for off-type animals and cash timing |
Surplus and off-type only |
|
Auctions |
Used to establish what the market pays |
Periodic benchmarking |
Benchmarking only |
|
Cull cows |
Abattoir or speculator, opportunistic |
On a culling policy |
On a culling policy, 16% of the herd a year |