Cattle fattening is a very profitable business, and many people are making money all over the world by starting cattle feedlot business. Cattle pen fattening involves the feeding of beef cattle with a protein balanced, high-energy diet for a period of 90 days under confinement to increase live weights and improve degree of finish and thus obtain better grades at the abattoir. Beef cattle fattening enables the cattle to express fully their genetic potential for growth. Cattle fattening is not only a lucrative business but also plays a vital role in meeting the ever-growing global demand for high-quality beef. As populations continue to rise, particularly in urban areas, the demand for beef as a primary source of protein remains strong. This presents a golden opportunity for aspiring cattle farmers to step into the industry and contribute to the supply of premium-quality beef products.
To build a successful, sustainable cattle fattening livestock business, you require sufficient knowledge of how to efficiently do cattle pen fattening i.e cattle fattening techniques, good management skills, and a good cattle feedlot business plan. This article will outline how to start cattle fattening business, and the cattle pen fattening business plan-PDF, Word, Excel.
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Market research is a pivotal step in the journey of starting a cattle fattening business. As an integral part of market research, selecting the appropriate cattle breed is a critical decision that hinges on various factors. Researching the suitability of different breeds is imperative, taking into account factors such as the availability of specific breeds in your region, their feed conversion efficiency, the cost to acquire them, and alignment with market demands. Each breed comes with its unique characteristics, and the choice must be made strategically to optimize profitability and meet consumer preferences. Assessing your supply chain is critical. Consider the availability and cost of inputs such as cattle feed, veterinary services, and transportation. A reliable supply chain is fundamental to the success of your cattle fattening operation, ensuring a consistent and cost-effective production process.
Comprehending the pricing dynamics of various beef grades within your target market is pivotal. This entails delving into the pricing structures of different grades of beef, discerning the preferences of potential customers, and recognizing the seasonality of cattle and beef prices. By gaining insights into these aspects, you can fine-tune your pricing strategy to align with market expectations, cater to specific consumer preferences, and navigate the fluctuations in cattle and beef prices effectively. Market research should also encompass economic feasibility. Calculate your initial investment requirements and estimate operating expenses. Develop financial projections to determine the profitability of your venture. This financial insight will not only aid in securing funding but also guide decisions regarding the scale and scope of your cattle fattening business.
Cattle Fattening Business Model
The cattle fattening business model is a structured approach that revolves around the purchase, management, and strategic feeding of cattle to enhance their weight and beef quality over a 90-day period. This meticulous process serves as the cornerstone for generating profits in this business. As the cattle undergo this feeding regimen, they experience a substantial increase in both weight and grade, resulting in higher-value beef. The crux of profitability lies in the fact that the revenue derived from selling these well-fattened cattle significantly surpasses the initial costs of purchasing the livestock, along with the expenses incurred for feeding and operational needs. This substantial revenue surplus serves as the primary source of profit, and by repeating this cycle consistently throughout the year, cattle farmers can ensure a steady and reliable stream of income.
By adhering to this cattle fattening model, farmers can harness the economic potential of efficiently converting cattle into high-quality beef. The 90-day timeframe allows for a well-defined production cycle, which aids in managing costs, optimizing resources, and ensuring a consistent supply of market-ready cattle. This business model not only offers a lucrative opportunity for farmers but also contributes to meeting the ever-growing demand for premium beef products, making it a compelling and sustainable venture within the agricultural sector.
Land For Cattle Fattening
The decision of where to locate your cattle feedlots is very important so as to ensure economic viability of the cattle fattening business. Important factors to consider when choosing land for your cattle feedlot business include : availability of cheap labour, proximity to market & to sources of feed, prevailing climatic conditions as well as good road networks. Other factors to consider include : the land should be suitable for construction of cattle feedlots, availability of water supply, low risk of flooding or veld fire and it should be a distance away from residential or industrials areas to avoid causing noise and dust pollution to those areas. The recommended land for cattle feedlots should have a slope of 2-5%, and the soil with 25% or more clay is better as compared to sand. There should be a reliable source of clean water that can be used for both human and cattle consumption. Possible water sources for the cattle feedlot farm include boreholes, rivers and dams. In case of inadequate water source, water tanks can be installed.
Cattle Feedlot Housing
The cattle feedlot business model requires keeping and raising the cattle in confined areas. Feed and water is brought to the cattle rather than the cattle grazing or seeking pasture. Feedlots are actually concentrated cattle feeding operations. The cattle feedlot pens are confined yard areas where the cattle are completely hand or mechanically fed for the purpose of beef fattening. The reason why the cattle are fed under confinement is to prevent loss of energy through movement. Cattle feedlot housing should have the following features : protect the cattle against adverse weather conditions, offer easy access to water & feed, allow efficient collection of cattle manure, offer freedom of cattle movement and provide natural ventilation and lighting. The feedlot pens can be constructed using timber frames. Cattle feedlots housing are usually open sided. The cattle fattening pens should allocate 5-10 square meters per each cattle. The floors of the cattle fattening pens should be smooth and not slippery. Roofing is usually not necessary except to cover feeding equipment so as to prevent the feed from getting wet when its raining. The costs of constructing the cattle pens should be included in the cattle pen fattening business plan.
Equipment for Cattle Fattening Business
Essential equipment for cattle pen fattening operations include feeding equipment and drinking equipment. Feeding equipment may be fixed inbuilt within the cattle pen structure. They can also be in the form of self-feeders which can be moved around within the pens. Self-feeders are usually more suitable for small cattle fattening operations. Large commercial feedlot operations use feed bunks/feed troughs which are fixed and inbuilt close to the edge of the cattle pens. The feed troughs usually run the entire length of the cattle pen to provide easy access to food. Similarly, cattle drinking equipment may also be in the form of movable drinkers, or it can be in the form of fixed inbuilt water troughs at the edge of cattle pens. Whichever type of equipment that you use, you should ensure that the equipment provides easy access of water and feed to the cattle. The cattle feedlot business plan should include the costs of the required equipment.
Selecting Cattle for Fattening
You need the cattle to feed in order to start cattle beef fattening business. There are two options, either you use cattle from your own herd, or you purchase the cattle from other farmers. You have to be careful when buying cattle to use for cattle pen fattening. If you choose cattle which are not suitable for feedlot fattening, you will be in a financial loss before you even start the cattle feedlot operation. Important factors to consider when choosing cattle for fattening include : breed of cattle, age, gender and maturity type. Some breeds of cattle are more suitable for cattle pen fattening as compared to others – this is because those cattle breeds gain more weight faster with less feed. Some of the popular cattle breeds used for cattle feedlot fattening include the Brahman, Angus, Limousin and Hereford among others. Native cattle breeds can also be used successfully for cattle feedlot fattening. Money to buy cattle must be available at all times. A lack of funds to buy the cattle for beef fattening when prices are favorable is a lost opportunity to make a profit. Your cattle feedlot business plan should cater for money for buying the cattle.
Feed And Nutrition
It’s very essential that you give the right quantity and type of feed to your cattle. The success of your cattle fattening business depends on the ability of the cattle to gain weight and to produce high quality beef. These factors are affected by the quality and quantity of feed. The proper feeding techniques will ensure that the cattle will grow and utilize the feed efficiently and produce good quality beef. This will maximize your profits of the cattle fattening farming business. Failing to properly feed the cattle will lead to losses. The losses will be due to failure to meet the target slaughter weights and beef quality grade.
There are companies which sell cattle fattening stock feeds. These are complete, balanced feeds, which are designed for fattening cattle in feedlots over 90 days. The stock feeds are high energy fattening meals which contain all the nutrients necessary for ad lib cattle pen fattening. You can also make your own home made cattle beef fattening feeds. The amount of feed consumed by the cattle daily will depend on factors such as live weight and age of the cattle. Normally, it averages between 8-15kg per head per day or 3.4% of a steer’s live mass per day. The average daily weight gain at 350Kg live mass is about 1.6Kg.
When you sell your cattle to the abattoir or butcher, they will slaughter it and grade the beef according to its quality. Beef is graded in two ways: quality grades for tenderness, juiciness and flavor; and yield grades for the amount of usable lean meat on the carcass. After fattening cattle in feedlots for 90 days, its beef should fetch the highest quality grade. This grade is usually called Prime beef or Super beef. This is the beef which fetches the highest price on the market. The purpose of cattle fattening is to increase the weight of the cattle over 90 days (more weight, more money when you sell) and to increase the quality of the beef (higher grade of beef, more money when you sell).
Health & Disease Management
Health and disease management is a paramount aspect of running a successful cattle fattening business. Ensuring the well-being of your cattle not only promotes their growth and overall performance but also safeguards your investment. Regular health checks and preventive measures are essential to mitigate the risks associated with diseases that can adversely affect your herd. This includes vaccinations, deworming, and providing proper nutrition to boost their immune systems. Additionally, maintaining a clean and well-ventilated environment in the feedlots is crucial to minimize stress and the spread of diseases among the cattle.
In the event of illness outbreaks, prompt diagnosis and treatment are imperative. Collaborating with a veterinarian who specializes in cattle health is advisable, as they can provide guidance on disease prevention and management strategies. Moreover, implementing a robust biosecurity protocol can help prevent the introduction of diseases to your herd, further ensuring the health and productivity of your cattle. A proactive approach to health and disease management not only safeguards your cattle but also contributes to the reputation and long-term success of your cattle fattening business within the industry.
Management and Labour
You need farm workers who will be responsible for taking care of the cattle. Their duties include : feeding the cattle, monitoring the health of the cattle, cleaning the cattle feedlot pens, carrying out maintenance work at the cattle farm, providing medical care to the cattle where necessary, maintaining accurate cattle records and other cattle farm duties. The number of required farm makers will depend on the size of the feedlot. For large cattle feedlots, full time sales, marketing, accounting and security staff may be required. There is need for good technical knowledge of cattle fattening techniques for success in the feedlot business, and good management skills. You need to understand the techniques of effectively raising cattle for beef. Some farmers don’t take farming as a business, thus they will never be successful, as they don’t properly manage it.
Capital for Cattle Feedlot Business
You obviously require money in order to start the cattle feedlot business. The capital that you need to start the cattle fattening business will depend on the size of your feedlot operation. Obviously a 500 head cattle feedlot operation will require significant capital as compared to a 20 head cattle fattening business. The major expenses when starting a cattle fattening business are feedlot construction costs, costs of purchasing the cattle to fatten as well as stock feed costs. There are various source of funds to use for starting this business, they include loans from banks, money from your savings, government grants and well as investment from equity investors. If you plan to raise capital from investors or to apply for a loan from the banks, then you need a good cattle fattening project proposal. Don’t have access to capital? Start small, and grow your cattle fattening business overtime! The feedlot business is very profitable, so if you reinvest the profits you get, you can quickly grow your business. You will require a good cattle fattening business plan to guide you in your feedlot business.
The market for beef is very huge and is ever increasing. The annual global demand of beef is 75 million tonnes. That’s a lot! You can supply your cattle/beef to individual households, butchers, auctions, farmers, schools, restaurants, companies, supermarkets, organizations, events, abattoirs etc. You can sell your cattle as live cattle or you can slaughter and sell the beef.
The export market for beef is also very huge! As you grow your business you will be able to export the beef to other countries. The largest importers of beef are Russia, United States of America, Japan, China, South Korea, European Union, Hong Kong, Egypt, Canada, Chile and Malaysia. Currently, the top producers of beef are United States of America, Brazil, European Union, China, India, Argentina, Australia, Mexico, Pakistan, Turkey and Russia.
Profitability of Cattle Fattening Business
Cattle beef fattening is very profitable when done the right way. The profitability of the cattle fattening farming business depends on the buying price of the cattle, cost of the feed, price margin, feed margin, feed conversion efficiency ratio, unit cost per KG when selling. It is important that you understand the mentioned margins and conversion ratios before you start this livestock business.
When you understand these margins and ratios, then you can easily calculate how much profit you will get buy buying and fattening the cattle at a specific price. Thus you will make an informed decision of whether the price at which you are buying the cattle for is profitable for beef fattening purposes. The maximum price payable for the cattle must be calculated before you start the beef fattening business. It is easy to make a financial loss before fattening even starts by paying too much for the cattle. All those factors are clearly explained in our cattle fattening farming business plan.
Advantages of Cattle Fattening Business
The cattle fattening business offers a host of compelling advantages that make it an attractive venture within the agricultural sector. Foremost among these benefits is the potential for lucrative returns. By efficiently converting purchased cattle into higher-value beef over a relatively short period, farmers can realize substantial profits. The revenue generated from selling well-fattened cattle surpasses the initial purchase and operational costs, making it a financially rewarding endeavor. This profitability is particularly appealing for those seeking a sustainable and profitable agricultural business.
Moreover, cattle fattening follows a predictable production cycle, typically lasting around 90 days. This predictability allows farmers to plan and manage resources effectively, from feed procurement to marketing strategies. The cyclic nature of the business ensures a consistent stream of income throughout the year, providing financial stability and reducing the uncertainties often associated with agriculture.
Additionally, the global demand for high-quality beef remains strong, making the cattle fattening business strategically advantageous. As populations grow and consumer preferences evolve, the need for premium beef products continues to rise. Farmers can tap into this demand by producing well-fattened cattle that meet market requirements and command competitive prices. This not only contributes to financial success but also positions the cattle fattening business as a key player in ensuring food security by supplying a consistent and readily available source of high-quality protein, making a positive impact on local and regional food systems.
Why You Need A Cattle Fattening Business Plan
A well-structured and comprehensive business plan is an indispensable tool for anyone looking to venture into the cattle fattening business. It serves as a roadmap that outlines your business objectives, strategies, and the necessary steps to achieve your goals. This clarity of purpose helps you stay focused and ensures that every decision you make aligns with your long-term vision for the business.
Moreover, a business plan includes detailed financial projections, including startup costs, operating expenses, revenue forecasts, and potential sources of funding. One of the primary roles of a business plan is to help entrepreneurs calculate the potential return on their investment. It outlines the expected revenue generated from the sale of fattened cattle and compares it to the total costs involved in purchasing, feeding, and managing the cattle. This comprehensive financial analysis allows prospective cattle farmers to gauge whether the business is likely to be profitable and, if so, the magnitude of the expected profit. This financial information is crucial for understanding the financial feasibility of your business and securing investment if needed.
Additionally, a well-constructed business plan helps you identify potential risks and challenges that may arise during the course of your cattle fattening operations. By recognizing these risks upfront, you can develop strategies to mitigate them, enhancing the resilience and sustainability of your business. Your business plan also serves as a guide for day-to-day operations, outlining the procedures and processes necessary for the successful management of your cattle, including feeding, healthcare, and record-keeping. It ensures consistency and efficiency in your operations, laying the foundation for long-term success.
Whether you plan to seek financing from investors or lenders or are simply looking to manage your cattle fattening business effectively, a well-prepared business plan demonstrates your commitment and professionalism. It instills confidence in potential stakeholders by showcasing your understanding of the industry and your ability to navigate and thrive in the cattle fattening business.
Pre-Written Cattle Fattening Farming Business Plan – PDF, Word And Excel: Comprehensive Version, Short Funding/Bank Loan Version and Automated Financial Statements
For an in-depth analysis of the cattle fattening farming business, we encourage you to purchase our well-researched and comprehensive cattle fattening business plan. We introduced the cattle fattening business plan after discovering that many were venturing into the cattle fattening farming business without enough knowledge and understanding of how to run the business, how to keep the cattle, lack of understanding of the financial side of the business, lack of understanding of : the industry, the risks involved , costs and profitability of the business; which often leads to disastrous losses.
The StartupBiz Global business plan will make it easier for you to launch and run your cattle fattening business successfully, fully knowing what you are going into, and what’s needed to succeed in the business. It will be easier to plan and budget as you will be aware of all the costs involved in setting up and running the cattle beef fattening business.
Uses of the Cattle Fattening Business Plan – PDF, Word And Excel
The Cattle fattening business plan can be used for many purposes including:
- Raising capital from investors/friends/relatives
- Applying for a bank loan
- Start-up guide to launch your cattle fattening farming business
- As a cattle fattening project proposal
- Assessing profitability of the cattle fattening business
- Finding a business partner
- Assessing the initial start-up costs so that you know how much to save
- Manual for current business owners to help in business and strategy formulation
Contents of the Cattle Fattening Business Plan – PDF, Word And Excel
The business plan include, but not limited to:
- Marketing Strategy
- Financial Statements (monthly cash flow projections, income statements, cash flow statements, balance sheets, break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortization)
- Risk Analysis
- SWOT & PEST Analysis
- Industry Analysis
- Market Analysis
- Operational Requirements (Including technical aspects of how to raise beef cattle, feed requirements etc)
- Operational Strategy
- Why some people in cattle fattening business fail, so that you can avoid their mistakes
- Ways to raise capital to start your cattle fattening business
The Pre-written Cattle Fattening Business Plan package consist of 4 files
- Cattle Fattening Business Plan – PDF file (Comprehensive Version – 77 Pages)
- Cattle Fattening Business Plan – Editable Word File (Comprehensive Version – 77 Pages)
- Cattle Fattening Business Plan Funding/Bank Loan Version- Editable Word File (Short version for applying for a loan/funding – 45 pages)
- Cattle Fattening Business Plan Automated Financial Statements – (Editable Excel File)
The business plan can be used in any country and can be easily edited. The financial statements are automated. This implies that you can change eg the number of cattle, selling price of the beef etc, and all the other financial statements will automatically adjust to reflect the change.
Click below to download the Contents Page of the Cattle fattening Business Plan (PDF)
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Cattle Fattening Business Frequently Asked Questions
What is needed for cattle fattening?
Three most important things required for cattle fattening business are cattle, feed and market. You start with beef cattle that you feed under confinement over a period of 90 days after which you sell them to the market. A good cattle fattening business plan is also required before venturing into this business.
What cattle business is most profitable?
Cattle fattening business is more profitable than other types of cattle businesses like cattle ranching, cattle breeding and dairy cattle farming. Cattle fattening also brings returns quicker as it is done over a period of 90 days.
How long does it take to fatten a cow?
When doing intensive cattle fattening, it takes up to 90 days to fatten a cow. However it may take upto a year to fatten a cow when you are doing cattle ranching whereby the cattle will be grazing.
What breed of cattle gain weight the fastest?
Pure breeds of beef cattle are the ones which gain weight the fastest. Some examples of good breeds for cattle fattening include Brahman, Angus, Shorthorns, Limousin, Beefmaster and Hereford among others. Native cattle breeds can also be used successfully for cattle feedlot fattening.
How much space do feedlot cattle need?
Feedlot cattle need 5-10 square metres per head. This space ensures that the cattle have freedom of movement and enables easy access to feed and water. Feedlot cattle should not be crowded in a small space as that is not good for their health and growth.
Are feedlots profitable?
Cattle fattening feedlot is a very profitable business with a quick return to investment. You will start getting profits from the cattle fattening business after only 90 days. However to be profitable in the feedlot business, you should choose the right type of cattle, adequately feed the cattle with affordable feed, and have a ready market which offers good prices. It’s also important that you get a good feedlot business plan so that you understand factors which affect the profitability of the cattle fattening business.
What are the advantages of cattle fattening business?
One of the major advantages of cattle fattening business is that you get money quickly – after only 3 months, unlike for cattle breeding where you have to wait for 1 year to start making money. Cattle fattening also require less space as the cattle won’t be grazing, they will be housed all the time.
What is the business model of cattle fattening?
The business model of cattle fattening involves purchasing cattle and feeding them over a period of 90 days, thereby increasing the beef grade of the cattle and weight of the cattle thus producing profits at the time of the sale. This is a very straight forward business model which just requires adequate knowledge of cattle fattening techniques.
Where do feedlots get their feed?
Feedlots can either use commercial stock feeds purchased from stock feed suppliers or farm-made feeds which they make on their own. For large scale feedlot operations, farm made feed is usually cheaper, but it requires adequate feed making knowledge so as to ensure that the cattle get all the required nutrients.
How much do feedlot cattle gain per day?
The weight gained by feedlot cattle depends on the amount of feed given and the feed-conversion ratio. The feedlot cattle daily weight gain is usually between 1.2Kg – 1.8Kg.