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What We Do

Our Investment Approach

 

The investor purchases and owns cattle which will reside at the Growthshoot’s (the farmer) cattle breeding farm. The breeding stock is reared to produce calves (weaners) of which are sold for income. There are ongoing costs for the upkeep and maintenance of the breeding cattle, which the investor pays to the farmer.

The return of the investment is calculated taking into account the following variables;

 

  • The value of the breeding cattle, which follows the beef market price,

  • The income from the sales of the calves, which follows the calf market price,

  • Less all the ongoing costs incurred.

Underlying Price

 

Cattle / beef prices in SA have been increasing for more than a decade, year on year, due to the increasing of demand for protein with the growth of the middle class. However, the price fluctuates up and down from season to season through the year. The prices tend to peak during major country holidays such as Easter and Christmas when the consumer demand is high. The prices tend to be more depressed during seasons such as winter when farms have less grazing feed, which makes it costlier to maintain the cattle and so forces many farmers to sell. This creates an influx of beef in the market and thus decreases the price.

Cattle Breeding Methodology

 

The breeding stock consists of many female cows and a few male bulls who mate to produce calves. The calves are sold for income, if they are males, and if they are females can be either sold or added to the herd to become part of the breeding stock. The breeding cow’s gestation period (pregnancy) lasts for 9 months and when the calf is born it is nursed by the mother for at least 6 to 7 months. After giving birth, the cow is given 3 months of rest time until it is ready to mate again.