AgriClear received an enthusiastic welcome from Canadian and American buyers and sellers after it was launched in mid-June, according to company president David Moss. “We’ve had registrations, live listings, and lots of positive response,” he said.
AgriClear is a platform for marketing cattle to anyone anywhere in Canada and the U.S. any time via your computer or smart device with confidence that the payment for the cattle is guaranteed.
AgriClear’s partnership with TMX Group provides this security with a $10 million assurance backstop. All payments are settled through TMX subsidiary, NGX, a leading natural gas and electricity clearinghouse based in Calgary and Houston.
Moss is well known in Canadian beef circles from his time with Western Feedlots, then as COO of Livestock Identification Services of Alberta, and most recently as CEO (North America) for Integrated Traceability Solutions.
Five years ago Moss and Roland Labuhn, an entrepreneur with wide experience in information technology startups, joined with Nevil Speer, an animal science professor at Western Kentucky University and cattle market columnist, to flesh out the AgriClear concept.
Looking for an investor, the three founding partners crossed paths with NGX president Jim Oosterbaan who happened to be looking for new markets to diversify his company’s portfolio.
“I can’t say enough about how well TMX Group and NGX have listened to industry’s needs,” says Moss. “They’ve completely rewritten their settlement and payment systems to meet the needs of the beef industry.”
By January 2014, the group started putting all the pieces in place under the guidance of an advisory council made up of 45 influential leaders from every sector of the North American beef industry.
When buyers make electronic deposits for cattle purchased from AgriClear’s website, the funds are held in trust until the cattle are delivered. Only after a buyer and seller confirm that the cattle meet contract specs, will the net sale proceeds be released into the verified account provided by the seller. AgriClear deducts industry checkoffs and other applicable levies before the funds are released.
Buyer and seller pay a transaction fee of $6 per head to AgriClear upon completion. Registration and membership is free and there is no charge to post or view a listing to sell or buy cattle.
Moss says some people were uneasy about providing banking information at first but their comfort level rises once they understand how their information is secured by the regulated payment and settlement services of NGX, and how quickly payments show up in their bank account.
“Information security is what NGX/ TMX manages on a daily basis. They are world leaders in this arena,” says Moss.
Banking information isn’t required until you want to post listings or purchase cattle, so AgriClear can confirm your ability to close the transaction. Multiple accounts may be registered if you buy or sell as an individual and for a company, or if the cattle are secured by a loan or line of credit with a financial institution.
If a buyer isn’t satisfied with the cattle Moss says the first step is for the buyer and seller to try to find a solution. If both confirm some cattle meet the contract specs, AgriClear will release payment for those cattle and wait for the buyer and seller to negotiate a price for the others.
They will assist when requested and, if necessary, hire an independent dispute resolution specialist to meet with both parties on a cost-recovery basis.
AgriClear utilizes a member rating system, where seller and buyer rate one another after each transaction. In time this will influence the online reputations of both. So it’s only good business for the seller to accurately describe the cattle. Likewise, a buyer who continually throws hurdles in the way of prompt payment isn’t going to gain a trustworthy reputation.
Negotiating a contract
Individuals of legal age, organizations, corporations and partnerships resident in Canada and the U.S. are eligible to market cattle on AgriClear.
Any and all classes can be listed.
Sellers establish their asking price, although AgriClear posts current prices from Canfax and Cattlefax in the U.S. as a guide. In time, once business picks up, members will be able to search out summary AgriClear pricing data from current online transactions.
Members can revise the price, expiry date and any other details on their listings at any time. There is no obligation to sell.
After providing your listing name and location along with key information about the cattle and your asking price, it’s up to you as to how much additional information and supporting photos, videos and documentation you’d like to post. You may want to detail the vaccination history, feed program, age verification, preconditioning, and any attributes that could qualify the cattle for a branded beef program.
Buyers can search the listings by weight, breed, type, condition, feeding program, and value-added attributes. Search criteria can be saved and buyers can opt to be notified when cattle that meet their criteria are listed.
Alternatively, buyers can post their own listing with the specs they are seeking.
You can list anonymously, up until a deal is being negotiated.
AgriClear is not an auction program with electronic bidding, Moss explains. Your listing may attract multiple offers, but you can only negotiate with one buyer at a time on each listing.
To open a negotiation interested buyers might accept your asking price or post a counter offer. Slide, shrink, delivery, weigh conditions and anything either party feels should be included in the contract also need to be negotiated.
You can end negotiations at any point before forming a contract.
All negotiations are carried out through the AgriClear platform, although you are free to contact the other party to clarify details.
AgriClear monitors all transactions and reports in real time to each party as the negotiation progresses so you’ll always know what’s required next to complete a transaction. A key requirement from industry was to ensure the platform is easy to use and highly intuitive, Moss adds.
Once both parties agree to terms, AgriClear issues a contract term sheet that is binding on both parties. The buyer deposits the estimated value of the contract plus a five per cent overage provision. Any excess is returned to the buyer once the final pay weight and post-delivery adjustments are made.
AgriClear then notifies the seller that he or she can ship the cattle knowing payment is assured and will be released as soon as both parties confirm that the contract specs have been met.
More information is available at agriclear.com or from AgriClear’s customer service people at 1-844-AGRICLR (247-4257).