 Welcome to Private Property Farming Podcast. My name is Mbali Nwokor, your host for this evening and every other Tuesday and Thursday at 8 p.m. Thank you so much for joining today's episode as we're gonna be talking all about livestock auctions and market fair pricing. We speak to a young agripreneur and he's gonna be teaching us about how do we purchase livestock in auctions, what his business is about and maybe the do's and don'ts as a livestock farmer, whether you're upcoming or seasoned farmer on what to do when we interact with auctions or auction houses. And I must say that he's a winner or was a finalist and a winner with the SAP social impact awards within 2021. So congratulations to him. I'm so excited to obviously speak to young entrepreneurs who are doing amazing things, winning awards and being recognized for the work that they do, which hardly doesn't come by as often as we'd like to see. But yeah, if you have any questions for our guests this evening or Atengosi, please feel free to ask questions, comment, like, share below, continue to subscribe to the podcast on our YouTube channel and you can also ask questions, post the show and reach out to him. So without further ado, let's get straight on to the show, Atengosi Dengar. Thank you so much for coming on to the podcast. How are you doing? I'm good thanks to you. Awesome, I'm super fantastic. So you're the managing director of Leisure Meet, right? Tell us about your organization and give us a brief overview of your operations. So Leisure Meet is the first Black Youth owned livestock auctioning company in South Africa. So what we do is that we provide market access for your emerging, your communal and your commercial farmers. Basically, we aggregate the market because farmers sometimes are located in dispersed areas and it becomes difficult to reach the market. So we bring the market closer to them. Right, and the market in this specific case is auctions. Basically, we bring the market, we look at the market kilo, which is national determined and then the animals which the farmers bring in, we weigh them times by the national kilo and then the buyers, but based on the quality of the animal. And then our second aspect of our business will be by winners or bullies. These are your calves, which we buy at market determined prices at weight, bring our scale, weigh it and then we pay the farmers electronically. So yeah. Yeah, so what type of farmers do you deal with in terms of size or operations, right? You did say small scale merging, but where cattle are concerned, is there a specific number that you wanna start to do business with and is there a specific breed that you particularly look out for when you're purchasing cattle from the farmers? Well, when it comes to winners, it's all about the weight and because we sell to fielods, fielods want a specific type of frame of animal. Those are your Ponsmara type frame animals. It doesn't have to be specifically the Ponsmara. It might be another animal crossed with a Ponsmara to get that frame. So with regards to the type of farmers we do business with, it's a farmer who has 10, some farmers have two cattle, some guys are starting out right to your commercial farmers with hundreds of cattle. So we don't discriminate as to who it is and also do business across different ratios. So black, white, Indian, Khaled, yeah, everything. Yeah, with the farmers that you're on board, like you said, some have two, some of just us have 10, some are just starting out. Take us through the process. So let's say I'm a livestock farmer, I've got five cattle and they are Ponsmara. How do I then start to do business with Lizwe Meet? Is there a contract? Is there an offtake agreement? Do you assist me in growing the cattle so that we can have weaners? Basically, how does that relationship come about? So what usually happens is the farmers usually hear about the auctions and they come physically because the areas which we work in, the reception tends to be quite bad. So some of the farmers are not technologically advanced. So they also want to see. So that's how you usually start out. And then over time at the auction, they see, okay, I might be farming with a guinea type animal, which is a thin frame. And then they said auction, okay, that animal went for more than my animal. And why, you know, and then we start, we have that engagement as to, you know, this breed is what people like in terms of the A grade in South Africa. But your breed does not say it's not for quality. Is this what the African guys want when they do the cultural ceremonies? So it's that aspect. And then also educating them on the informal market as well, which most of the time they tend to sell to the informal market, whereas we sell to the formal market, which goes according to kilo and weight. Because what you find sometimes as well, and guinea type animal, a fully grown guinea type animal, wide-way 350 kgs, whereas a wiener of a Ponsmora type weighs about 200, between 220, 240 kgs. And then you calculate the growth rate then we need to talk about, let's say three years and the wiener took seven months. So in terms of business, the setting the wieners is more consistent cash flow. So it's also looking at what the farmer wants to do as well. Because some farmers want the guinea type because they are stronger in the informal market, you see. Because the informal market doesn't look at the weight. They look at what the cultural ceremony requires, you see. How often do these livestock auctions happen? Do they occur every week, every month? And if so, then how do you manage the demand with your farmers so that you could obviously have cattle to auction? Right now it's every two months because the area which we located in is Fort Cox College or basically it's next to Fort Cox College in the Eastern Cape. And the surrounding farmers don't have the commercial farmer numbers to be exact. So what we do is every two months we hold an auction. So with the cost of managing the demand, we have a register where we get the estimate number, we get the farmers to sign in the estimate numbers. These are the guys surrounding the area because the commercial farmers is easy to call a farmer and say, again, we have an auction coming up. Then they'll bring 50, for example, overnight. Whereas an informal farmer might need to understand that there's an auction coming out and then they need to prepare and maybe some of them might want to feed or might want to go through a call and select. You know, when you deal with the commercial farmer, they understand Ransom's but the upstart guys, the communal farmers, the informal or the emerging farmers, it's kind of difficult because they have a kind of cultural connotation or they have that emotional attachment to the animals. So it's a bit longer but it works in the end. Tell us about the prices in an auction house. So, you know, how does it work? Do you get a price for the cattle and then what are the other hidden costs that we don't typically see? So are there fees involved? You know, like I can relate it to the fresh produce market when a farmer, a vegetable or a fruit farmer sends their produce to the fresh produce market. You deal with an agent and there's a commission and then there's a commission for the agent and there's a commission for the market floor. So from an auction perspective, how does that translate to when buying cattle? Does the farmer get the price for the cattle and also what are the other extra fees associated within an auction house? So I'm looking from both aspects now. So for a guy who's selling livestock, because we provide the market, you pay commission. So basically, let's say your animal income was 16,000 and the commission for that day, let's say it's about 8%. So it's 10,000 minus 8%, that's what will reflect in your bank account. And then from the seller side as well, what you must understand again, because you are transporting to the auction side, there's also money out of pocket which you need to forego because you might transport your livestock to the auction and then the price which you get there, you do not agree with. Because at the end of the day, the market price is not determined by the individual. It's determined by the market. Let's say the killer for seagrass for that week, for example, is 26 grand and your animal weighs 300, for example. So it's 26 grand times 300 and that's where the bidding starts. It might go higher, it might go lower, but that depends on the quality of your animal. So as a farmer, you need to guard your quality. So in terms of understanding your business, it sort of focuses your production in terms of quantity. Now, as a buyer, you first and foremost, need to be able to transport your livestock which you have bought from the auction house. Some guys give you a day, it depends a couple of hours, but you need to bring a trailer or organize transport beforehand. So should I take you through the bidding process and the like sort of? Absolutely, would like to know. So as a farmer selling livestock, your animal goes on to the pen or the stage and then from there on the bidding starts and it goes up, it goes down, but before the sale is concluded, the auctioneer will look at you to confirm whether you're happy with the price or not. And then from there, if you agree, that's the price you get sold at. Now as a buyer, you see a nice cattle there and you like the price. And another bidder next to you also likes the quality. So you bid according to the price of the animal and that side goes up and it becomes more beneficial. Why? Because now these buyers are not from the same area. They are strictly bidding on the quality of the animal. So and once the seller has agreed, the buyer then transfer rather goes to the office, either transfers it as EFT. From there, we get the printer remittance which basically states this animal is moving from a seller to purchase it so that if they get transported, or sorry, if they get stopped by a stock gift, at least they have a document to identify them. This animal belongs to me now. And then from the seller side, you also get a remittance stating, okay, this is the amount the animal sold for deduct the commission. This is what I expect to land in my EFT or bank, yeah. Yeah, I think we'll see. Do you only focus on cattle or do you then also branch out to more small holdings like your goats and the sheep? It's all livestock, but with the faster auctions because the area which we focus on when we order auctions is mostly like a cattle. So people assume it's only cattle, it's everything. I mean, it's chickens, pigs, goats and sheep, yeah. So all livestock. Wow, so how can farmers ensure that they get the best price for their livestock? You mentioned about when the animal gets to the auction house, everybody has to look at it and then the buyer must say, I like it. It looks healthy, it looks great. Maybe it weighs enough kilogram. So how can a farmer ensure that they have the right animal at the right quality for a buyer to attract a buyer at the end of the day? So what are the advices that you could give to a farmer on the ground to ensure that they're raising the right cattle, sheep, goats, pigs, chickens, et cetera, at quality? The biggest thing is understanding what you want to serve because if you want to serve the informal market, you have to breed according to what the informal market wants. If you want to breed towards the commercial market, you must be to what the commercial market wants and that most of the time it points to genetics. So let's say in your area as well because the environment differs across South Africa. In Eastern Cape, you have areas where it rains mostly and it's green most of the time. Then you have other areas which are semi-curry type. So you can't necessarily breed a larger frame animal in those conditions. Why? Because the genetics will not suit that environment whereas in that environment, you might want to get to a groony type animals, your Brahman cattle. Those animals which are adapted and hard to get and can survive in the dry areas. So again, it depends where you're located and where you want to go because if you located in an area which rains quite often and it's quite green, I would suggest you go towards a larger frame animals. That way you ensure you're getting more and per hectare in terms of feed. And if you are located in a dry area, that means you most likely will encounter droughts more frequently than not. So you need to form with your smaller frame animals and the hardy animals as well. So yeah. You mentioned a lot of preparation that goes around the formal market auctioning, right? There's obviously preparation from the seller side, there's preparation from the buyer side. And the buyers at a formal market auction look for specific breed, quality, weight, size, et cetera. How does that differ in terms of the informal market? Does the preparation, is the preparation still the same or are there certain things from an informal market that is vastly different to the formal market? And if they are, please can you point some of those out for us? Yes, with regards to the formal market, like if we sell into a few lots, particularly, they look for the conformality of the animal, must be of a certain frame so that when they feed, they can realize the profit margin. So they look for conformality. Sorry about that. And the type of frame as well, because what tends to happen is that if you have a smaller type, smaller frame winner, they tend to penalize why? Because those animals take longer to adjust to feed, thus remaining longer on the feed lot, thus leading to a loss for them. So in terms of that aspect, your genetics also need to be quite, you need to look at your genetics really, quite strictly because you have to constantly introduce new genetics to ensure that you realize it waits faster because another thing that feed lots also tend to be, also look at feed conversion. So if your animals are known or rather your winners are known for converting feed at a faster rate than others, the feed lot will like your animals and most likely will pay you a premium. Why? Because they're realizing a profit faster. So you're breeding in what the feed lot wants. And again, with regards to the commercial side, sometimes you're not breeding the weaniness, sometimes you're breeding or rather you're placing your old stock. So it might be a older bone, smaller type animal which can be fed for a little bit and then sported at an arbiter. So you also get arbiter bias at an auction. And guys will see, okay, this animal, it's the farmer is getting rid of it, but I could potentially use it for maybe another season and then after that season, I can take it to the arbiter myself. Now, with regards to the informal market, the informal market, it depends really, like the ceremony is like right now basically where they want a specific color, like from Guinea, they want a specific color, black and white, for example. And sometimes they want the brown with the black makes almost like a Jersey cow. So, and they attract the specific prices as well because the bio quality will be like, I want this animal, you know, and then you pass it on to the farmers and the farmers will be like, I'm looking for this somehow. You know, no weight, no market price, it's like demand on the spot, you know, and it usually goes for the price. Yeah. In rare instances like that, like you've mentioned, you know, some buyers will look for a specific cattle and guinea, black and white, et cetera. So with these meat, does it happen that you have to go travel around the Eastern Cape to look for a specific cattle? Because maybe you might have heard that, you know, in the next two months, a specific buyer is looking for a specific breed of cattle. So there's part of your auction process, especially when you're getting or interacting and having those conversations with the farmers, does it involve traveling around the Eastern Cape region and looking for also those red breeds that you know, you know, you've kind of struck gold, so to say, because they are so unique in their positioning in the way they've grown, et cetera. Yes. We travel a lot, I mean, we travel a lot. Long, I mean, we recently covered, how much was it? 100,000 kilometers within nine months. So it's a lot of driving. But with regards to contacting the sellers, the sellers usually get hold of the marketers because they understand as well, they need to negotiate or other play buyers against each other. If I can get more buyers from this guy, I mean, I might as well go from that guy. But with regards to specific breeds, they tend to farmers or what's the word, commercial farmers particularly, they know how to market themselves. But it's worth the emerging farmers, which is quite difficult because I might be located in my 30 year, for example, and the buyer is located in Iceland, for example. In terms of logistics, it's not gonna work out because they're not selling in volume. But for commercial farmers selling 100 at a time, it makes sense. So in that respect, I mean, and then they can go. Yeah. How can you get that gap, as Liz, I mean, it's because you could obviously see the potential from the emerging farmer. I mean, rightfully so, commercial farmers gone to a commercial status because of farming and years of being in the game. But for a person who's more knowledgeable and educated within this auction space, as Lisa and me, as Aten Kosi, how do you then bridge the gap between your communication with the emerging farmers? Do you just leave them desolate? Or is there training involved and teaching them the business of auctioning, as well as the business of raising cattle so that they can meet at commercial status? Okay, on that point, because before we started, when we operate people didn't know what the auction was. So an auction takes about four hours. It took longer. It took basically four hours because we had to explain it in the home language and then all the auction. So there was a lot of back and forth in between. So in terms of educating, another thing which we tend to do is that there's a Fordcote's College, which agricultural college in Eastern Cape, right next to it there's a pre-premier school. I just can't get the name off the top of my head. So what do you usually ask the principal to allow some of the classes to close for that particular day so that they can see because another thing which we've seen, we've grown up in farming. So we know from a small age, this is what the auction is and what you learn from it. Sometimes you go there, you're not buying, you're just watching at the price and you're just noticing what's going on in the industry. But because they are distant and don't understand auction, they sort of get shut off. Now it's difficult as an emerging farmer to sort of catch up when the trainers are really left the station. So in that aspect, training the new farmers because in the Eastern Cape, as you know, unemployment is right, especially among the youth. But the thing is in the Eastern Cape, they have space for communal farming. So they might not be able to get a job, but that does not necessarily mean they cannot sustain themselves. So in that aspect, we also communicate with the principal of the college as well because they should be starting an auctioning course soon, which they didn't have previously because of the auction. So yeah. Yeah. And tell me for emerging farmers, is there any certification that needs to be supplied when they're going to go auction their cattle? Like traceability records, vaccination records, what sort of certification would you be expecting from the farmer? We have a group for the farmers. It's basically all the farmers who attend our auctions and we have a former register. We put them into a group and then everything we hear which comes from agriculture because they do not have, some of them have the finance and some of them don't. So every information we get from the Department of Agriculture, we post it on to the group and then it's sort of a discussion of what's going on and their likes. But with regards to certification, Department of Agriculture offers free veterinary services. So they, what we ask them to do is that they get the vet to certify the animal as being free of food, amount of disease and other diseases as well. Because at the end of the day it's going to serve them well if they do because sometimes you can see an animal is not going to get the price which the farmer wants. And then they're sort of like, no, you guys are not paying but we sort of training them over time. So the guys that have worked with us for quite some time understand and then it's the new guys which you are onboarding. So yeah. Yeah. I think mostly how do you hedge your risks as a trader in the space? Especially where there are concerns around drought and do you ever run out of cattle to auction? So how do you hedge your risks as an auctioneer? Well, the Eastern Cape is the number one producer of livestock in South Africa. That's straight through and through. So in terms of numbers, the numbers are in the Eastern Cape. So in terms of hedging our risk like we do in the system I think that we have a register. So in order to own an auction you incur marketing costs and other overheads. So you need to ensure that there is at least the minimum amount. And then from there on you add on or there will be sellers that come in on the day. So that you least running at a profit from that minimum amount. In terms of drought, if I look at the 2016 drought for example, we haven't been operating for that long. But I look at the 2016 drought and what happened in the industry itself. The livestock were still sold. They didn't realize the prices which the farmers wanted. Why? Because the animals weighed a bit less. So in terms of consumption now moving beyond auction in terms of consumption in South Africa we consume more than what we produce. So it's sort of a break even a bit. But yeah. So there's room for livestock farmers in South Africa. So just to close off our conversation tonight which has been jam packed with information. When did you start Leesuemite? You said you are the co-founder of Leesuemite. And why specifically auction? Why did you not grow your own livestock farm and become a megaburra of some sort? And obviously feed into that auction space within the Eastern Cape. So why specifically, why did you decide with you and your co-founder to do auctions within the Eastern Cape? And when did you start your business? What year? Yeah, so my co-founder, sorry man, I didn't, did you say something? No, I said what year, which year? Oh, yeah, I don't remember, I know it was 18. So 2010, 2011. But the thing is my co-founder we've known our families are basically being close knit since primary school. So we've known each other quite some time and again, we're both fourth generation farmers individually in terms of family businesses. But what we saw is that because we are, or rather in those areas, the farmers do not have access to the market. Upcoming farmers like ourselves, I mean, we're 28 years old. And then you go to an area and you're also okay. So you guys have this opportunity of the land, you have the rain, why don't you farm? And then the guy's like, no, we don't see money in agriculture. That's the basic, like I'm converting from closer to English, but one thing which we didn't understand is that because the father or the mother is currently not realizing the real market value for the livestock, it discourages the following generation to go into farming. So that's why we decided to do the auctioning one, because if they can see someone of your skin type to be able to doing it, then it's easier for them to do it as well. But again, being fair because in some of the areas which we collect livestock from, the guys are suffering from stock theft, which is right in some areas, market speculators. The one case in Seymour, the guy went into an area with his truck, bought in 100,000 cash and said, okay, your animals was 4,000, 5,000. I'm paying you 5,000 on the spot. And because the guys were so desperate and didn't have access to the market, they let go of the livestock. So it's aspects like that which we break, because everyday livestock regardless of where it comes from, it must go according to the price and the weight, that and the quality. So yeah. And your business name is called Liso Meat. Over and above the opening is that, yes, we can hear you, Atankosi. Yes, can you hear me? You're having difficulty. Yes, I can hear you. Can you hear me? Yes, I can hear you. But you can continue. I think it's back now. Sorry, I remember the reception comes and goes in this area. Just feel it. Okay, no worries, we completely understand. I think, so I just lost my question here, but for, I think maybe just to sum up our conversation, you've mentioned something quite critical around theft. Does it happen? I think we just lost Atankosi. We'll just wait for him to come back, ask him two questions, and then I think we can wrap up our conversation. So let's give him a minute to possibly come back, but I believe it's just been such an informative conversation this evening. And so I see the comment box is quite quiet. So if you have any questions for Atankosi, please feel free to ask, whilst we have plus minus two, three minutes left of the show. Alternatively, I think you could reach out to them on social media platforms and also watch the specific conversation on the Private Property Farming Podcast channel on our YouTube channel. So Atankosi, I don't know if you can hear me. It seems that he might have gone off, but thank you so much for watching. We were speaking to Atankosi Dengar, who's the co-founder and managing director of Liswe Meet, they're based in the Eastern Cape. And as you heard him, he's like the first and youngest auction house in the Eastern Cape. Atankosi, thank you for coming back. Sorry, we lost you for a second there. I think just to wrap up the show, Atankosi is that I just wanna find out what next for Liswe Meet and also are you over and above the auction and are you processing any livestock at the stage? You're on mute. So you can just unmute yourself, Atankosi. Thanks. Pardon me. Awesome. So that's where we want to, that's the end goal, but there are a couple of things which we are brewing and we can't leave at this moment in time. But yeah, the future is bright if I can put it simply. All right, just to repeat that. I think on the first second or so, we couldn't hear you where you said, are you looking to become an avatar or just focus fully on auction houses? We didn't hear that response. Well, if you look at the arbiters, just to give you a bit of information, arbiters serve a function in the agricultural, or rather in a livestock space. It's rather than arbiters or make profit margins because if you have a look at the value chain, it's primary producer and then the market at the end, arbiters are somewhere in between. So they fulfill the function. And if you're not slaughtering at a certain function or rather at a certain percentage of the capacity, it is your weight. So everything which you are leading to, it's what you are working on. It's what's asked the word. It's unfortunate that we can't let you know the specific, but it's in the plan. Yeah. I think, Gossi, thank you so much for coming onto the podcast. I thoroughly appreciate your time this evening. And I can imagine how busy you are having to run around the entire province and possibly outside the province looking for cattle. So when's your next auction and where can people contact you and find you? All right. So in terms of auctions, because we bring in a larger number of customers to auction sites, we do on-farm auctions. Like we have one upcoming in Petty, where it's on a farm so that we decrease the amount of people. Otherwise, you're gonna have an issue in terms of COVID numbers. Yeah. So that we tried to avoid that. But in terms of contacting us, we have a Facebook page, Leeswe Meet. They can contact either of us, either my partner or me on LinkedIn. So I'm going to contact Aten Gossi Dengar. And then I'm also on Twitter if farmers want to get a hold of it. And yeah. That is fantastic. Thank you so much for your time. We were just speaking to Aten Gossi Dengar. Sorry for the connection there earlier on, but we glad that we had him back onto the show just to also give out his contact details for anybody who wants to reach him. And yeah, that's it. The Farming Podcast, we've wrapped it up for this evening. And I hope you join us on Thursday for another jam-packed session conversation where we're here for you essentially at the Farming Podcast just to teach you more about agriculture to give you more insight in terms of the trades and the market prices and all the other things that happen along the valley chain. So if you have any suggestions of future topics that you want us to cover, please feel free to contact us on our social media pages, Twitter, Instagram, Facebook and also just send those comments on our YouTube channel and we'll ensure that we give you the right content. Thank you so much once again for supporting the podcast. Please subscribe to our YouTube channel and I will see you on Thursday. That's it for me. Good night. Thank you.