Frequently Asked Questions
The BSM (Beef-Stock Market) is a revolutionary and exciting new concept. Some commonly
asked questions and their answers follow. If you have any additional questions please
contact Amber, the BSM administrator, by sending an email to
admin @ beefstockmarket.com.au
Questions:
What do you anticipate to be the average purchase price of cattle and how do you
buy?
If today’s Queensland per kilogram buy price is
$1.76
Inc. GST and assuming the animals are around 220kg, a typical buy price for one
animal would be around
$387.20AUD Inc. GST.
The buy price is generally the actual price BSM professional buyers have paid for
the stock at the cattle sale plus transport and identification costs.
To buy cattle for the first time go to www.beefstockmarket.com.au and click on the
BUY NOW tab. For purchases subsequent to the first approved order, clients can log
into their personal PORTFOLIO PAGE and ADD TO PORTFOLIO.
BSM Gold members also have the option to give BSM authority to
purchase cattle on their behalf as a buyer’s agent with allocated funds.
BSM Beef Pty Ltd owns the cattle when a client buys them. The BSM
system is designed to allocate cattle (from lightest to heaviest) to clients as
close as possible to the value requested on a weight basis. If a client were to
nominate that they wish to spend $10,000; cattle are automatically selected to get
as close as possible to that value (without exceeding the value). An official tax
invoice is generated which lists the actual animal/s individual electronic identification
number/s, weight/s and description/breeds. Buyers are given two working days to
transfer payment funds (usually by BPAY).
The Purchase Process:
- Click on the BUY NOW! button on any page of the BSM Web Site.
- Read and agree to the TERMS
AND CONDITIONS OF SALE including the direct debit authority.
- Fill out your contact details and the account details where you would like
your proceeds paid into and all other requirements in the REGISTRATION ORDER FORM.
- Print the Tax Invoice/Receipt and make the payment for purchase of required
cattle within the next two working days by using the supplied BPAY reference number
and the biller code.
- You will be e-mailed within 7 days (from the date of receipt of your order)
confirming receipt of your funds.
- Upon filling your order, you are allocated with the number of animal/s whose present
combined value comes closest to your intended purchase amount as stated in your
REGISTRATION AND ORDER FORM.(Subject to our TERMS AND CONDITIONS OF CATTLE PURCHASE,
MANAGEMENT AND SALE).
You can only purchase a whole animal. If the amount you state in the registration
form does not allow you to buy a whole animal, BSM will only supply
you with the number of whole animals that can be purchased for the amount you wish
to spend.
Once your order has been accepted by us, you will receive an invoice followed by
confirmation of purchase within seven days of receiving your payment.
Following payment, you can log into your own personal page and view your LIVESTOCK
PORTFOLIO. To buy more stock you can use the ADD TO PORTFOLIO function in your personal
page rather than having to re-register.
The breed of steers offered to customers will depend on supply however they are
of high quality and are suitable for premium target end-markets. The animals will
generally be weaner steers inducted typically at an average of 250kg and expelled
(sold out) at generally 450kg if in a finished (fat) condition. Cattle are sourced
by professional buyers and the costs of buying, transporting and inducting is included
in the purchase price.
Clients can see weight gains and progressive real-time portfolio values within their
ONLINE LIVESTOCK PORTFOLIO. Until cattle get close to sale time, this value will
usually be lower than the purchase value (as it is calculated on finished cattle
per kg rates – remember heavier cattle, generally are worth less per kilogram than
lighter stock). The weights and values are a guide only. Should a client be GST
registered and have bought a total of 20 or more head, they will be given the option
for a BSM Gold login.
You also have the option of receiving monthly reports on weight gain, paddock condition,
rainfall, and market trends emailed to you by the livestock manager. By using electronic
identification, stock progress is monitored throughout the time you own them.
How are cattle prices on the BSM website determined?
You can purchase one or an entire herd of beef cattle through the Beef Stock Market
website. Cattle purchase prices are derived from the price stock are purchased for
plus any costs associated with getting livestock to the contracted farm and inducting
them. Sale prices are the price BSM can secure the cattle as an agent for you. Unfinished
cattle are sold back to BSM at a lower price with no commission.
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Our “welcome” page quotes three prices:
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Buy Price
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The price per kilogram at which you can purchase cattle
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Indicative Unfinished
Sell Price
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The price per kilogram for which cattle can be sold outside the period in which
the livestock manager suggests it be sold.
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Indicative Finished
Sell Price
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The price per kilogram for which cattle can be sold when the livestock manager suggests.
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Prices are all in Australian dollars ($AUD) and are revised weekly. The quoted prices
include GST, transport costs, electronic identification, induction and expulsion
costs.
Note: Non-GST registered buyers have a pricing structure that reflects
the actual amounts after GST has been taken into consideration by BSM, its suppliers
and customers (who are all GST registered).
What are the Beef Stock Market fees and charges?
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During ownership:
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Grazing Fees
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$1.15/kg gained.
(Only payable after a live weight update.)
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At sale time:
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Agent's Commission
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4% of the full sale amount
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Compulsory Industry Levy
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$5/head
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Other Marketing & Transport Costs
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Varies
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Sales fees are automatically deducted from your sale proceeds. You may also be liable
for additional veterinary expenses should one of your animals become ill. You will
be notified should this occur.
What is backgrounding?
Backgrounding is the term used within the cattle industry to describe the process
of ‘growing out’ cattle or ‘preparing’ them for entry into a feedlot market. Backgrounding
is different from agistment in that payment is determined by the amount of kilograms
that the animal gains rather than a per week rate.
Show me a return example
Please see our returns page for an example based on live
prices and current BSM averages.
Do I have to be GST registered to buy?
No, anyone can own cattle. Clients who are ABN holders and are GST registered do
however have the advantage of being able to claim back tax credits on the purchase
price of stock and all grazing costs as well as receiving a sell price that incorporates
GST as they are selling as a GST registered supplier to GST registered buyers. More
explanation can be found on this on the website or speak with a tax advisor or accountant.
To obtain BSM Gold status, cattle owners must be GST registered.
Why is the 'Selling Today?' finished price lower than the 'Buying Today?' buy price?
The buy price quoted on the BSM homepage is the price for cattle in the 180-250kg
weight range. The sell price is for cattle in the 380-450kg weight range. It is
normal in the cattle industry for lighter, younger animals to be worth more per
kilo than heavier older animals. Cattle owners make their money by the kilos that
the animals put on. The buy and sell prices do affect your ultimate return but it
is the weight gain that is the most important factor. It is possible that when your
cattle are ultimately sold that the finished price per kilo may be higher than the
per kilo buy price you paid.
The buy price is relevant to you if you are buying cattle today, the finished price
isn’t as you will be selling your animals in about 6-12 months and the finished
price then is likely to be different to what it is today. Likewise, the finished
price quoted is for cattle that have been in the BSM system for the time it has
taken them to put on the desired weight gain (and right condition). It is only relevant
to you if your cattle are in the target weight gain category.
What do you expect to sell the cattle for?
All prices move with the market. The Sell Priceis the actual price BSM is able to
sell the stock for less a fee for the transportation of the cattle to the final
destination and any additional fees associated with selling at the market. By opting
to use BSM’s complimentary management service, the cattle are sold in optimum condition
at the Finished Sell Price. To receive the maximum return, you must be a GST registered
ABN holder. Non-GST clients have a different rate as BSM sells cattle to other GST
registered businesses.
The Sell Prices that are listed on the website when a buyer purchases cattle do
not necessarily reflect what an owner will receive for cattle when they sell their
cattle in time. Generally, Sell Prices are affected by weather and market factors.
Finished cattle are usually sold into a feed-on market (feedlot) typically at around
400–500kg. On occasion the livestock manager may sell earlier or later to maximise
returns for owners or to minimise risk if heading into seasonal or market uncertainty.
In predicting future movements in the market you can use sources such as the links
found on the site (weather and industry). You could also investigate cattle futures
for hedging your bets. At sale time BSM Beef is acting as your agent and as such
you are paid from sale proceeds deposited by the buyer into our trust account.
How long will I own the cattle before I sell?
A client can opt to sell stock at any time for an Unfinished Sell Price. For the
best result, it is suggested that clients opt to use BSM’s COMPLIMENTARY MANAGEMENT
SERVICE and ensure they receive the Finished Sell Price. The state livestock manager
can then assess the weight and condition of the animal to market it effectively.
The animals usually need to put on at least 150kg in the BSM system to get to a
saleable weight then seasonal conditions decide their condition (fat cover). In
good conditions stock will put on up to or over 1kg/day on grass. WA and Victoria
on irrigation may even perform better than this. In dry conditions this could fall
to 0.1–0.4kg/day. Yearly averages on grower properties in Queensland are currently
at approximately 0.65kg/day with Victoria averaging over 1kg/day. Turn around time
could be as little as 6 months or as much as 12 months depending on the season.
It is in the interests of BSM contract growers to have the cattle gaining weight
well as they are remunerated on a weight gained basis. As a cattle owner, clients
only pay for the weight gained. By buying in less favorable seasonal conditions,
buyers may also benefit from a lower purchase price. It is very important to understand
that cattle are individuals and as such, the rate of weight gained will differ between
animals. This is normal.
What are the estimated costs of feed, maintenance, supervision etc?
Cattle are grown out on a variety of pastures. Some supplementation may also take
place. The only cost for feed, maintenance, supervision, and basic husbandry is
the per kilogram Grazing Fee which is direct debited each time your cattle are weighed
at the paddock. Presently, this fee is $1.15/kg Inc. GST. Transport costs, induction
and sale expenses are built into the quoted buy and sell prices. Additional vet
charges could occur should an infection have to be treated. This is rare but has
been accounted for in the contracts.
What are the risks?
The stock you buy are actually identified as belonging to you. If it is unfortunate
enough to die, you the owner carry that risk as there is not a refund for the amount
outlaid. It is possible to insure against death, however the rate of death expected
in most fattening situations is under 1%.
Other risks that will lower your possible investment return include falls in beef
prices, drought and other natural disasters, injury leading to decreased weight
gain or disease such as 3 day sickness which decreases average weight gain. In addition,
if your animal requires veterinary attention, you as the cattle owner will be responsible
for the costs.
As the Beef Stock Market charges a weight based Grazing Fee, it is in our interest
to minimise these risks, however it is important to highlight that no guarantee
exists to cover the stock owner. In the case of death or serious illness or disease,
or where veterinary attention may be required you will be notified by email. Insurance
will soon be available through BSM Gold.
How do you know the exact weight at the time of purchase or sale?
Obviously not all stock will have been weighed at the day of purchase. Under clause
4.2 of the Terms and Conditions of Cattle Purchase Management and Sale, the Livestock
Manager with the aid of his electronic tracking system, is able to estimate the
present weight with reasonable accuracy. Years of statistical data gives an expected
weight gain for the time of year in which the purchase occurs, and this weight gain
is continually added to the last recorded weighing of the animal which usually occurs
daily.
Purchase time: At induction, all weights are adjusted on an individual basis back
to the weight they were at the official weigh station. This correction to the inducted
weight ensures BSM Beef Pty. Ltd. is selling cattle on the same basis they were
purchased on. Correcting weights back to purchase weight also makes the system fair
for contracted "backgrounders" whose subsequent weighings and payments
are based on a "Shrunk Weight". Obviously not all stock will have been
weighed on the day a buyer was to purchase them. Should some time elapse between
arrival and induction and the purchase, estimated daily gains are used in conjunction
with an electronic tracking system to keep real time weights statistically accurate
on any particular day.
Sale time: At sale, all cattle being sold are weighed before being delivered to
the buyer. Again these individual weights are adjusted to the weight the sale is
based on, often this is at an official weigh facility. The final adjusted individual
weights is what all fees, charges and proceeds are based on.
Intermediate weighings: Although BSM's unique system acts as a guide in keeping
weights real-time, cattle are still weighed from time to time to adjust estimates
to real weights. With animal welfare in mind and in an effort to reduce handling
stress, BSM uses a shrink policy so cattle do not have to be weighed fully "shrunk".
This is an equation based on the number of hours off feed as a percentage loss of
weight (up to 6%). It is at these intermediate weighings that your grazing fee ($1.15/kg
gained) is worked out and direct debited from your selected bank account. Intermediate
weighings are not of vital importance for buying or selling purposes but are provided
to give you an estimate of how your individual animal(s) are performing.
How does the electronic identification and monitoring work?
As soon as cattle are purchased they are processed through the cattle yards to be
weighed. An electronic tag with a unique number enables individual identification.
This tag identifies the particular animal each time it is weighed. A visual tag
is also put in the animal’s ear so that cattle have two forms of identification
and the visual tag assists with identifying animals without the use of an electronic
tag reader. Details about each individual animal are automatically recorded into
the stock management computer system operated by BSM. Upon purchase you will receive
a list of the individual cattle ID’s of your particular animals. Within your portfolio
you can, at any time, tell where your stock can be found and their present expected
weight.
Where exactly will my cattle be kept and can I see them in person?
Beef Stock Market has contract backgrounding properties throughout Queensland and
in other states of Australia. You will be notified at purchase time of the property/paddock
location where your cattle are being run. The Beef Stock Market website has links
to travel and accommodation sites for the areas where your cattle are being grazed.
As you actually own the stock, you have the right to see them upon request. On-farm
visits can be arranged through the livestock manager who may be contacted at admin@beefstockmarket.com.au.
Alternatively, Agri-tours will be run throughout the year for each property. Stay
tuned for more details.
Can purchases be made at any time?
Yes. The Terms and Conditions of Cattle Purchase, Management and Sale outlines the
conditions of purchase. As long as there are cattle available, you are able to purchase.
Reasons that cattle might not be available may be that market conditions prevent
availability of desirable cattle or prices are too high. Seasonal influences may
also mean fewer cattle can be run. The idea of the Beef Stock Market is to make
it possible for anyone who desires, to become a part of the Australian beef cattle
industry, and as such we will do our utmost to make sure you get the stock you require.
Is it possible for multiple investors to share a herd of stock units?
You can only purchase a whole animal as we will not allocate separate part shares
in an animal between a number of different purchasers. If the amount you state in
the Registration and Order Form does not allow you to buy a whole animal, we will
only supply you with the number of whole animals that can be purchased for the amount
you wish to spend. Where there is a difference between the amount you wish to spend
and the total purchase price for whole animals, you need only pay us the purchase
price, administration fee, and the purchase fee.
All Beef Stock Market purchases are required to be made by BPAY®. It is possible
that your BPAY® linked credit card or bank account may be in the name of more
than one person or entity however we will only base your purchase on the Registration
and Order Form details as submitted to us. The Registration and Order Form only
makes provision for one individual or entity purchaser to complete their details
but if you wish to own the stock as a trustee or in a business trading name, you
should include those details in the appropriate section of the Registration and
Order Form.
How long has the Beef Stock Market been in operation?
The Beef Stock Market has been under development since 1999. After a trial period
in 2003, the Beef Stock Market was made commercially available in January 2005.
Since this time, the system has grown to encompass backgrounding properties in most
states of Australia. The Directors of Beef Stock Market have extensive experience
within the cattle industry and Beef Stock Market is simply an extension of their
existing industry participation.
DISCLAIMER: While all care has been taken in making available this information and
deriving the content from sources believed to be accurate and current from time
to time, B.S.M. Beef Pty Ltd CAN 098 395 576 and its employees, agents and contractors
(“Beef Stock Market”) make no warranty or representation about the accuracy, completeness
or suitability for particular investment or other purposes of the information provided.
The information is provided “as is” and for information purposes only without express
or implied warranty. Any person viewing this website must make their own independent
enquiries and seek appropriate and independent professional or financial advice
before relying on or using any information provided. You should obtain such advice
prior to making any investment decisions and carefully consider all information
provided in this document. Any financial forecasts of returns or tax benefits or
advantages stated are made as estimates only and you should seek your own independent
professional advice and conduct your own further enquiries to satisfy yourself of
these estimates as they are based on assumptions of occurrence of anticipated future
events and may be not affiliated with any securities exchange, stock market investment
service or any other trading or investment service dealing in shares, stocks, bonds
or other financial investments. Nor is it associated or does it purport to operate
in any manner as a licensed entity providing or approved to provide such services
in relation to the above investments and the investments described in this document
relating to beef cattle.