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Published byMaximillian Booker Modified over 9 years ago
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Virtual Prairie Feeders Kurtis Sanguin Cory Holeha Brad Dempsey
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Mission Statement Virtual Prairie Feeders is determined to expanding the feeder cattle industry in Saskatchewan by producing uniform, high quality beef animals ready for slaughter, while supporting local industry and keeping money within SK.
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Operations and Human Resources Plan
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Location Yorkton Saskatchewan Selection Based on: –Feed price –Feed supply –Cattle supply
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Description of Operations Pre-purchasing phase –Locate potential feedlots –Negotiate and sign contracts
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Description of Operations Pre-purchasing phase –Locate potential feedlots –Negotiate and sign contracts
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Description of Operations Purchasing to selling phase –Order buyer –Tagging, branding, vaccinating –Market conditions –Weight checks –Herd status checks
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Description of Operations Selling phase: –set up selling price –set up transportation to packers
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Description of Operations Post Selling Phase: –Settle all accounts payable –Transfer funds to T-bills
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Net Working Capital
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Cost of Goods Manufactured
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Organizational Structure
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Marketing Plan Product –High Quality, uniform sized, finished SK steers –1250 lb average finishing weight –Mainly to Western Canadian Beef Packers Inc. Moose Jaw
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Pricing Policy Price takers Indirectly related to –Export market (after packer) –mainly to the U.S –Mexico believed to be a future market Millions $
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Competition Other feedlots Traditionally most of our calves exported
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Competition cont. Sales to packing plants –Alberta has plenty of slaughtering facilities –Worry about in province sales –Other feedlots have history –requires that we produce high quality steers Our Advantages large herd relative to average SK farmer Sell to the packers a promise of up to 10,000 head
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Other Competition Substitutes for beef
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FINANCE PLAN
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Required Financing $12,500,000Total Financing $7,500,000Share Capital $5,000,000Long Term Bank Debt $10,696,083 Total Financing Required
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Financial Assumptions Long-term debt over 10 year period Inflation constant at 2% 5 year average buying and selling cattle prices reflect the highs and lows in cattle cycle No Accounts Receivable, Accounts Payable, or Inventory at year end
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Financial Ratios 6.3%4.8%1.5%ROE 0%27.9%68.6%Debt to Equity 0%21.8%38.1%Debt Ratio 201120072002 Ratio
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Net Income Sensitivity Analysis
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Summary of Financial Results Net Present Value (5,098,618) ) Internal Rate of Return 3.7% 200220072011 Net Cash Flows to Equity (202,057)(60,091) 11,727,696 Net Income111,085444,738738,380
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Conclusions and Recommendations Not Feasible Risk high relative to potential returns Dependant on current market situations –feed, cattle prices, payout to feedlots Too much profit going towards feedlots Recommendations –pay smaller farmers, won’t have to pay going feedlot rate
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