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Economics of the Meat Goat Industry
The meat goat industry is beginning to emerge from obscurity as people learn of the profit potential. We as many of you now get calls from prospective breeders who want to get in on this exciting new industry before it goes out of style and while it still has huge profit margins. These calls are very disconcerting to me and I try to talk these folks out of going into the meat goat business. Other calls come from those who have gone into the business assuming it was a get-rich-quick scheme and now they want to sell what is left of their miserable herd of goats as they have not found the riches they were in search of. I thought it would be a good idea to pass along my thoughts on the current economic conditions and future outlook for the industry.
I recently returned from California where I took a load (119 head) of wethers to Stockton for slaughter. Goats weighing from 60-80 lbs brought $1.10 per pound and those over 80 lbs received $.85 per pound. I had four similar bids for the goats from other buyers and they each would like a load every other week with a load of lambs on intervening weeks. The Mountain States Meat Goat Association is an Association of 50 plus members here in Utah, Wyoming, Idaho, Colorado and Nevada that was created for the express purpose of promoting meat goats for both show and slaughter markets. All indications are that all the 2003 production year wethers are sold, leaving substantial unmet demand in the California markets. So why the production deficit?
Producing meat goats is not a get rich quick scheme. It is not a simple matter of purchasing the first group of goats that comes through the local auction and converting them into perennial producers of golden eggs. Several folks have tried that approach and often are glad to return the goats to the auction muttering under their breath all the way home about the misery they encountered. Like all livestock enterprises and with most of life, what you put into the project is a fair predictor of what you will get out. A wise professor taught me many years ago, that there is more variation within a breed than between breeds. In other words, not all Boers make great goats, not all Nubians, Spanish goats or LaMancha’s make profitable goats. Although, Carrie would argue that there are no bad LaBoer’s! It requires quality stock and they require quality management to achieve the maximum profit levels that are available to good producers. It is my opinion that you can create a profitable meat goat venture if you will start with good business management. Here are a few tips you might find helpful.
· Production records should include (where feasible) birth weights, 60 day weights (mothering and milking ability) and 120 or 150 day weights (rate of gain). These records will allow you to rank your does and cull based on something besides your eye or that ‘Molly’ is your favorite doe because she almost died as a baby and you brought her back to life. · Marketing records; record where you sold individuals and for how much including marketing costs. This will help you develop and refine your marketing skills in future years. · Financial records; keep track of your income and expenses which will help you control costs in future years.
Some does will produce 3 kids and bring them in at 150 days weighing an average of 70 lbs each. Other does will bring in one kid at 150 days at a weight of 60 lbs. While those may be extremes, the point is that not all does will make you the same amount of money. More important you can’t always tell which does are making you the most money by looking at them. That is true for commercial, percentage and fullbloods alike. You need records to succeed!
If you have had opportunity to travel around the country looking at several production units, visit with breeders and read meat goat publications you already know that marketing can do some amazing things. There are numerous junk goats that are sold at big prices through super marketing techniques. There are also some great goats that can be purchased from breeders (who are not marketing wizards) at great prices. I recently received a phone call from a customer who had fallen for a slick ad and some fancy slogans and purchased a Fullblood doe kid sight unseen. Upon receiving the doe kid and comparing her to her contemporaries in their flock they were shocked to discover she now held the dubious honor of being the worst goat in their flock! She has since produced kids that like Mom, have lowered the bar for the flock. She and the kids are now available for purchase.
Profitability in a specific flock is obviously dependent on two factors first, management ability which includes the ability to reduce loss while maximizing gains. Losses include disease management which can result in death loss or reduced gains. Management also includes the ability to make good breeding decisions, nutritional decisions and the proper use of drugs, vitamins and minerals. I am including marketing as part of the management function for purposes of this discussion as the second factor relates to production costs. Production costs while somewhat controllable soon reach the wall where they leave your ability to control them. For example, if your operation is an extensive operation where you have large numbers of animals that are grazed, bred and kidded all under range or pasture conditions, you will have a different cost structure per animal that an intensive operation where your animals are held in confinement for much or all of the year. Where you live has a direct bearing on feed costs, which are substantially higher for us here at Chalk Creek where we often have to provide all the goats all of their nutritional requirements beginning in early November and it is often mid or late April before they are able to graze. Others of you who are located in warmer climes can decrease your feed costs over ours by as much as 50%. Climatic conditions also have direct impact on costs such as worming where those in high rainfall areas have to worm as often as every 3 weeks, while we only need to worm once or twice a year. Your ability to control production costs will have a direct impact on your profitability. However, dropping costs to the lowest possible level will not always maximize profits.
A cost benefit ratio analysis is helpful in making the determination of where your maximal profit margin occurs. One method for determining cost benefit analysis is to divide a sheet of paper into 4 quadrants. The upper left quadrant is labeled Increased Returns, the lower left quadrant is labeled Decreased Costs, the upper right quadrant is labeled Decreased Returns and the lower right quadrant is labeled Increased Costs. Tally the left and right sides of the sheet and if the number on the left side exceeds the number on the right side, the new practice is a good move as it will increase income. If the left side is higher, then the cost exceeds the benefits and the new practice should not be implemented. For Example: The new management tool being considered is a
The economics of the meat goat industry are strong. All indicators point to a strong sustained growth period during the next several years. While raising meat goats is not a get rich quick scheme, it does have potential to provide positive annual returns for good managers who control costs for maximum profits. Specific analysis can be completed for your operation, if you need assistance, please give us a call. |
Send mail to carrie@chalkcreekboers.com with
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