|Ethnic Holidays Best Opportunity To Market Goats|
last month's column I said, "I will undoubtedly discuss the timing of
marketing your kids and the different markets available again in future
columns..." After spending the better part of a week trying to come
up with an idea for this month's column I decided that maybe this would be
a good month to write that column, so here it is.
Several times in the last year I have had discussions with producers or seen letters to the editor and columns in industry publications suggesting that producers need to demand more for their product and need to sell larger goats.
Unfortunately, neither of these things is likely to happen. The market for commercial goats is in my opinion a pretty good one. Unlike say the market for cattle or other livestock and poultry where there are only a couple of packers that buy and slaughter most of the supply causing prices to producers to stay low, the commercial goat market is much more competitive. As a result commercial meat goat producers usually get the highest prices per pound for their product.
Demand for goat meat in the US far exceeds the supply, which would tend to cause prices to rise further, except that price increases are limited by the fact that goat meat must compete against other types of meat. Consumers can purchase beef, lamb, chicken, pork, etc. for significantly less than goat, reducing the demand for goat as some consumers choose the less expensive meats.
At some point there is a price where the supply and demand are equal, and that is the price that goat meat should and does sell at. This is Economics 101, and nothing producers can do is going to change the laws of economics.
The only way to increase the prices producers receive is to convince consumers to eat more goat meat, thus increasing the demand for it, and/or to reduce the number of goats available, thus reducing the supply.
Of course, in order for the price to rise further consumers will need to be convinced to pay an even larger premium for the meat than they already do, and producers will have to hope that the increased prices do not cause increased production and lower prices. Short of a really fabulous and expensive marketing campaign, I don't see consumer demand for more expensive goat meat increasing dramatically.
More importantly, if producers could sell their goats for significantly higher prices than they currently receive, there is no doubt in my mind that the higher prices would be short lived as cattle and sheep producers switched to producing goats en masse driving prices back down, possibly to levels much lower than today's prices.
If goat meat were selling for less than other meats I would agree that something needed to be done to get the message out to consumers about how great goat meat is to increase demand and the prices producers receive, but that is not the case. It doesn't matter how superior the product is, there are only so many consumers that are willing and able to pay a premium for it.
The untapped market for goat meat is primarily people who currently consume beef, chicken and/or pork. They have never tried goat, and see no reason to as long as they can buy other relatively healthy meats (chicken and pork) for under $1.50/lb. At certain times of the year goats sell for more per lb on a live weight basis than competing meats sell for in the store display case.
Demand for goat meat will not rise significantly until the meat is priced more competitively. That means the price for goat meat will have to drop, or the price of competing meats will have to rise significantly to boost demand for goat meat.
The result for goat producers of lower prices to the consumer will be low prices and unprofitable operations for producers. Packers and retailers cannot pay over $1.00 per lb for live goats (which translates to over $2.00 per lb for a goat carcass), then be expected to sell the end product to consumers for $1.50 per lb or less.
Significant price increases for chicken and pork seem extremely unlikely, so I don't foresee much of an increase in demand for goat meat at current or higher prices in the near future.
Another advantage of the current market for goat meat that producers should be reluctant to tamper with is that goats are unattractive to big corporate farms and packers, I don't think increasing demand to the point where those entities want to get into it will help small producers. It sure doesn't seem to have helped the people who used to make a living raising other types of livestock and poultry. Do goat producers really want to grow goats on contract for big corporations like the chicken and pork producers do?
Commercial meat goat producers need to give serious consideration to the potential adverse effects increasing the demand for goat meat could have, and should be careful what they wish for (they might just get it).
Producers also have little control over the size of goats that the market demands. Goat meat is largely consumed by various ethnic groups whose cultural and religious influences dictate the types of goats they want.
If producers don't supply what the consumer wants in the quantity they want it in, than supply/demand imbalances occur. The prices for the under-supplied products consumers want will rise until consumers choose cheaper alternative products and/or producers supply the demand.
Conversely, the prices for the over-supplied products that the consumers do not want will fall until consumers decide to buy them and/or producers cut the supply.
Eventually, (barring other outside influences that change the market dynamics) the market would return to what we have today with consumers buying primarily 80 lb and lighter kids, and producers grumbling about not being able to sell heavier goats for high prices. There is a reason the prices for different sizes, sexes, and ages of goats are what they are today.
I don't see goat producers changing the thousands of years of religious and cultural traditions that drive today's goat meat consumer to buy the types of goats that they buy, and I can't understand why producers would want to anyway.
After all, if you can convince consumers to suddenly start demanding 150 lb goats, what is to stop them from deciding they would rather eat cheaper beef, pork or chicken? The best thing meat goat producers have going is the traditions that cause consumers to buy our product even though other meats are less expensive. If those traditions demand that we produce 80 lb and lighter goats than so be it. Leave well enough alone.
Besides, do you really want to sell larger goats? There are several major problems with producing larger slaughter goats that make doing so extremely unattractive even if you could get the same price per lb as you currently get for smaller goats.
First, the additional time and feed it takes to grow the goats to that size will require most producers to cut back the size of their breeding herds.
Even with the best genetics and ideal nutrition it will take about 7 months to produce a 150 lb slaughter animal. If your genetics and/or available nutrition do not support fast gains the time to grow a 150 lb goat could stretch out to 18 months or more.
Once the animals you are raising for slaughter reach the 80 lb or larger size you would have normally sold the kids by, they are basically replacing a breeding doe in your pasture. So instead of having three does raising six kids to 80 lbs or less, you will have one doe raising two kids to 150 lbs or more.
Assuming you can get the same price for 150 lb goats in this new world as you currently get for 80 lb kids, which would you rather sell, six 80 lb kids or two 150 lb goats? For those of you that are bad at math the six kids total up to 480 lbs while the two larger goats are 300 lbs total.
If you want to produce the same amount from your pasture the two goats have to be 240 lbs each when you sell them. Keep in mind that while you are growing those two out you don't have the pasture for anymore new kids so if it takes you 2 years to grow them out to 240 lbs you can only produce one kid crop every 2 years.
Now you are still behind because during that time the three does could have produced 18 80 lb kids for a total of 1,440 lbs of kids on the same amount of pasture that you produced a total of 480 lbs of larger goats off of.
Second, as goats get larger and older their feed efficiency (pounds of feed to produce a pound of weight gain) gets dramatically worse. Small kids gain weight quickly on little feed having feed efficiencies approaching 1 (lower is better) while mature adults have feed efficiencies that are very high (if a goat consumes 7 lbs of feed and gains .1 lb that equals a feed efficiency of 70).
By the time kids exceed 80 lbs their feed efficiencies have risen to 5.9 and at 120 lbs their feed efficiency is up to 7.8 (feed efficiencies are for goats on pellets during warm weather, same size goats on pasture or on pellets during cold weather would normally have even higher feed efficiencies).
Whether your feed is growing in the pasture or comes out of a sack, as the goats get larger each additional pound of gain is more expensive since it takes more feed to produce it. That may not be readily apparent if you raise goats on pasture, but as I demonstrated above, as the slaughter goats get larger they reduce the number of breeding does that you can keep which definitely has a cost.
Even if you could get good prices for larger goats it is doubtful that it would be advantageous to target that market. As with most things moderation is best.
Selling goats that are either too large or too small will generally result in reduced profitability. As I mentioned last month small kids are generally less profitable because even with the premium per lb that the producer receives, the total revenue generated is seldom sufficient to cover the fixed and overhead costs of the operation.
Going to the other extreme, selling really large goats, generates high variable costs and reduces the total quantity of goat meat produced. Profitability of the endeavor is reduced even if the larger goats can be sold for the same price per lb as producers currently receive for smaller goats. In the real world where 80 lb plus goats currently bring significantly less than smaller goats, doing so is nothing short of disastrous.
Now that you've suffered through my boring economics lesson, and digested my food for thought about why you don't want to sell large goats even if you could get a decent price for them, here is what you probably thought you were going to read about when you started this many paragraphs ago. Who, what, when and why people buy goat meat.
The US goat meat consumer generally belongs to certain ethnic and/or religious groups. Because of the cost of the meat many only purchase it for special occasions like holidays and/or for family celebrations like birthdays, anniversaries, weddings, etc.
Islamic celebrations are of great importance to meat goat producers since the increased demand they bring drives prices for goats up significantly. The three most important Islamic celebrations are:
Start of Ramadan - October 26, 2003 and October 15, 2004 but the date can vary by a day depending on the actual sighting of the moon over the United States that year. The type of goat demanded is male or female kids with all their milk teeth (generally less than 12 months old). Males can be whole or castrated and fat kids are discriminated against. Leaving the males intact will help prevent them from becoming too fat, since wethers have a tendency to put on more fat than intact males. Weaned kids from 45 to 120 lbs are accepted with an optimal weight of about 60 lbs.
Eid Al-Fitr (The Festival of the Breaking of the Ramadan Fast) - November 26, 2003 and November 15, 2004. The type of goat demanded is the same as for Ramadan.
Please note that the dates for Ramadan and Eid Al-Fitr are several weeks earlier than they have been the past couple of years, so expect prices to spike earlier in the fall than they have recently.
Eid Al-Adha (The Festival of Sacrifice) - February 12, 2003 and February 1, 2004. The type of goat demanded is preferably yearlings (animals with one set of adult teeth) that are blemish free. Animals with broken horns, open wounds, torn ears, physical unsoundnesses, or that have been castrated, disbudded, or otherwise altered generally do not meet the criteria.
Hindu's also eat goat meat and their holiday Navadurgara or Navratra Dashara or Dassai honoring the Goddess Durga is a holiday when many Hindu's purchase goat meat. It begins on September 26, 2003 and continues to October 5, 2003. Goats are generally slaughtered from the 7th to the 10th day of the holiday after which families meet together and celebrate with curried goat while receiving family blessings. Female goats are not acceptable for this holiday. Relatively tender male goats are generally used. Size of carcass depends on number of people expected to be fed. At other times of the year Hindu's make use of cull does and bucks for curry.
Jewish holidays also increase demand for goat meat. The three primary holidays that concern goat producers are the start of Passover (April 11, 2003) and the start of Hanukkah (December 20, 2003). Goats must be checked by a Rabbi to see that they are free of disease and meet Kosher requirements. Kids between 20 and 50 lbs are acceptable with 35 lbs being optimal for this market.
The Christian holidays of importance to goat producers are Easter (April 20, 2003), Greek or Orthodox Christian Easter (April 27, 2003), and Christmas (December 25, 2003). Most buyers will want fleshy, milk fed kids with relatively light colored meat, 3 months old or younger. Acceptable weights generally range from 20 to 50 lbs with 30 lbs considered optimum by most buyers. Smaller kids are generally unacceptable due to low meat to bone ratios and high carcass drying losses. Kids gaining less than 10 lbs per month or .33 lbs per day after accounting for birth weight are generally not fleshy enough to be considered prime. Kids larger than 40 lbs generally receive slightly less per lb.
Major ethnic groups that consume goat are Hispanics, Chinese, and people from the Caribbean.
In addition to the Christian religious holidays described above Hispanics like to celebrate the 4th of July with barbecued cabrito (milk fed kids) or young (yearling or younger) bucks, does or wethers.
The Chinese primarily consume goat during the colder part of the year, and prefer healthy 60 to 80 pound goats.
People of Caribbean descent consume goat meat, and celebrate several holidays in August. Goats demanded by this market are young, smelly 60 lb bucks or older animals of all sexes. Buyers may prefer to buy the older animals rather than pay the extra price for prime young bucks.
As you can see most of the holidays when goat meat is consumed are during the late fall, winter, and early spring. This corresponds nicely with the times that producers receive the highest prices for their goats. Demand is highest because of the holidays, and supply is lowest because most producers kid during the same time of year and the new kid crop is too small and the previous kid crop is too large.
Kind of explains why we import so much meat from New Zealand and Australia doesn't it? After all, their kidding season is during our summer and fall making their kids the perfect size for many of these holiday markets.
In the meantime, US producers wind up with a bunch of market size goats during the summer when demand is at its lowest, and wind up selling their production for the worst prices.
|This page updated 03/03/03|