Goat Budgets

A decision tool you can use.

Roger SahsExtension Specialist, Ag Economics

Oklahoma State University

Meat Goat Investment CostsNo. Units $/Unit % to

Herd$/Doe

Does 50 Head $125 100 125

Bucks 2 Head $300 100 12

Vehicle 1 Pickup $17,500 25 88

Tractor 1 $25,000 25 125

Baler 1 $12,500 50 125

Swather 1 $7,500 50 75

Equipment $1,500 100 30

Native pasture 20 Acres $1,500 100 600

Barn $25,000 50 250

Total $1,430

Farm and Ranch RealitiesAnnual per acre payments: 30 year loan*

Interest rate

Land price per acre

6% 8% 10%

$ 500 36 44 53

$ 1000 72 89 106

$ 1500 109 133 159

$ 2000 145 177 212

*Land loan is based on 90% of land price.

Uses of production and financial information

Historical analysis Monitor current performance Forward planning

Enterprise Budget

An Enterprise Budget estimates the full economic costs and returns expected to accrue to a production activity – raising goats, producing grain or forage – for one year.

Enterprise Budget Allows for consistent evaluation of

alternative enterprises What’s included --

Production Goal, technique, resources required, returns

Costs Variable and fixed

Why Budget?

1st step in developing marketing/business plan Evaluate options before you commit resources Estimate potential income Estimate the size of operation needed to earn a

specified return Compare the profitability of two or more

systems of production Identify production and financial risks and

whether they may be managed

Budgets can help with “what-ifs”

Management change Impact

5% in weaning % ? lbs per doe, $? per doe

5% in feed costs $? per doe

5% in grazing costs $? per doe

5% in other costs $? per doe

market price by $5/cwt $? per doe

Total $? per doe

Food for thought…..

You don’t know if you are making a profit unless you know your costs of production.

If you can’t pencil in a profit, you aren’t likely to plow (or raise) one!

OSU Enterprise Budget Software

Excel spreadsheet-based software -

24 Crop/livestock commodities $20 each, 5 for $75, $250 entire set Free data updates available

Available via CD or online http://www.agecon.okstate.edu/budgets

Other Sources of Budget Information

Books on goat production and industry Goat producer organizations Other goat operations University specialists, educational

materials, and meetings Websites – Langston Univ. Web-based training and certification

http://www2.luresext.edu/goats/training/qa.html

Ten Commandments for Farmers/Ranchers

Focus on financial management as much as production performance.

Count your goats (and other assets) at least annually.

Keep your lender happy. Code your checks and sort your expenses

for enterprise accounting. Develop a record-keeping and information

system that works for you.

Ten Commandments for Farmers/Ranchers

Don’t just minimize taxes, maximize after tax income.

Don’t expect too much from your does. Never stop learning. Go slowly when attempting new things. Match the livestock and crop enterprises

to the land resource.

The Bottom Line - Make sure your operation is as cost-effective

as possible. Identify production practices that will lower

costs. Find leverage points that will generate the

most bang for the buck. Benchmark the competition.

Questions??