1. Livestock Marketing Systems

2. Livestock Marketing Systems
Livestock must be sold in order for individuals to make an income
The method as to how they are sold depends on several factors
Location of livestock
Type of livestock
Number of animals being sold

3. Types of Marketing Systems
Direct Sale
Terminal Markets
Auction
Electronic Auction
Futures and Hedging
Vertical Integration

4. Direct Sale
Individual sells straight to buyer with no middle person or firm receiving commissions or fees
Works well for selling unique animals and smaller quantities of animals

5. Terminal Markets
Central markets on public stockyards where livestock are consigned to a commission firm to bargain with purchasers or buyers for a certain fee
Works well for large quantities of animals being sold
Takes the hassle out of selling

6. Cattle Stockyard

7. Auction
Public bidding with the animals selling to the buyer who bids the highest
Works well when the need for the animals is local
Can sell small and large quantities of animals

8. Auctioneer/Cattle Auction

9. Electronic Auctions
Same principle as a regular auction however, computers are used to bid on online auctions for livestock
Works well if buyer/seller is located in a region without live auctions
Shipping costs can be very expensive for the animal

10. Online Auction

11. Futures and Hedging
A legal document calling for delivery in the future of livestock, locking in a future delivery price
Companies typically design a contract for the delivery of livestock in advance and lock in a set price at the time of the contract
This also can be done with rare or high priced animals

12. Cattle Futures

13. Vertical Integration
Two or more steps of production, marketing, and processing are linked together; usually by contract producers and manufactures
About 99% of all broilers and a very high percentage of turkeys, laying hens (poultry) and swine are grown and marketed through vertical integration contracts

14. Vertical Integration-Tyson
Genetics
Grow Out
Hatchery
Processing