Think of it as eBay for cattle. An oversimplification yes, but that image is a good starting point to understanding how the new trading platform, AgriClear, will perform.
A seller has a load of feeder calves. A buyer wants a load of feeder calves. The two make a deal over the AgriClear platform. Buyer deposits the agreed-on purchase price with AgriClear; seller is notified the money is now on hold. Seller ships calves. With delivery complete, and confirmations given that the contract has been met, funds transfer to the seller.
So why does the cattle industry need this? That's something Nevil Speer has some clear answers for, having worked for a little over a year toward the launch. The platform, which just went live June 16, is a way, says Speer, to "empower" both buyers and sellers in today's cattle market.
"We talk about it as cattle marketing on your terms. It's a way to leverage technology to get a broader network of buyers and sellers connected on a one-to-one basis. Then there is the fact that payment is assured before the seller ever loads up one animal," said Speer.
Sellers don't ship till funds for the sale are in AgriClear's custodial account. Speer said not only does this protect a seller from not being paid at all, but it also reduces the float that can occur in the business.
"That is hugely important," he said. "So much capital is at risk in this market. It's nothing for a load of cattle to be worth more than $100,000. And we [cattle producers] ship them hoping the check comes back."
Speer stressed AgriClear is not an auction site, and explained the platform does not represent either side of the transaction. Buyers and sellers negotiate one to one, there is no time limit, participants can create their own market terms, and either side can pull out and start negotiations with someone else if they are not satisfied with the terms.
Less than two weeks into the launch, AgriClear had some 100 user registrations. There is no fee to register. The cost comes at the point of sale, when both seller and buyer pay $6 per head traded over the platform. AgriClear is bonded and licensed as a marketing agency under the USDA's Packers and Stockyards Act.
AgriClear runs on Android and Mac computers. The platform is relatively mobile friendly, adds Speer, so it will work on a mobile phone or tablet.
The patent-pending business has offices in Calgary, Texas, Kentucky and Colorado. Both U.S. and Canadian cattle will be traded on the platform, which is part of TMX Group and NGX. For more information, or to have an AgriClear rep visit, go to agriclear.com or call 1-844-AGRICLR.
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