Can I invest in from outside South Africa?
Yes. We are open to investment from any country and currently have investors in the USA, Canada, Germany, Mexico and from all over Europe and Asia.
What can I expect after buying a calf?
On completion your investment, you will be allocated a calf and issued an ownership certificate bearing your name and the unique number of your calf on a specific farm.
If there is no stock available at the time of investment, you will be added to our waiting list and only allocated a calf once it is physically delivered on the farm. This process could take anywhere between 14 to 60 days due to the seasonal availability of cattle and our requirement to only select calves that will adapt to the farms and meet our expectations for average daily weight gain.
Is my buying a calf similar to buying shares in the farm
Yes, there is a similarity, but in this case your “share” is your specific cow instead of a piece of paper. You are invested together with other investors in the farm, so you do not only benefit from your specific cow but also from the performance of the cows of other investors on the farm every year.
Do I pay farming fees for each cow?
Yes, and you also earn a dividend for each cow. The farming fee includes: the cost of management, insurance for death or loss, maintenance of the farm, grass - which is the food for the cows, supplementary feed and, medicine and vaccinations.
How is the return calculated?
The calf you invest in weighs between 180kg to 240kg. Each calf eats approximately 10 kilograms of grass per day and gains on average 0.5 kilograms in body mass. Over a period of 18 to 24 months, the calves grow on the farm until they are approximately 500 kilograms. Livestock Wealth then buys back the mature cow from the farm (you) and the proceeds are used to replace your sold cow with a young calf. In this way you will always own a cow on the farm, which is either the calf you buy today or its replacement in the future.
The farm generates income from selling mature cows back to Livestock Wealth, who then markets them for grass-fed beef. The difference between the income earned by the farm from selling the grown cows and the expense of replacing calves is the the profit of the farm. This profit is proportionally shared by all the owners of the cows on the farm at the end of the financial year in December. Dividends are then paid out by the end of January.
How do you get to the 12.4%* return?
Income from Sale of Cows – R18000* per grown cow
Cost of Replacing Calves – R8500
Gross Profit over 24 months = R9500
Annualised Profit (12 months) = R4750
The example given above shows that the annual income from the farm is R4750. Since each cow contributes R3780 in farming fees over 12 months, the net profit from the investment is R970. In percentage terms, that is a return on investment of 12.0%.
*(As with all financial products, this rate is a conservative estimate based on solid principles and tried and tested figures. The outcome can be influenced by variables that are out of our control and, while there is an allowance for such influences, severe factors may affect the rate of return, as with the risk in all types of farming)
Does the value of the cow increase with time?
Yes. The price of beef today is double what it was five to seven years ago. It is therefore safe to forecast that the value of your cows will also grow in the same measure over the next few years. Your investment also grows with the growth of the physical weight of the cow over time as well as the general appreciation in the price of beef. This is why the cow is a great store of wealth.
Do I only get dividends after 24 months?
No. When the farms are fully stocked they should be able to slaughter cows every month, meaning that the farm is able to share profits every year. In the first year of new farm establishment, when all the calves are still growing, there could be no cows to sell but over time this should stabilise.
What can affect the return on investment?
The rate of increase in the price of beef has consistently exceeded inflation for the last 20 years. This trend is set to continue as more people enter the middle class and demand healthier protein. As Livestock Wealth, our target customer is the health conscious, high-end consumer market where healthy margins can be secured so as to provide a consistent return for investors and farmers who supply us with calves. We currently price our beef at a premium to grain-fed beef from the feedlots.
The rate of growth of the cows is the second biggest contributor to the profit of the farm. If the cows pick up weight quickly, they also get to market quicker and therefore increase the rate of return of the entire farm. The opposite is also true.
The cost of replacing calves is also a determinant of the profitability of the farm. We are creating strong partnerships with farmers to smooth the price volatility to ensure consistency in supply and pricing.
How does your Easy-Cow – Quarter Portion work?
We have introduced the group-buying of one cow by up to four people (in true stokvel style) in order to reduce the barrier to entry for our investment. We strongly believe that owning a cow should not be a luxury that only a few can afford but a tool for ordinary people to build real, lasting wealth. When you buy a quarter of the cow, you only pay a quarter of its farming fees and also receive a quarter of the dividend from the cow.
What if I want to sell my investment?
You can sell at any time and we’ll re-list your cow for sale at a market-related price to another investor.
What are the benefits of owning cows compared to stocks and other instruments?
There are many benefits but here are the top 5:
1. It feels good to own cattle.
2.You are contributing to food security by investing in agriculture.
3. The cows eat grass and grow regardless of local and world politics.
4. You are creating jobs where they are needed the most.
5. You make a good return on your money whilst enjoying all of the above benefits.
Where is the meat sold?
We will be marketing the beef through select retail partners and online through our website – grassbeef.africa
Can I also buy the grassbeef?
We will be accepting pre-orders on our website soon. Please look out for our opening specials.
What breeds are your cows?
We do not discriminate against breeds however we carefully select calves based on their ability to pick up weight when fed a certain quantity of grass.
What if my cow dies?
The farming fee includes a contribution towards insurance that replaces any cows that may die due to illness or accidents. In the unlikely event that your cow dies, it will be replaced by another one. In this way the death of your cow will not affect your dividend from the farm.
Can I take my cow off the farm or for slaughter?
You may not remove the cow physically from the farm but may sell your investment and then use the proceeds for whatever need you may have. We could even assist you with sourcing an alternative slaughther cow at reasonable rates from our partners closer to your location.
Can I visit the farm at any time?
Yes you may. You only have to inform us in advance to ensure that you get the best welcome possible. In the case where a farm has accommodation, you may also book accommodation at the farm and experience the farm lifestyle.
When can I meet with other farmers who also own cows?
Each farm has a forum inside Farmbook where matters pertaining to it are discussed between the owners of cows on the farm and its management. We also host farmer's days for each farm, twice a year, both in the winter and in summer. This gives an opportunity for owners to meet each other and learn more about farming as well as to the see the performance of the farm in person.
Can we also own the land?
We currently lease most of the farms in our portfolio but will soon be launching an option for investors to buy units of the farm land and earn a return from the rental and the growth in the value of the land.