Fundamentals of Cattle Marketing in Homa Bay County, Kenya: Analyzing Market Intermediaries, Price Formation and Yield Performance

Abstract

An understanding of how cattle markets work is a desideratum for sustainable commercialization of cattle production aimed at increasing accessibility to and affordability of cattle meat. This study examined the fundamentals of cattle marketing in Homa bay County, Kenya using primary data collected from 120 respondents selected through multi-stage sampling technique. Data analytical tools included descriptive statistics, budgeting and price formation strategy models. Empirical results showed the market is dominated by males (87.5%), market intermediaries less than 50 years (64.0%) who had formal education (68.0%). The three most important intermediaries were dealers, retailers and brokers. Transportation accounted for 74.3% and 46.2% of Total Variable Cost incurred by dealers and retailers. Cattle marketing was profitable with gross margin per head of cattle sold being Ksh 6548, Ksh 4,655 and Ksh 2,342.50, respectively, for dealers, retailers and brokers while profitability ratio was 1.09, 1.07 and 1.03, respectively. The factors considered important in cattle price discovery included body condition, payment mode and type of buyers while breed, seller category and colour were the least important. Constraints to cattle marketers included insufficient capital, poor roads and insecurity identified by 85.0%, 83.3% and 79.7% of the respondents, respectively. The study concluded that the cattle market is well organized and that cattle marketing are a fairly profitable venture and potential employment source. Strengthening marketing institutions through capacity building for stakeholders, rail system resuscitation and fixing of bad roads are recommended as steps necessary to enhance the commercialization and performance of cattle marketing.

Keywords: Cattle markets, Marketing margin, Intermediaries, price discovery