Feedlots are known as the beef cattle fattening process and rumour has it that it is quite profitable in South Africa. The process is to increase the weight of the cattle which improves the quality, and of course, increases the market price of the livestock.
For farmers who are interested in starting a feedlot, there are some requirements and factors to consider so you can get the best out of your cattle.
There are a few phases in the feeding procress. The first phase is known as the backgrounding phase, where the weaner calves that are bought from farmers are placed in smaller camps on pastures.
“This is the adaption phase which helps build immunity and offers some social adjustment,” says Dr Philip Oosthuizen, head of research and economics for the Sernick Group.
After the backgrounding phase, weaner calves are moved into the feedlots which is the cattle pen fattening process. This consists of feeding beef cattle a balanced high-maize diet for 130 days within a constricted space. This process is meant to allow the genetics of the livestock to mature fully and minimise weight loss throughout the process.
Starting a feedlot
Dieketseng Lesako, a consultant at GrowthShoot Cattle Investors, explains that it is important to be on an establishment such as a farm that is not too close to urban areas to ensure that full capacity is reached when you start.
She explains, “You need to have space to house 100 cattle, depending on the kind of breed that is adaptable to the area where you are.”
Take into consideration the market that will be catered for and the environment, Lesako advises. “Do a market assessment and see how close are you to the market that you are selling to, which are the abattoirs.”
She says that having the land is vital, but being able to afford the equipment that is required for the business, will also hit your pockets.
“You must have the equipment that you will use, starting with the housing, the handling facility, and things such as scales to be able to track the progress throughout.”
Location and feed
There are a few factors to consider when it comes to location and research is an important component, says Oosthuizen.
“Feedlots are where the grain production hubs are which is primarily in Gauteng, Free State and North West. The idea is we would rather transport the cattle than the grain.”
He adds that there are not many feedlots in provinces such as the Eastern Cape, Western Cape or Northern Cape due to the lack of grain production in the regions.
Knowing which feed to purchase is important for your livestock. Feedlots have an intensive feeding system, so being closer to your feed makes more sense and it is cost-effective.
If it goes beyond the estimated area or province, it makes it difficult to maintain the feeding system. Oosthuizen explains that if the feed is not from the same region, it can affect how cattle could adapt to feedlots because of the different natural pastures and climate.
Operational costs
Going further than 300km from your origin where the feedlot is, will create more problems at the end of the day.
“Everything your cattle are going to eat; you need to deliver to them. There is no natural grazing and so forth, [so] you need to transport your maize and protein supplies,” says Oosthuizen.
“Transport costs are really expensive, whether it is transporting feed [supplies], or transporting weaner or fattened calves, so I think the parameters of 250-300km are a good bet.”
He explains the process as follows: The primary producers are the farmers, they produce weaners, calves, and bulls. Then, at the age of seven months, the weaner calves weighing 240kg, are purchased by feedlots. The weaner calves go through the pen fattening process. After that, the weaner calves are moved over to the abattoir for slaughter before ending up with the consumer.
Oosthuizen says this is called the red meat value chain. “It is important to understand what feedlots need and what the requirements are.”
How the cattle are sold
According to Oosthuizen cattle or weaners are greatly valued at 200-250kg, which are sold mainly through auctions.
“In current years, there is quite a lot of direct purchase from the farmers via the feedlots. Before 1991, a lot of the abattoirs were government regulated, but not anymore.”
When farmers can’t afford their own feedlots, they sell their weaners to commercial feedlots.
“The commercial feedlots industry in South Africa is very strong. It is a very dynamic industry and very easy to sell it directly to the feedlots, or take it to the auction,” says Oosthuizen.
If the farmer does not want to sell their weaner calves and think there are some profit margins, there is a process called a custom feed, he adds.
The process works as follows: The weaner calves are not sold to the feedlots, but instead farmers use the facility by paying a management fee to be able to put the weaner calves through the feedlot system.
“They take them to the abattoir and you get paid for the carcasses that have been slaughtered.”
Though there are options, the condition is that the weaner calves are disease-free when they are put through the feedlots system. “There is a standardised vaccination programme that needs to be followed and the local veterinarian can help with that,” says Oosthuizen.
Challenges and risks
Grain and livestock farmer Clifford Mthimkulu from the Free State says you also have to take various diseases and disease control maintenance into consideration.
Mthimkulu says, “[Due to] foot-and-mouth disease, we could not sell our products. We had to take them out to the camps to cut the costs.”
However, Oosthuizen says not all is lost and you can recoup some money. “You can make a profit out of cattle that are not up to standard if the purchase price is lower, so don’t throw away some of the less-performing feedlots, they have other positives. But if you can get it at a decent price, you can still make money.”
Mthimkulue advises farmers to take heed of the following in the feedlot industry:
- It is an extremely high-risk business.
- Know the head of returns on high volumes.
- It is highly technical in management.
- Nutrition and health are important.
- It is capital-intensive.
- Feedlots are market and quality-specific.
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