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Profitability and Goats
By Robert Spencer

If you are reading this article it is probably February and you are starting to think about income taxes, which includes farm income and expenditures. As a goat farmer (or any type of farmer) the big question is, did my farm produce a profit or not?

The words goat production and profitability are two words that do not always go together. In the six years I have been in the business of raising goats, my farming operation has not yielded a profit.

I had seven years of college education that supposedly taught me the science of Agribusiness and Agribusiness Management. It was during that time I learned the challenges of farming and profitability. Unfortunately, reality will not allow farmers the capability that one of my professors suggested to us one day, "If the numbers don’t show a profit, then change the numbers." Farmers are in a predicament that sets them as price takers and not price makers. As managers of our farm it is up to each one of us to determine how to manage the financial aspects of our farms in a way that results in profitability; or we can minimize our losses and try better next year.

Those familiar with business, agribusiness, or business plans know about enterprise budgets. They are a financial evaluation and management tool that documents, examines, and compares farm incomes and expenses in a way that will help farmers identify how to effectively manage expenditures and identify the potential to improve incomes. From time to time I have taken a look at enterprise budgets relevant to goat production and begun to realize I cannot retire anytime soon or rely on my goats to provide an income that will allow me the lifestyle to which I have become accustomed! I have attended goat producer meetings and searched the Internet and still not found a single enterprise budget for meat goat production that bears good news.

In Alabama, Max Range, an economist with the Alabama Cooperative Extension System (ACES) has developed and published an enterprise budget that is available on Extension’s website. You can find it by getting on the Internet and going to the Auburn website: http://www.ag.auburn.edu/agec/pubs/budgets/Meatgoats.html. The enterprise budget presents information relevant to meat goat production within Alabama, and has an interactive component in Excel that will allow the user to enter data relevant to the user’s farm. When complete, the report will show profit or losses relevant to each individual user.

The enterprise budget Mr. Range has put together is based on a fifty doe and two buck operation with fifty plus kids being sold. He has made a concerted effort and computed two different budgets, one based on high inputs, the other based on low inputs. The end result in either budget looks bleak when it comes to the final figures, return to risk management. Let’s just say profits with a negative number are not good.

The numbers in his interactive budget can be altered to better represent your farm situation, and the recalculation might improve results. But, based on other meat goat enterprise budgets I have looked at, it does not get much better. A few other sites with enterprise budgets for meat goat production are found at: University of Kentucky, Penn State, Ohio State University, and Langston University; the list goes on. None of them show that we can expect to get rich raising meat goats (or dairy goats).

My recommendation would be to print out the enterprise budget found on the ACES website, review it, and then start plugging in numbers from your farm. Such an experience will help you more readily identify expenditures that can be reduced. Hopefully it will also encourage you to start thinking about ways to add value to your farm product, which should increase farm income, which might even result in profitability.

A few years ago I remember hearing Dr. Frank Pinkerton speak during a goat workshop in North Alabama. He made a statement regarding goat production and profitability that has stuck with me for years, "I’ve made a lot more money from speaking on goat production than I have from actually producing goats." After six years of being recognized as a specialist in goat production, and raising goats on my farm, I definitely agree with Dr. Pinkerton’s statement. It takes one of two things to support a farmer’s "goat habit," either an off-farm job or a retirement pension. It takes either one for someone to live comfortably and still raise goats. I’ll be the first to admit, despite the reality my goat farm has never made a profit and probably never will, I still enjoy being a goat farmer.

Robert Spencer is the Urban Regional Extension Specialist in the Urban Affairs and New Nontraditional Programs Unit & The Urban Centers in North America for the Alabama Cooperative Extension System.



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Date Last Updated January, 2006