Updated April 2008 This publication is intended to be used by producers who are: - interested in learning more about the economics and production aspects of a meat goat enterprise; or
- already in production and would like to compare costs at different levels of production in order to make management decisions.
This publication is intended to provide a format and a set of guidelines for determining costs of production for meat goat operations. The production costs included in these enterprise budgets are estimates based on information obtained from goat producers in the province. While these figures were considered accurate at the time, they should only be used as a guideline when preparing budgets for your own operation. The benchmark figures used in the budgets are calculated for a stand-alone enterprise rather than an enterprise that is part of a multi-enterprise farm unit. In a multi-enterprise farm operation, building and equipment investment and operating costs may be shared between enterprises and could be less than what is shown in the example. It is important to recognize that investment costs include a four per cent return to the land, and a six per cent return to buildings, equipment, and breeding stock. A charge for operator management and labour has also been included. Given the economic environment in agriculture, many types of farm operations are not able to cover all costs of production. As a result, producers need to use their own figures based on their own practices to evaluate various production alternatives to generate the greatest return from their available resources. Market Overview While goat meat is eaten worldwide than any other type of red meat, very little of it is consumed in North America (Alberta Agriculture, 1994). However, as people continue to immigrate to North America from traditional goat consuming nations, the domestic demand for goat meat in these ethnic markets continues to increase. This ethnic demand for goat meat is derived from a number of social and religious traditions. Two of the main demand peaks occur in early spring and late fall which coincide with the religious holidays of Ramadam and Eid. Demand for specific carcass sizes also varies within each market segment. The four main size classes that are demanded are 30 lbs., 60 lbs., 90 lbs. and 150 lbs. (above weight classes are on a live-weight basis). Prices can vary considerably between each market so it is important for producers to understand the markets they are targeting and tailor their production to meet these standards. Management Decisions - Consideration must be given to various areas of management, including production, finance, marketing and human resources.
- What classes or categories of kids are you planning on producing? This may vary with demand, timing and ability of the operator. Does the plan include sale of breeding stock?
- Investment and financial requirements can vary substantially. Is your plan to have the goat enterprise a part of other farm enterprises, standalone, combined with off-farm employment or any combination of these? Does your lender understand the business you are financing?
- Marketing decisions are important considerations. Who and where is the market? Do you have established buyers and what is the method of transaction? Are contracts or other arrangements in order? Are prices net of marketing costs and shrink or do you negotiate a price and pay all other fees?
Assumptions 1. Buildings and equipment are valued at market value.
2. All feed is valued at market value.
3. Manure removal is contracted out.
4. Five doelings are retained each year for replacements.
5. Average productive life of a doe is 10 years.
6. Average productive life of a buck is six years.
7. On average one mature buck is required per 50 does. More bucks will be needed if young bucks are utilized.
8. Does are pastured on 80 acres for 120 days after kids have been weaned.
9. Kids are removed from does at three months of age and fed and/or pastured to a finished weight of 60 to 90 lbs.
Herd Profile | Total | Your Farm | Number of does | 100 | _________ | Number of bucks | 2 | _________ | Doe mortality rate (%) | 2% | _________ | Doe cull rate (%) | 3% | _________ | Kid weaning rate (%) | 175% | _________ | Kid post-weaning mortality rate (%) | 5% | _________ | Kids marketed | 140 | _________ | Kids sold into market one (30-60 lb.) | 0 | _________ | Kids sold into market two (60-90 lb.) | 140 | _________ | Kids sold into market four (150 lbs.) | 0 | _________ | Breeding stock sold | 27 | _________ |
- If using young bucks, increase the number of bucks to be used for breeding purposes.
- Kids marketed is equal to the number of kids weaned less post-weaning mortality, doelings retained for replacements and breeding stock sales.
- For this scenario, all kids are marketed at an average weight of 85 lbs. and some female stock sold as breeding stock.
Capital Investment | Buildings: | Your Farm | Barns, shelters and handling facilities | $9,500 | | _________ | Well and watering bowls | | $4,000 | | _________ | Total Building Cost | | $13,500 | | | | Machinery and Equipment: | | | | | Tractor and loader | | $15,000 | | _________ | Truck (enterprise share) | | $5,000 | | _________ | Miscellaneous equipment | | $5,000 | | _________ | | $25,000 | | | | Land/Pasture: | 80 acres @ $250/ac. | | $20,000 | | _________ | Fence 1.5 miles @ 3303.77/ mile | $4,956 | | _________ | Total land/pasture investment | $24,956 | | | | Breeding Stock: | Does (100 x $200) | $20,000 | | _________ | Bucks (2 x $600) | $1,200 | | _________ | Total Breeding Stock Investment | $21,200 | | | - Value of breeding stock can vary from $100/head to over $1,000/head depending on breed and quality.
| Total Capital Investment | $84,656 | | | | Non-Cash Fixed Cost Calculations | | Your Farm | Depreciation | (Original Cost - Salvage Value) / Useful Life (yrs) | Buildings ($13,500 - 675)/25 yrs. | $513 | | _________ | Equipment ($25,000 - $2,500)/12 yrs. | $1,875 | | _________ | Total Depreciation | $2,388 | | | | Investment Cost | Depreciable Assets: (Original Cost + Salvage Value) / 2 x Interest Rate | Buildings ($13,500 + $675)/ 2 x 6% | $425 | | _________ | Equipment ($25,000 + $2,500)/ 2 x 6% | $825 | | _________ | | Non-Depreciable Assets: Investment Cost = market value x interest rate | Land and pasture ($ 24,956 x 7%) | $1,747 | | _________ | Breeding stock ($21,200 x 6%) | $1,272 | | _________ | Total Investment Cost | | $3,019 | | |
The number and size depicted in this fact sheet is a guide. The viability of each enterprise varies with the operator, investment, management and lifestyle required. Income and Expense Summary for a 100 Doe Commercial Enterprise | | Income | | | $/lbs. | $/Year | $/Doe/Year | Your Farm | | 1 | 30 lbs. kid sales | $0 | $0 | $0 | _________ | | 2 | 60-90 lb. kid sales (140) | $1.45 | $17,255 | $172.55 | _________ | | 3 | Breeding stock (27) | $175/hd | $4,725 | $47.25 | _________ | | 4 | 150 lb. kid sales | $0 | $0 | $0 | _________ | | 5 | Cull sales | $50/hd | $150 | $1.50 | _________ | | | Total Income | | $22,130 | $221.30 | |
| | Operating Costs | | $/Year | $/Doe/Year | Your Farm | | 1.1 | Doe/buck feed cost | | $3,040 | $30.40 | _________ | | 1.2 | Kid feed cost (birth-40 lb.) | $703 | $7.03 | _________ | | 1.3 | Kid feed cost (60-90 lb.) | | $2,678 | $26.78 | _________ | | 1.4 | Kid feed cost (90-150 lb.) | | $0 | $0 | _________ | | | Total Feed Cost | | $6,421 | $64.21 | | | 2 | Straw and bedding | | $400 | $4.00 | _________ | | 3 | Veterinary, medicine and supply costs | | $800 | $8.00 | _________ | | 4 | Maintenance and repairs | | $600 | $6.00 | _________ | | 5 | Utilities | | $100 | $1.00 | _________ | | 6 | Manure removal | | $200 | $2.00 | _________ | | 7 | Insurance | | $250 | $2.50 | _________ | | 8 | Annualized buck replacement cost | $100 | $1.00 | _________ | | 9 | Office supplies and accounting | $250 | $2.50 | _________ | | 10 | Market cost | | $500 | $5.00 | _________ | | 11 | Predator control dog | | $220 | $2.20 | _________ | | 12 | Property taxes | | $360 | $3.60 | _________ | | | Subtotal Operating Costs | $3,780 | $37.80 | | | 13 | Operating interest | | $369 | $3.69 | _________ | | Total Operating Costs | | $10,570 | $105.70 | | | Non-Cash Fixed Costs | | | | | | 1 | Depreciation | | $2,388 | $23.88 | _________ | | 2 | Investment | | $3,019 | $30.19 | _________ | | | Total Fixed Costs | | $5,407 | $54.07 | | | Total Operating and Fixed Costs | | $15,977 | $159.77 | _________ | | 3 | Labour | | $2,000 | $20.00 | _________ | | Total Cost of Production | | $17,977 | $179.77 | | | Net Return | | | $4,153 | $41.53 | _________ | | Breakeven price required to cover: | | | $/lb. | | | Operating cost | | | $0.75 | _________ | | Operating and fixed cost | | | $1.13 | _________ | | Operating, fixed cost and labour | | | $1.27 | _________ |
Producers are likely to sell goats in all categories and weight ranges during a production cycle. (Lower weight kids require higher prices to cover variable and fixed costs.) We used an average weight of 85 lbs. as operations are more likely to achieve profit at this goat weight. The income figures used in this example is a gross revenue per kid. Doe/buck feed costs are based on three to four lbs. of hay and one to 1.5 lbs. of grain per day plus required salt and minerals. Pasture is included in fixed costs. Birth to 40 lbs. incorporates both a hay and prepared ration supplement. From 40 to 75 lbs. a hay, grain, mineral and salt ration is fed (3/4 to 2.5 lbs. of hay/day and 1/2 to 1 lb. of grain plus pasture). Marketing costs can vary with sales arrangements or contracts. This example incorporates a $19.25 marketing/transportation cost/kid. (Some contracts can be arranged with pick-up off farm.) Operating interest is based on 1/3 of operating costs at a nine per cent interest rate. Break-even price including breeding stock sales and related costs.
Prepared by: Tara Jaboeuf, Livestock Development Specialist: Sheep and Goats, Livestock Development Branch, Ministry of Agriculture. Information Sources - Alberta Agriculture, Food and Rural Development. Meat Goats. Publishing Branch, Alberta Agriculture and Food. 1994.
- Saskatchewan goat producers.
For more information, contact: Agriculture Knowledge Centre
Saskatchewan Ministry of Agriculture
Toll Free: 1-866-457-2377 Livestock Development Specialist, Sheep and Goats
Livestock Development Branch
Saskatchewan Ministry of Agriculture
Telephone: (306) 933-5099 Saskatchewan Goat Breeders Association
Guenette Bautz
Telephone: (306) 367-2404
Website: http://www.sgba.tripod.com/ Canadian Boer Goat Association
Allison Taylor, General Manager
Telephone: (613) 347-1103
Website: http://www.canadianboergoat.com/
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