Of the 100 million population head of beef cattle in North America, the majority continue to be sold through physical auction or directly from seller to buyer. These traditional trade mechanisms present a number of challenges to this enormous industry. These 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, a subsidiary of TMX Group, recognised the clear requirement 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 Perfect Channel 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 transaction and payment service. The platform had to be secure and include an online registration process, together with the full portability expected by producers not tied to an office. The terms under which a counter party can negotiate can change from transaction to transaction, and the listings had to be easy to navigate.
Key features include:
- Single site to cater for Wanted and For Sale listings
- Fully audited negotiation mechanism with offer and counter-offer rounds
- Negotiation across multiple attributes, not just price
- Managed dispute resolution mechanism
- Delivery arrangements managed programmatically
- Seller and buyer ratings
- Live chat
- Integration with clearing and settlement operations of NGX
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 a system powered by NGX until the cattle has 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.