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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. |
