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Will breeding meat goats pay?
Before you begin to set up your property for goats or, indeed, any new enterprise, it is essential to do some in-depth research. If it is necessary to obtain finance for your new enterprise, your bank manager will usually want to see a business plan. If you do not have the expertise to create a business plan, TAFE courses held during the year throughout Australia will teach you how.
The first and perhaps most important step is to investigate your potential market. Look at whether your target market is a year-round market, such as the US restaurant trade, or seasonal, such as the Taiwanese market. Enquire about the age and type of stock preferred by each market, and the maximum and minimum numbers buyers will purchase at any one time. Also take into account the distance from your nearest saleyard, abattoir or port.
There are several factors to be taken into account when looking at the costs and inputs of setting up and running a goat meat production enterprise:
- ⢠Distance. The distance to the nearest abattoir should be as short as possible. If goats are on a transport for more than 12 hours, they can become very dehydrated and will lose several kilos in bodyweight. Some goats will die if very dehydrated. Your profit will decrease considerably; in most markets, the price paid for goats is calculated on the hot-dressed carcass weight (HCW). Dehydration can be reduced significantly by transporting the goats at night, when conditions are cooler. Transporting goats at night is therefore good practice in summer.
- ⢠Transport costs. Most companies charge per kilometre, so the longer the distance to the saleyards, abattoir or port of embarkation for the goats, the higher the freight cost.
- ⢠The cost of set-up, including fencing, dams, plant, buildings and stock, must also be considered.
- ⢠In marginal areas subject to dry conditions, will the possible future profit justify the cost of feed and supplements? These can be considerable and must be taken into account. It is useful to look at the average rainfall in the area where you intend to buy land. It is of course more difficult now to estimate rainfall in a particular area, due to climatic change. However, past records will give a rough guide to what can be expected.
- ⢠The cost of labour must be considered. If you are running up to 500 breeding goats, you may need help only occasionally, at drenching, marking (castrating) or tagging times. Frequently, this help is provided by family or friends. If you are running a larger enterprise, then you may need more assistance than can be given by family or friends. If so, you will need to employ paid workers and thus the cost of wages, insurance and superannuation will have to be taken into account.
- ⢠Management inputs. These include such things as ear tags, footrot shears, vaccines, medications and labour.
These are just some of costs involved in setting up and carrying on a meat goat enterprise. In a goat meat breeding enterprise, the main income usually derives from the meat goats, whether bred for the domestic or export market. However, not all goats sold for meat come from producers who breed exclusively for the meat market. In Western Australia, there is a good export market for capretto (kid meat). These kids are turned off from Angora goat flocks, either because they are unwanted males or females which do not meet the breederās standards, or are surplus to requirements. There is also a good market for capretto in Australia because of the growing population of people of Greek and Italian background where it is traditionally served at Easter.
Another source of income is the sale of replacement does for breeding, or stud bucks to improve bloodlines within a herd. Most producers now breed from full-blood South African Boer bucks, but some are beginning to use Red Boers and Kalahari Red bucks. A third breed of registered Boer goat has also recently begun to appear in some herds. This breed is known as the painted Boer Goat. The only real difference in the various colour types of Boer goats is the colour, as all three colour types share the same high birth weight and rapid growth rate. A fourth breed, the South African Savannah Goat (see Chapter 3), has been introduced in the past few years, with similar conformation to the South African Boer goat.
The Kalahari Red has a similar appearance to the South African Boer goat, but is mainly red, slightly lighter in bodyweight and longer-legged. They are a little more resistant to the harsh Australian conditions, as the longer legs allow them to travel over greater distances in search of browse and grazing.
Selling service from your bucks or hiring them to other breeders can also earn a few extra dollars. It is a good idea to be very cautious about this, because there are several diseases and parasites that can be transmitted. Before we allow our bucks to service a doe or does, we need to know the producer, the herd and the source of its goats. We always thoroughly examine the does to be serviced and if we have any doubt whatsoever, we refuse service. It is too late for regrets once footrot, coccidia or a contagious disease is introduced into your herd.
Sale of fleece from your goats is another source of income. Because many of the feral goats used as foundation stock in meat goat herds carry good-quality cashmere (as do several South African Boer goats), their fleece can be harvested by shearing before shedding season. Shearing is not difficult to learn and classes are held at various properties to teach the technique. There is a good domestic market for cashmere fleece and further information on cashmere markets in Australia can be found on the Australian Cashmere Growers Association Inc. website.
The sale of goat manure can also be a good extra source of income. If goats are shedded each night, there will a considerable build-up of manure in the pens. This can be regarded as either a problem or an asset. Goat manure is excellent for citrus trees and we have always had willing buyers for this goat by-product. Citrus growers buy it by the trailer-load and usually do the raking and shovelling themselves. Nurseries that specialise in native plants also buy goat manure, as it releases its nutrients more slowly than chook manure, for instance.
A more accurate way to calculate whether it will be worthwhile and profitable to breed meat goats is by calculating a gross margin for your proposed enterprise.
The following DPI and Fisheries Note is reproduced with the kind permission of Department of Primary Industries and Fisheries Queensland and the authors (Cathcart et al. 2001).
Selecting and preparing the property
Before you buy a single goat, or accept some as a gift (as we did), you must select the land, put in appropriate fencing and shelter, and ensure that there is an adequate supply of good clean water available in all paddocks.
Goats can be run on many types of country and have been successfully grown, harvested and marketed for meat from the inland of Australia to the coast. Each environment has its advantages and disadvantages.
Land for keeping goats does not have to be top grazing country; if it has some shrubs and weeds, so much the better. Goats are browsing animals that appreciate a mixture of shrubs, woody weeds, herbs and different pasture types. They are very fond of wattle, mulga and Brigalow scrub, for instance. If cattle and sheep can be run on your property, you can usually run goats successfully. Goats can also be run on country that is too steep or rocky for other types of livestock; this is useful if you have areas that are otherwise unproductive.
Calculating a gross margin for sheep, goat and cattle enterprises
When establishing a new enterprise, it is important to consider the economic value it will contribute to the whole business. A quick way to assess the performance of a new livestock enterprise is to calculate a gross margin.
A gross margin enables producers to evaluate their existing enterprise performance; for those who are contemplating investing in a new enterprise, it provides a guide to estimating a gross margin.
A gross margin is the value of enterprise output (comprising inventory changes and net livestock trading) less the variable costs attributable to the enterprise. This allows comparison to be made between enterprises, for example sheep, goats and cattle.
The gross margin does not measure profit. It shows the contribution of each enterprise to fixed costs, interest and capital expenditure. Therefore, enterprises can be compared on the basis of their gross margins, provided fixed costs are the same.
How to calculate a gross margin
You can calculate the gross margin for a flock or herd that changes in size between the start and end of the year ā as happens in most flocks or herds in most years ā in the following way.
Gross margin = value of enterprise output ā variable costs
Gross margin = (net trading + inventory change) ā variable costs
where ānet tradingā ($) = sales ā purchases, and āinventory changeā ($) = (closing number ā opening number) Ć per head market value.
Note: if the flock is in a āsteady-stateā situation (opening and closing inventory are the same), the value of output from the enterprise is the value of net animal trading. If the enterprise is not steady-state, change in inventory must be accounted for.
Other terms that you need to be familiar with include:
- ⢠variable costs: those that vary directly with the number of stock. This includes animal health, fodder, livestock freight, ear tags, selling costs and some contract labour such as mustering;
- ⢠fixed costs: those that do not vary with the number of stock run. Examples of fixed costs are accountancy, electricity, insurance (general, not livestock), repairs and maintenance, fuel and oil, rates and rents, operatorās labour allowances;
- ⢠dry sheep equivalent (DSE): the nutritional requirement of a 50 kg dry (non-lactating) sheep. This enables different classes of animals ...