Understanding the Marketing channels for livestock
By Hanks Saisai|
It is every farmer’s desire to have a target market for their produce. In essence, the ultimate goal of farming is for one to engage in the production of commodities that can be sold to generate an income.
However, farmers face several challenges when marketing their products making it crucial for the farmer to understand the different enterprise specific marketing channels that are available in Namibia.
Livestock farmers must be cognisant of the respective marketing channels at their disposal and understand critical components of each marketing channel.
Firstly, a cattle farmer must understand the abattoir as a marketing channel for livestock. Cattle farmers can have access to abattoirs such as MEATCO, and BeefCor that slaughter cattle to produce beef, which is sold to export markets such as the EU, United Kingdom, USA, China, and Norway.
Abattoirs have the advantage of offering secure marketing channels with predetermined prices according to cattle categories, age, and quality of meat.
However, the downside of abattoirs as a marketing channel is that a farmer will usually be a price taker. Additionally, when there is a disease outbreak, farmers cannot market their livestock to abattoirs.
The second marketing channel for livestock farmers is usually auctions. In Namibia, auctions are held in most cattle producing regions such as communal areas South of the Veterinary Cordon Fence.
Auctions are conventionally organized by auctioneers such as AGRA, Blauwberg Auctioneers, Namibia Livestock Auctioneers (NLA), Windhoek Livestock Auctioneers (WLA) and Karoo Ochse auctioneers that are responsible for bringing sellers (farmers) and buyers together in order to successfully market livestock on offer.
Prices are usually determined through bids and offers that the buyers suggest for respective livestock being sold. Most prominent auction venues are usually equipped with weighing scales that are used to determine the prices of livestock.
Auctions have the following advantages: the price is known, costs are known, competition among buyers results in good prices for sellers, they are regularly organized and money transfer to the seller is always immediate.
On the other hand, some disadvantages of auctions are: low livestock numbers may result in fewer buyers; buyers can collude on purchasing prices and at times a farmer may run the risk of going back home with unsold livestock.
The third livestock marketing channel is permit days which are usually common in communal areas. Usually permit days involve a single buyer in agreement with a community or group of farmers to buy livestock at predetermined prices on a given day at a given venue.
In well-organized communities, the buyer agrees to buy livestock of different classes at certain prices. Usually, prices and venues are announced on the radio for interested sellers to bring livestock to permit days. The livestock have to be weighed one by one when being sold.
Advantages of permit days are that the price is known, money is readily available for the seller, most buyers are willing to take all livestock on offer, and permit days are regularly organized.
The disadvantage is that due to a lack of competition from buyers, prices may be low.
– Mr Hanks Saisai is technical advisor for crops and poultry at Agribank.
