A 21st century approach to North American cattle trading - digitising an analogue agricultural market.
The majority of the beef cattle population in the North American region is sold through physical auctions or directly from seller to buyer. These traditional trade mechanisms present a number of challenges to this enormous industry. The problems include the high cost of physical auctions, both in terms of auction and transport fees, and the increased risk of disease and undue stress on animals caused by transporting them to a sale. In addition, counterparty risk and payment assurance has afflicted the industry since inception.
Despite these clear challenges, there has been limited evolution towards a digitised approach to trade. However, AgriClear recognised the clear need from both buyers and sellers of cattle to create a mechanism which would introduce efficiencies in the trading process and reduce counterparty risk.
AgriClear selected NovaFori to build an online cattle trading platform. It was specifically designed to provide U.S. and Canadian cattle buyers and sellers with an efficient, cost-effective trading and payment service. The main requirements of the platform included security, an online registration process, together with full portability expected by producers, so they are not physically tied to an office. The terms under which a counterparty can negotiate needed to have the flexibility to change from transaction to transaction, and the listings had to be easy to navigate.
The platform built for the North American cattle industry is highly secure, and enables users to search for cattle with certain attributes, post listings to buy or sell cattle, negotiate on price, arrange delivery details and settle disputes that do not meet contract terms. Transactions created in the platform are held in the system until the cattle have been delivered and inspected by the buyer. The platform can be accessible 24 hours a day on a variety of devices including smart phones. Finally, there is also a rating system for both buyers and sellers.