Price Trends Can Help Producers

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I have been tracking the prices from Producers Livestock Auction in San Angelo, TX since January 1998. They update the sheep and goat auction prices every Wednesday evening at the USDA website. The address is http://www.ams.usda.gov/mnreports/SA_LS320.txt I enter the data in a spreadsheet every week and maintain several graphs that make it easier to see trends and compare the data.

Hopefully, Terry got the graph along with the text for my column and it appears somewhere on this page in a large enough size where you can see everything.

The prices are going to vary between different markets, but the price trends you see should be universal. The prices I graphed are the highest prices paid that day for each size range of kid. Keep in mind that there is a low price also which is usually about $.10/lb lower than the high price. I didn't include those because the graph is too cluttered with all four lines on it. Until recently the data was not reported very consistently as far as weight ranges, one week you would get 30-40 lb kids and the next it might be 30-50 lb kids, but you can still get some important information from the graph. I did not include the larger kid sizes because they trade so infrequently that the graph is meaningless.

The first, and most important thing, you can tell from this graph is that kid goats have a fairly predictable annual price cycle. Every year prices peak around Easter, then they steadily decline until they bottom out in early summer, they stay low throughout the summer, then start to climb again around October. You should use this information when planning for your operation so that your kids will be ready for market when prices will be highest.

Another encouraging trend has been the general increase in prices for comparable months every year. For instance, in 1998 the spring peak was about $.98 per lb. The next year the price peaked at $1.09 per lb. In 2000 the price peak was $1.15 per lb., and finally last year the price spiked all the way to $1.47 per lb. The low prices have also been better the last few years. In 1998 the summer months saw prices in the mid $.70 per lb range, last year the market bottom was a full $.10 per lb better than that. This shows that the demand for goat meat continues to grow faster than the supply. If possible you should be increasing the size of your herd to take advantage of the increasing demand.

The graph also shows that the larger kids generally sell for slightly less on a per lb basis than the lighter kids. Keep in mind though that larger kids will bring more per head than the light kids even with the slightly lower price per lb. You can use this info to make decisions about the size of kid you wish to sell.

There is another development in the slaughter goat market that you should be aware of. Every spring I get calls directly from slaughter facilities wanting to purchase kid goats. The worrisome part about that is that they want to base the price they pay on the 24 month moving average price for that size goat. These calls always come in the spring when prices are far above average for the year, and started last year when prices in general were far above average.

This would be a great deal for the producer who has managed his production poorly and has a bunch of kids he needs to sell in August, but again I don't get these calls in August. The calls come from January until April. If the packer is interested in paying the average price, all he needs to do is buy the same quantity of goats weekly throughout the year through the auction. In the end the packer would then end up paying the average price.

What this looks like to me is a ploy by the packers to purchase goats in the spring at a huge discount over what they would pay at the sale barn, then in the summer when prices are low return to the sale barn to buy goats at below average prices. You can't blame them for trying. I recommend that you manage your production so that your kids are ready for sale when prices are high, and that you demand the full market price for them.

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Last month my column addressed kidding season tips. A few days after I received my issue a friend brought it to my attention that someone had a big difference of opinion with my suggestion that producers give serious consideration to moving their kidding season to late summer (keep in mind late summer is September), and was airing his difference of opinion along with his opinions about me personally on one of the internet email groups. The last part particularly bothered me since I have never met or spoken with this person. I have since corresponded with him and discussed the matter, so this is not meant as a criticism of anyone in particular. Rather I raise the issue to discuss a few things that I feel my readers should know.

I write this column for a national audience, which makes it very difficult if not impossible to present ideas that are always going to be advisable for everybody. Conditions are too different on operations located even across the road from one another, let alone across the country, for every idea I present to work for everybody. Rather I put the ideas out there along with some of the pros and cons so that individual producers can evaluate the ideas and decide if they would improve their operation. There may be advantages or disadvantages to an idea that I hadn't thought of or that are peculiar to your locale that would make the idea particularly good or bad for your operation. I try to make it clear in every column that there are places and conditions under which the ideas presented will not work, and that each producer must evaluate whether the ideas will work in their operation before implementing them.

The person who criticized the kidding in the summer idea did so because he said fly strike is a problem in his area at that time of year, and producers would lose a lot of kids. Now I have no idea whether that is the case or not since I have never been to his operation, let alone been there at that time of year. He is in a much better position to know that then I am, and if it will be a significant problem then he shouldn't breed his does to kid at that time of year. Nor should you if you know that you have the same problem.

In my particular area flies are a problem also, but not usually at that time of year. By the end of June conditions on my ranch are too hot and dry for flies to thrive, and they usually disappear about then. They make a reappearance in the fall when we start to get some rain and temperatures cool off, but by then September born kids would be big enough that the flies wouldn't be much of a problem for them.

If you see something in my column that you know will not work for you because of conditions that are unique to your operation then please don't implement the idea. If you know that the reason the idea will not work is true of every operation in your area of the country and I didn't mention that potential problem, please send me a note making me aware of the problem so I can mention it in my next column. That way the correction will go to the people who saw the idea in the first place. If you put it out on the internet instead, the number of my readers who are going to see it is minimal.

Finally, just because one of the ideas in my column won't be the greatest thing since sliced bread for your operation, doesn't mean that you need to send out a sarcastic critique of both the idea and me. A simple note saying, "hey Martin, in my area we have a big problem with fly strike in late summer so producers in my area would lose a lot of kids if they moved their kidding season to that time of year" is sufficient.

Again, I don't offer the above as a criticism of anyone in particular, but rather to let you the reader know that I encourage feedback so I can give the best advice possible. My contact information is at the bottom of every column in case you need to respond to something in one of my columns.

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This page updated 02/19/02

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