Business Management & Marketing of Meat Goats :Business Management & Marketing of Meat Goats James “JJ” Jones Area Ag Economist


First Things First :First Things First Must decide what type of goat operation? Market Purebred/Seedstock Purebred/Show Ring Hobby Develop a business plan


The Business Plan :The Business Plan Mission or vision statement and goals Key planning assumptions Market analysis and marketing plan Operations, organization, and management Financial plan


Market Analysis :Market Analysis Demand (U.S.) 36.6 million pounds consumed (2001) 12.6 million pounds imported (2001) 21.2 million pounds imported (2005)


Goat Meat Imports :Goat Meat Imports + 68.4%


Market Analysis :Market Analysis Demand (U.S.) 36.6 million pounds consumed (2001) 12.6 million pounds imported (2001) 21.2 million pounds imported (2005) Supply 2.86 million head 2 million breeding 800,000 kids


Slide 7: 1,000,000 100,000 to 1,000,000 2006 U.S. Meat Goat Numbers Source: NASS U.S. Total: 2,260,000


Slide 8:Southern Region Goat Numbers Texas (1) 1,080,000 Tennessee (2) 103,000 Georgia (3) 95,000 Oklahoma (5) 74,000 Kentucky (7) 68,000 North Carolina (8) 60,000 Florida (9) 55,000 South Carolina (10) 44,000 Alabama (11) 43,000 Virginia (12) 41,000 Arkansas (14) 29,000 Mississippi (18) 24,000 Louisiana (27) 12,800 Total 1,728,800 76.5% of U.S. Total


Slide 9:2005 U.S. Inspected Slaughter New Jersey 209,156 37% 2. Texas 38,079 6.7% 3. Pennsylvania 37,041 6.6% 4. New York 33,459 5.9% 5. Tennessee 29,692 5.2% 6. DE/MD 25,682 4.5% 7. Illinois 25,660 4.5% 9. California 22,214 3.9% 8. Indiana 22,899 4% 10. Florida 15,610 2.7% U.S. Total: 566,208 head


The Financial Plan :The Financial Plan Initial financial requirements Enterprise analysis Historical and projected financial statements Risk assessment Break-even analysis


Initial Financial Requirements :Initial Financial Requirements Initial Needs: Land Fences Breeding Animals How many does? How many bucks? Housing for goats Barn Truck & Trailer (or truck box) Green Acres


Fencing Costs :Fencing Costs Need to fence 20 acres Using 48” Netwire, Wooden corner posts (H-Brace) T-Post: 10’ spacing Costs: Wooden Post 12 x 8.38 = 100.56 8 x 3.49 = 27.92 T-Post 260 x 2.99 = 777.40 Netwire 300’ Roll 9 x 212.63 = 1,913.67 Total $2,819.55


Breeding Animals :Breeding Animals Breeding Animals: 50 Does @ $125 = $6,250.00 2 Bucks @ $400 = 800.00 Total $7,050.00 Other Capital Costs: Fencing $2,819.55 Trailer 1,500.00 Total Initial Investment $11,369.55


Initial Investment Costs :Initial Investment Costs What would the payments be over the next 5 years?


Enterprise Analysis :Enterprise Analysis Goat Budget Income Cash Expenses Fixed Expenses Risk Analysis Breakeven Analysis


OSU Goat Budgetagecon.okstate.edu/budgets/ :OSU Goat Budgetagecon.okstate.edu/budgets/ Assumptions: 50 Does 160% Kidding Percentage 10% Death Loss Kid selling price = $1.00/lbs Supplement during winter & after kidding Breeding Season: Nov – Feb Kidding Season: Mar – June


Slide 17:Income: Market Kids 93.80 Culls 7.03 Total Income $100.83 Cash Costs: Supplement 28.91 Hay 16.71 Mineral 1.80 Vet 2.74 Marketing 5.36 Fuel & Oil 4.23 Operating Capital 2.15 Total Cash Costs $61.90 Returns over Cash Costs $38.93 Fixed Costs: Depreciation 21.00 Interest 11.22 Taxes & Insurance 2.87 Total Fixed Costs $35.09 Returns over Cash & Fixed Costs $3.84 Meat Goat Budget Per Doe


Risk Analysis :Risk Analysis


Breakeven Analysis :Breakeven Analysis Breakeven needed to cover cash costs: (Cash Costs – Cull Income) / lbs prod per doe 54.87 / 93.8 = $0.59/lbs Breakeven needed to cover all costs: (Total Costs – Cull Income) / lbs prod per doe $89.96 / 93.8 = $0.96/lbs


Marketing Plan :Marketing Plan To develop a marketing plan a producer must answer the three W’s. What Market or replacements Where Local, off the farm, production sale When At weaning, time of year, etc.


Goat Marketing Channels :Goat Marketing Channels Producer Consumer Trader/ Middleman Local Market Regional Market Processors Purveyors Cooperatives Food Service Retail Local Market Regional Market


Seasonal Price Patterns :Seasonal Price Patterns


Holiday Demand :Holiday Demand


Holiday Demand :Holiday Demand


Meat Goat Industry Challenges :Meat Goat Industry Challenges Production diversity and multiple products Demand diversity Geographic dispersion of production and consumption Seasonality of supply and demand Fragmented and limited market infrastructure Lack of market information


Summary :Summary Determine the type of goat operation Evaluate your business options Develop a business plan Develop a marketing plan Be flexible enough to change when the situation changes Do not stop trying to learn!


Slide 27:Questions?