Farmers should try to accurately estimate the costs that have gone into raising livestock (per animal) so as to determine the break-even price. From there, the price that will provide a satisfactory return can be determined.
It’s a good idea for producers to follow the markets throughout the year in order to know the best time to sell. Gathering market information can also help make the decision on which class of livestock to produce, based on which class has the largest forecasted growth.
Assessing the Product
Livestock should be presented in a manner that makes them attractive to potential buyers, which expect a certain level of quality. This means offering buyers livestock that are healthy, clean, and of the required weight.
Setting Pricing Goals
Farmers looking to successfully market livestock should set pricing goals, including several target prices for an animal. Farmers can use the information they gathered through estimating costs and researching to come to these target prices. Developing a few target prices helps facilitate the decision making process, resulting in faster sales since the seller has increased negotiating flexibility.
One pricing option available to farmers is booking prices with a forward contract, also called a futures contract. This option comes with some risk, as farmers must produce the livestock that they have agreed to sell at some point in the future at a predetermined price. When booking a price, the delivery method and other specifications are agreed upon simultaneously.
Evaluating the Marketing Plan
The livestock marketing process ends when a sale is made, but the process can always be improved upon. The farmer should select the elements of the marketing plan that worked best for reuse, and retire elements that were impractical or unnecessary. Continually improving the livestock marketing plan will create opportunities for future growth.