Investing in livestock gives any investor an alternative investment option from stocks and bonds. Here’s what you need to know if you’re looking into this type of investment.
What Is Livestock Investment
Investing in livestock involves investing in either cattle or other farm animals. In fact, they are considered both as acceptable forms of investment.
While cattle investment is the more common investment vehicle, investors can choose to put their money towards other farm animals as well. This can include poultry, farmed fish, and pigs, which can also function as investment assets.
- The investment cost is the price you pay for purchasing livestock.
- Your distribution or cash inflow is the sale of said livestock or any of its by-products.
As long as the investor reports the number of cattle or farm animals with proper documentation to the custodian, then such assets can be accepted.
Investors can see two kinds of growth for livestock investment:
- Livestock weight
- Capital gains
Varying ideas on what “livestock investing” is.
- Some consider livestock investing as a catch-all phrase for animal husbandry.
- Others consider cattle as the only livestock investing option.
- There are also those who see animals that aren’t cattle as agricultural investments.
In this post, both cattle and other farm animals are considered as livestock investment.
Cows are the most popular form of livestock investment due to their longer growing period, which is a draw for some investors, and the higher revenue cows can bring in compared to other animals.
It takes around 8 to 9 months for a young calf to mature. Once the calf reaches a certain age and weight, the investor can sell the cow to a slaughterhouse, or directly to consumers.
Other Farm Animals List
Farm animals can also be considered valid investments for as long as the investor provides the proper documentation. Here are some examples of how to invest in farm animals:
- Lambs – Investors can buy lambs at a cheaper price. These lambs grow into sheep for wool and meat production, providing investors cash inflow.
- Chickens – Those looking into investing in poultry first have to decide which kind they would like to put their money in. There are two main types of poultry farming to choose from: layers and broilers.
- Layers refer to chickens that are raised to lay eggs, which are the main selling products.
- Broilers, on the other hand, are chickens that poultry farmers raise for their meat.
Aside from these two, poultry investments may also focus on chicken breeding (incubating eggs and growing hatched chicks), producing poultry feeds, and processing of egg and chicken meat products.
- Goats – Many people are not aware that while the market for goat meat is small in the Nigeria, it’s a fast-growing market. A big chunk of demand for it comes from local markets. But more than just goat meat, the market for meat continues to expand since more and more people consider goat dairy products to be healthier than cattle dairy products. And more than the meat and dairy products, goats can also provide another source of income for investors.
- Bees – Honey bees can be considered a type of “exotic” livestock investment because not a lot of people farm them. Honey bees can generate income in a couple of ways. They can produce honey and beeswax, both of which many consumers consider important.
- Rabbits – The market for rabbit-related products is a growing one, which many small farmers can take advantage of. One of the brisk-selling rabbit-related products is rabbit meat, which is low in calories and full of protein. Rabbit manure is also an excellent organic fertilizer, which farmers themselves can use or sell to other organic farmers. And for investors who don’t have the heart to slaughter these warm furry animals, rabbit-breeding is the way to go. Rabbits are very popular household pets and there’s always a demand for them, especially from children.
Livestock investing can provide investors a diversified financial and retirement plan. Rather than keep everything in the stock market, investors can see with their own eyes how their capital literally matures and grows.
Of course, livestock investing has its own drawbacks, like the possibility of price crashes for beef or diseases. Before deciding on anything, it’s advisable to consider whether an investment decision aligns with one’s investment philosophy.
Do you think that livestock investing is viable? Do you know other investment assets that most of the public does not know? Let us know in the comments section below.