Berdikul Qushim, Benedict, Linda F. | 10/12/2016 4:44:09 PM
Berdikul Qushim, Jeffrey M. Gillespie and Kenneth McMillin
The U.S. meat goat industry has expanded significantly since the early 1990s with the majority of meat goat production located in the Southeastern region. The extended grazing period, amenable weather, less expensive goat housing, and lower dependence on conserved or stockpiled forages make for a favorable environment for meat goat production in the Southeast. The economics of U.S. meat goat production has been studied little, with the consequence that there is limited information on the subject. Research was carried out on meat goat production costs and returns and production efficiency of Southeastern U.S. commercial meat goat producers.
LSU AgCenter researchers surveyed Southeastern U.S. meat goat producers by mail to gather information about their costs and returns associated with meat goat production. Southeastern states included in the survey were Alabama, Arkansas, Georgia, Florida, Kentucky, Louisiana, Mississippi, North Carolina, Eastern Oklahoma, South Carolina, Tennessee, Eastern Texas, Virginia and West Virginia. The sample for this study included 61 farms across the South, including six in Louisiana. The cost analysis for Southeastern U.S. meat goat production is based on three meat goat operation sizes—small, medium and large, depending on acres of goat production land, number of breeding does, and number of meat goats.
The farms were further defined as those with goat sales greater than 50 percent for slaughter, those with goat sales greater than 50 percent for breeding or show, and those with goat sales greater than 50 percent for purposes other than slaughter, breeding or show. In the sample, 32 percent were slaughter, 33 percent were breeding or show, and 35 percent were “other.” Among size categories, the percentages did not differ significantly. Thus, any differences in cost structure among those segments would not be expected to strongly impact cost differences by size.
In analyzing production costs, variable expenses are those expenses that vary along with the amount produced, such as feed or veterinary services. Fixed expenses are those that do not vary with the amount produced, such as insurance and depreciation on equipment. The study results indicate that meat goat total, variable and fixed expenses per acre for large-sized farms were lower than for small-sized farms. Furthermore, total, variable and fixed expenses per acre for large-sized farms were lower than for medium-sized farms, and medium-sized farms had lower variable and total expenses per acre than did small farms. These results indicate that increasing the size of meat goat farms leads to lower costs per acre. See Table 1.
Meat goat enterprise total and fixed expenses per breeding doe for large-sized farms were lower than for small-sized farms. These results indicate that increasing the size of meat goat farms leads to lower costs per breeding doe. See Table 2.
Meat goat total and variable expenses per meat goat produced on medium- and large-sized farms were lower than for small-sized farms. Meat goat fixed expenses per meat goat produced on large-sized farms were lower than for small-sized farms. These results indicate that larger meat goat farms had lower costs per meat goat produced. See Table 3.
Scale efficiency is the potential productivity gain from achieving an optimally sized farm. The results of an efficiency analysis of Southeastern U.S. meat goat farms show an average technical efficiency of 0.81, which means that the average Southeastern U.S. meat goat farm could reduce about 19 percent of total inputs to produce the same output as a fully efficient farm. This suggests there is much room for more efficient input usage. Results on economic performance measures such as the estimated “returns to scale” for Southeastern U.S. meat goat enterprises show that a 10 percent increase in all outputs resulted from increased overall input use of 7.9 percent, suggesting that farms can become larger and reduce input usage per meat goat produced. A measure of “scale efficiency” indicates that Southeastern U.S. meat goat farms are on average operating at an efficient operation size if the farm’s scale of production is greater than 60 goats or greater than 40 breeding does. This means that any reduction of farm operation size below those numbers will make the farm less “scale efficient.”
All of these efficiency and cost analyses show that the size of a meat goat operation is important in determining its competitiveness. In this study, the average farm producing 60 goats farmed about 40 acres in goats, which is a relatively small farm by U.S. standards.
Results from this study suggest that extension educational efforts could result in greater increases in farm efficiency if directed to small-scale producers who are full-time farmers, those who are less specialized in meat goat production, and those who have lower education levels. Extension education can help and encourage small-scale meat goat farmers with low technical efficiency levels to use information on new technologies and better farming practices to improve farming efficiency and productivity.
Berdikul Qushim is a research associate, and Jeffrey M. Gillespie is the former Martin D. Woodin Endowed Professor in the Department of Agricultural Economics and Agribusiness. Kenneth McMillin is Mr. and Mrs. Herman E. McFatter Endowed Professor in the School of Animal Sciences.
The LSU AgCenter keeps a herd of Savannah goats, which are meat-producing goats, at the Central Research Station in Baton Rouge. The goat herd was established about 20 years ago to supply goats for animal disease and immunology research and occasional class use. More recently the goat herd has also been used for meat production research. The Savannahs do not require as much attention during kidding season as other breeds and are a little more drought and heat tolerant than other breeds. Photo by Olivia McClure
Table 1. Expenses per acre of goat production land.
Table 2. Expenses per breeding doe.
Table 3. Expenses per meat goat produced.