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.
Case Study Subject
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.
The North American cattle industry now has a secure platform which 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 around cattle 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 is accessible 24 hours a day and on a variety of devices including smart phones. There is also a rating system for both buyers and sellers.
- Bi-directional marketplace to service buyer and seller needs
- NovaFori's fully audited negotiation model with offer and counter-offer rounds
- Negotiation across multiple attributes, not just price
- Post-sale adjustments to account for cattle overage and shrinkage
- Managed dispute resolution mechanism
- Delivery arrangements managed programmatically
- Fully image and video enabled with built in visual editor
- Seller and buyer ratings
- AgriPay integration with clearing and settlement operations