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received to ''break-even'' on the operation? That is, what milk price
allows the producer to cover all cash costs or cash costs plus imputed
costs? With 1981 cash costs of production of $352.01 per doe, the
necessary ''break-even'' milk prices for production levels of 1,500,
2,000, 2,500, and 3,000 lbs per doe are $23.47, $17.60, $14.08, and
$11.73 per cwt, respectively. At these prices per cwt and the
respective levels of production, cash costs of $352.01 per doe would be
paid for by the sale of milk. Some distortion in this analysis might
be expected with higher costs for such inputs as feed and veterinary
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expenses at the higher average levels of production but the analytical
procedure remains the same. Given the same annual levels of production
per doe (1,500, 2,000, 2,500, and 3,000 lbs), the ''breakeven'' prices
per cwt milk, f.o.b. farm, necessary to cover cash plus imputed costs
($547.90) are $36.53, $27.40, $21.92, and $18.26, respectively. Unless
the price received for milk sold is adequate to cover cash plus imputed
costs of production, a producer would receive a better return on his
labor and equity capital in an alternative enterprise.
20 Breeding Stock Enterprise
The analysis above assumes that only replacement doe kids were
raised in 1981 sufficient to allow removal of 30 adult does from the
milking herd's culls. All buck kids and the remaining doe kids were
sold at 3 days of age at $5.00 and $15.00 per head, respectively. As
the genetic potential of a dairy goat herd increases, surplus kids sold
as breeding stock become a significant source of income to supplement
that received from sale of milk. As an example, 50 does and 5 bucks
might be raised to seven months of age and sold as breeding stock at
$200 and $150 per head, respectively, or a total income of $8,500. The
contribution of the breeding stock enterprise is evaluated by
considering the cost of producing the seven-month old kids. In Table 3
is an analysis of cash costs for a breeding stock enterprise in 1981.
Total cash costs to raise 55 kids to 7 months of age in 1981 would
have been $4,878.24. Net income on the sale of 55 kids would have been
$3,621.76. Sale of breeding stock would reduce the breakeven level of
production necessary to cover cash costs from 2,874 lb per doe to 2,637
lb. To cover cash plus imputed costs, the reduction would be from 4,473
lb to 4,236 lb, assuming a milk income of $12.25/cwt f.o.b. farm. It
is important to note that all costs in Table 3 are ''cash'' costs. If
extra investment in land, building, and fencing is required, or
additional ''owner-operator'' labor is needed, imputed costs for the
breeding stock enterprise would need to be evaluated.
21 Other Alternative Sources of Income
Marketing wholesale directly to a milk plant is not the only way to
gain income from the milk produced by a dairy goat herd. Alternatives
include direct marketing of milk in raw or pasteurized form as fluid
or processed products, and growing calves or pigs on high milk diets.
Each marketing method has its distinct advantages and disadvantages
which a producer needs to accurately evaluate before a decision is
made. Direct sale of milk is often an attractive alternative to
wholesaling goat milk to a processing plant, especially in those
states where raw milk sales are allowed. However, there is also beyond
the capital investment required for processing, packaging, and delivery
equipment, the labor and management required for direct marketing
enterprises. Management time must be adequately compensated at its
value in alternative activities or the enterprise is not producing an
adequate return. Many producers who investigate direct marketing of
their herd's milk find that the time necessary to process and
distribute their milk would give a better return if applied to the milk
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COMMERCIAL GOAT MILK PRODUCTION
production enterprise in expanding to more goats or better managing the
herd already owned.
22 A large percentage of the goat milk produced in the US is fed to
wethers, calves and pigs. Calves are usually dairy breed calves
(Holstein most common), bulls and heifers, purchased at or near birth
at auction or on contract from local cow dairymen. These are grown to a
weight of 300 to 400 lb or greater on goat milk and sold as feeder
steers, replacement heifers or heavy veal. Pigs are purchased as feeder
pigs and grown to slaughter weight of 200 to 220 lb on a combination of
goat milk and solid feed. The returns earned from such enterprises are
dependent upon market value of the ''finished'' product, rate of
growth, efficiency of conversion of goat milk to bodyweight gain,
overhead costs (buildings, land, equipment, etc.) and labor and
management requirements. Losses from mortality and morbidity can mean
the difference between profit and loss in calf and swine feeding
activities; veterinary and medicine costs are often the result of poor
management. Calves maintained on high milk diets for long periods of
time (beyond normal weaning) are susceptible to digestive upsets
resulting in marginal bodyweight gains. Where specialty markets for
wethers for goat barbecues, veal calves, or replacement heifers exist,
and where market opportunities for goat milk are limited, using milk to
raise livestock can be an economically viable enterprise.
23 Conclusion
The production costs for 1981 for the Petit Jean Goat Dairy in
Morrilton, Arkansas, are presented to illustrate the procedure to
evaluate the potential for profitability from the production and
marketing of goat milk. Values for various inputs and amounts used to
produce goat milk vary from region to region and between herds within a
region. The budgeting procedure, however, remains the same: an
accurate accounting of all inputs, both cash and imputed, should be
made to determine the cost of producing a unit of goat milk. Whatever
the method of marketing of goat milk, it is important that the
evaluation include return to equity capital and owner-operator labor.
Producing high levels of dairy goat milk from a healthy herd and an
efficient dairy is an economic managerial and promotional challenge.
Without a realistic, continuous economic evaluation, an enjoyable hobby
or part-time goat dairy could become a frustrating and expensive
enterprise.
VIDF 42,43,44,45,46,47
úúúúúúúúúúúúúúúúúúúúThe National Dairy Database (1992)úúúúúúúúúúúúúúúúúúúú
úúúúúúúúúúúúúúúúúúúúúúúúúúúú\NDB\GOAT\TEXT1\B2úúúúúúúúúúúúúúúúúúúúúúúúúúúú
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COMMERCIAL GOAT MILK PRODUCTION
%f TITLE;COMMERCIAL GOAT MILK PRODUCTION
%f COLLECTION;GOAT HANDBOOK
%f ORIGIN;United States
%f DATE_INCLUDED;June 1992
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CULTURED PRODUCTS MADE FROM GOAT MILK
CULTURED PRODUCTS MADE FROM GOAT
MILK
COLLECTION: GOAT HANDBOOK
ORIGIN: United States
DATE INCLUDED: June 1992
Extension Goat Handbook
This material was contributed from collections at the National Agricultural
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