Thinking Big Has Its Advantages

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As I mentioned in an earlier column this is my favorite time of the year. I enjoy it so much partly because it is the time that most people increase their herds or start new ones. As a result I get a lot of phone calls and a lot of business.

A common phone call I get goes something like this:

Me: Hello, this is Martin.

Caller: Hello, I'm looking to buy some goats to start a meat goat herd.

Me: Great, how many goats do you need?

Caller: Well my place will support 500, but I think we are going to start with 50...

This has got to be the most common mistake new producers make when they get in the goat business. I did it myself when I got started. The theory is to buy a small herd and then keep all of the does every year until you wind up with the number of does you really need. As with so many things that sound great in theory, the reality is not quite as attractive.

There are many reasons for this. One of the biggest problems is that most of the costs and expenses for a commercial meat goat operation are fixed. The most profitable operations are those that are operating with the maximum number of breeding does their land will support. Thus the fixed costs are spread out over a larger number of animals, and the feed expenses are minimized.

For instance, say you own or are leasing enough land for 500 goats but decide to start with only 50. The cost for the land will be the same, but the cost per animal will be 10 times as much for the smaller herd. In other words, if your lease costs you $1,000.00 per year, the cost per animal for your 50 head herd is $20.00, but the cost for the 500 head herd is only $2.00.

Most, if not all, of the people I work with have to erect new fence or modify the existing fence on their land. The expense to do this will be the same whether you put one goat, 50 goats, or 500 goats on that piece of property. If the cost of the fence work is $10,000.00 then it will cost you $200.00 per goat to fence the place for 50 goats, but only $20.00 per goat to fence it for 500 goats. If you plan on fencing only 10% of it for your 50 goats, the cost per goat would still be $63.25 because it costs about 1/3 the amount to fence an area 1/10 as large, not 1/10 of the cost. Conversely, you can fence 100 acres for only 10 times the cost to fence 1 acre (these numbers assume perfectly square pieces of property). Obviously, from a fencing standpoint larger operations have a significant cost advantage over smaller ones.

Now that you have the land and it is fenced, you need the goats. Unless you are in Texas it is pretty likely you will be shipping your goats a long distance. On average most of the animals we are selling are going around 800 miles. It costs the same amount to ship one goat as it does a full truck load (this assumes you can't combine smaller shipments with another partial shipment headed the same direction). Currently shipping is costing $2.25 per loaded mile for a semi (less if we can get a backhaul rate). Therefore the shipping is averaging $1,800.00 per truckload. If you only put 50 animals on the truck that is $36.00 per head. That is a pretty significant increase in the per head cost of those animals. However, a 500 head shipment would cost only $3.60 per head. That is a little bit easier to swallow, and to recover when you start selling your production. A truckload is usually around 40,000 lbs of goats or 400-500 mature does.

Now that you have the goats at your place there are some more fixed expenses. If you have a full-time ranch manager to keep an eye on things, that cost will be the same whether you have 50 goats or 500. Alternatively, if you will be checking on them yourself daily, it will probably take you about the same amount of time whether there are 50 or 500 goats. This is especially true if you don't live at the same location as the goats. Your drive time will be the same regardless of the size of your herd. The amount of time required will be significantly greater obviously when it comes time to work the goats and during kidding season, but for most of the year I find that it doesn't take me any additional time to check on things whether there are 50 goats or 300 goats (and I have had herds of both sizes over the years).

All bets are off if you have too many goats and need to feed them. Then you will have to invest a significant amount of additional time on a daily basis to manage things.

Finally, the time will come when you want to sell your production. The larger producers (those that can ship at least a truckload of kids) I know are constantly being contacted by buyers wanting to purchase their animals. The buyer will send a truck over and pick them up, all the producer needs to do is help load the animals and make sure payment is received. Smaller producers generally need to transport animals at their own expense to an auction and pay the various fees charged by the sale barn, or advertise the animals locally and spend time with individual buyers to get everything sold. Either way it is more time consuming and expensive for the small producer.

In addition to the fixed costs, there are some other problems with starting out small, and breeding your herd up. Since you will be retaining the does for yourself every year, your income from the operation will be much smaller than it might be otherwise. Normally you could plan on 50 does producing 75-100 kids for you to sell, but if you will be keeping the doelings you will have half as many kids to sell until you have built your herd up.

Not only that, but every year you are building your herd 50% of your does will be first time fresheners that are much more likely to not breed, produce singles instead of twins, and/or to abandon their kids. Instead of a 150-200% kid crop every year you might actually only get 100-150%. Once you have built your herd up your breeders would probably only be 10-20% replacement does producing their first kid crop every year leading to much larger kid crops and fewer problems.

While building your herd you will also probably find it difficult to cull does that should be culled. After all you have plenty of room, and you need every doe you've got. With a full herd and a bunch of really nice doelings you want to keep, it is much easier to get rid of that doe that didn't wean a kid last year, or whose kids are undersized, etc. Failing to cull does like that will hurt your herd for years, especially the does that produce poor quality kids. That doe and her kids should all be culled, but when building a herd it will be tempting to keep them and let them further pollute the gene pool in your herd.

Finally, if you start out too small you may never achieve the size herd you want or it will take a very long time. Beginning with 50 mature does, the next year you should have 100, then 165, then 281, then 476, then 763 (remember the first timers aren't producing at as high a rate as the mature does). That is 5 years to build the herd up to a 500 head herd! That assumes you don't cull any of the does along the way, so now you are faced with several additional years of culling to get to a point where you have 500 head of good, solid, dependable commercial does. Every year you spend building your herd is a year that could have been better spent improving the quality of your herd if you had just purchased a full herd to begin with.

Starting out with less than the number of animals your property will support is one of the biggest and most costly mistakes a producer can make, and will hurt your operation for many years.

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This page updated 10/16/01

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