Purdue University Dairy Goats Information

ECONOMICS OF GOAT RAISING

Mac Mendell, Undergraduate Student, Dept. of Animal Sciences

FARMING “FOR PROFIT”

To qualify for favorable tax treatment as a farmer or goat producer, one must establish that one is in business to make a profit. A farming operation is assumed to be “for profit” if it has reported a profit in three (3) of the last five (5) tax years, including the current year (IRS code, section 183). If you fail the three years of profit test, you may still qualify as a “for profit” enterprise if your intention is to make a profit. Some federal agencies define a farm as having at least $1000 in gross revenues from agricultural products.

PROFIT FROM PRODUCTION

Profit margins in agricultural enterprises tend to be small, but it is possible to make a profit raising goats, particularly if costs are controlled and returns from marketing are maximized. In the goat enterprise, “profit” is expressed in many different ways: income above variable costs, income above fixed costs, profit per head, profit per month, profit per acre, profit from milk production, return on assets (investment), etc.

The three most important factors affecting profitability of the goat enterprise are feed cost, percent kid crop and market prices. Producers can control feed costs by maximizing the use of pasture and browse, producing their own harvested feeds, mixing their own rations, shopping around for feed ingredients, buying and storing feed in bulk, minimizing feed wastage and weighing all feed inputs.

The second largest cost associated with raising goats is veterinary care. While goat producers need to work with a veterinarian on herd health programs, they should learn how to perform most of their own veterinary tasks, such as castrations, disbudding, vaccinations, deworming, foot care, injections, etc. Producers should maintain an appropriate “medicine cabinet” so that they may treat common conditions, instead of taking the goat to a vet or calling for a farm visit.

Treating goats for internal parasites can be very costly on a per animal or per year basis. Nevertheless, because goats will most likely be browsing and on pasture or outside yard at least part of the year, internal parasite programs are critical. Producers should strive to minimize the use of expensive anthelmintics by employing pasture management techniques that reduce worm burdens and by using fecal egg counts (such as the FAMACHA system) to pinpoint the need for anthelmintic treatment. Coccidiosis should be prevented rather than treated. Additional details on control of internal parasites may be found in http://www.ces.purdue.edu/extmedia/AS/AS-573-W.pdf.

Percent kid crop or the number of kids marketed per doe exposed to the buck will have significant impact on enterprise profitability. The goal should be to wean two kids per doe per year.  Accelerated kidding – a kidding interval of less than 12 months – is a way to increase reproductive efficiency and reduce overhead, but it is only more profitable if the increased returns from kid sales offset the added cost of feed, medicine and labor.

Because dairy goat milk is still a specialty market, often it can be difficult to find a consistent buyer for bulk raw goat milk from the farm. Remember, in Indiana and many other states, sale of unpasteurized milk (cow or goat) to consumers is illegal. Raw milk can be only used for personal consumption. Recent changes to state law allow goat milk to remain at the farm for up to 7 days if properly cooled. This may allow better opportunities for shipment to a processor. An alternative is to process milk on site and sell products directly to consumers, retailers, or wholesalers. All milk production and processing facilities are subject to dairy inspection under FDA's Pasteurized Milk Ordinance as administered by the dairy inspection program within each state. Check with your local health authorities and the state inspector to make sure all criteria are met. Initial costs of a milking herd to meet all state requirements will increase, but increases the potential for higher milk profits.

It is critical to have a market identified and a marketing plan in place before beginning a dairy goat enterprise.

(Information sources include Maryland Cooperative Extension and University of Missouri Extension)


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