Our highs and lows running a feedlot unit

If there is one business venture that few people know about and even fewer investors have ventured into yet it has a lucrative market, I dare say it is beef cattle feedlots.

Reliable reports show there are significantly few feedlots in Kenya. Nonetheless, three young and daring investors took the risk and walked this journey that few have dared and share their experience with Smart Harvest.

Last year, after thorough research, Eugene Mbugua 29, Victor Kagema 34, and a third member who sought anonymity, started Bullocks Farm on a less than an eighth ranch in Isinya, Kitengela County. From their experiences, it is evident that though lucrative, feedlots - the business of fattening emaciated cows for sale - is risky, capital intensive, and knowledge driven.

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“This is a high risk business, but a high risk is also a high returns business. But this is still a pilot phase,” Mr Kagema says during the interview.

Although they have not broken even yet, given that they are in their 3rd phase, all indications are that in due time, they will start reaping from their sweat.

What it entails

For starters, feedlot farming is a beef cattle production system where the farmer gets cattle that have attained slaughter size but are not in good body condition. The animals are reared in a simple zero grazing unit with the goal of rapidly fattening them. The idea is this; when animals are reared in serene environments and pampered with tender care and quality feed, they produce premium quality meat. But when reared under harsh conditions like how pastoralists do it the meat is tough and bland.

To set the ball rolling, in September last year, the trio bought 20 emaciated but healthy cattle from pastoralists in Bisil in Kajiado, Rumuruti and Narok at prices ranging from Sh20,000 to Sh30,000. The animals were then taken through an intense and highly mathematical weight gaining programme that lasts 90 days.

“We have had our ups and downs. It is like taking cattle in a delicate spa experience for 90 days and when they emerge from there, they have attained the ideal market weight and produce the leanest, sweetest and softest meat that is premium,” Mr Mbugua explains.

Speaking of premium, as it is, the Kenyan market is ready and willing to buy beef that is juicy and mouth-watering as opposed to the hard beef sold in most butcheries. Unfortunately, there are few suppliers of such premium cuts.

“For a while, the Kenyan meat market has been highly undeveloped as buyers have been used to poor quality ‘nyama ya butcha’ but as the economy develops, so is the hospitality industry and with it comes a clientele that can pay more for quality meat. We saw this gap and capitalised on it.” 

Getting the market

After three months, the animals were ready for the market and luckily, the investors had secured a deal with Farmers Choice who buy from them the meat that is later sold to high end hotels. With a kilo selling at Sh1,000, they were able to recover their production costs. Securing a market with Farmers Choice, Mbugua says, was straightforward. For those interested, once you are ready with the animals and structures, you get in touch with them and within a week they send an official to assess the farm. If they are satisfied with what they see, you sign a contract and are good to go. Once the animals attain the ideal weight, you transport them to Farmers Choice and they pay within a week. With a ready market everything sounds easy for the trio but honestly, it has not been a walk in the park steering the ship to profitability as Mbugua attests.

“Our biggest challenge is the cost of feeds and getting the math right in terms of the feed rations. You see, every day counts because the cow is expected to add 1,500 grams per day. This is critical because at the end of 90 days, they should have attained the market weight which is ideally 400kilos,” Mbugua explains.

And to succeed in their goal of weigh gaining, of importance at the setup stage is right animal selection. Dr Moses Olum a vet in Nairobi agrees saying the animal you select must be of a certain minimum weight and in good health. This is why it’s critical for a vet to be involved from the start. The breed is also important.

Vaccination is key

To avoid disease attacks given that the animals are weak when they are brought into the paddocks, vaccination is key. Equally critical is the feeding regimen that one must get perfectly right.

“We feed our animals on a high grain diet. But when they come to the feedlot on day one, because they are still weak, we start them off with starters to avoid shocking their system with complex foods,” Kagema explains.

Given that the feed mainly comprise human-quality maize, it has spiked production costs. Beginning of this year, they were buying a 90 kilo bag of maize at Sh1,800, but now it has shot up to Sh4,000. To jump the feeds hurdle, they have learnt the art of making their own feeds, and to get the rations right, they work closely with Dr Olum.

Once the animals stabilise, they are progressively given high grain diets to trigger rapid weight gain. Water is also given in plenty. And what is the biggest lesson they have learnt so far?

“Patience no doubt. Man, in this game you have to be patient and keen on details. The difference between making profit and a loss is one day. You cannot afford to have sick animal that will eat your food and at the end of the day will not attain desired weight. It’s is a delicate math,” Mbugua points out.

Tough as the journey may seem, the trio is optimistic and have no regrets.

“We plan to go big scale in future. The trick is e economies of scale, so we are looking at increasing our numbers to 1,000 cattle per cycle,” Kagema says.