The dimensions of cattle marketing and trade for low, mid and high value markets in Vietnam are presented in Figure 4.
Figure 4: Dimensions of cattle and beef marketing for low, mid and high value markets in Vietnam. Source: adapted from Waldron (2008)
Live cattle transactions for low value markets (small cities and townships) are generally efficient due to low costs and relatively short chains. Extensive cattle producers sell their products to collectors/ traders at farm gate/ local markets through spot transactions and immediate payment. The producers’ price is often based on the previous sales and recent sales of other producers. Cattle assessment is made on a visual basis. The focus is on quantity attributes e.g. estimating cattle weights and dressing percentages rather than on quality attributes. The biggest proportion of cattle (80-90%) is purchased by traders/collectors (Anh et al., 2010; Tra et al., 2010). Small collectors usually buy 1-2 head and sell to larger traders. The larger traders often form a network to find and buy animals in bulk and transport by trucks to slaughterhouses.
Mid and high value cattle producers differentiate their products to be traded. Specialised fattening producers often sell their products through individual marketing or group marketing, while contracting is often done between abattoirs and large commercial feedlots. Because of the higher product demands, a number of product attributes e.g. health and food safety, and beef quality attributes are integrated into the transactions. Specialised fattening producers can be more profitable than extensive cow-calf households, but also more exposed to market risks, especially feeder and finished cattle prices, and feed prices. The registered slaughter houses and modern abattoirs are established to not only service mid and high value markets (e.g. supermarkets, HRI), but also sell mid and low value cuts into mid and low value markets (e.g. wet markets).