Goat Budgets A decision tool you can use. Roger Sahs Extension Specialist, Ag Economics Oklahoma State University

Meat Goat Investment Costs No.Units$/Unit% to Herd $/Doe Does50Head$ Bucks2Head$ Vehicle1Pickup$17, Tractor1$25, Baler1$12, Swather1$7, Equipment$1, Native pasture20Acres$1, Barn$25, Total $1,430

Farm and Ranch Realities Annual per acre payments: 30 year loan* Interest rate Land price per acre 6%8%10% $ $ $ $ * Land loan is based on 90% of land price.

Uses of production and financial information  Historical analysis  Monitor current performance  Forward planning

Enterprise Budget  An Enterprise Budget estimates the full economic costs and returns expected to accrue to a production activity – raising goats, producing grain or forage – for one year.

Enterprise Budget  Allows for consistent evaluation of alternative enterprises  What’s included --  Production  Goal, technique, resources required, returns  Costs  Variable and fixed

Why Budget?  1 st step in developing marketing/business plan  Evaluate options before you commit resources  Estimate potential income  Estimate the size of operation needed to earn a specified return  Compare the profitability of two or more systems of production  Identify production and financial risks and whether they may be managed

Budgets can help with “what-ifs” Management changeImpact 5%  in weaning % ? lbs per doe, $? per doe 5%  in feed costs $? per doe 5%  in grazing costs $? per doe 5%  in other costs $? per doe  market price by $5/cwt $? per doe Total$? per doe

Food for thought…..  You don’t know if you are making a profit unless you know your costs of production.  If you can’t pencil in a profit, you aren’t likely to plow (or raise) one!

OSU Enterprise Budget Software  Excel spreadsheet-based software - 24 Crop/livestock commodities  $20 each, 5 for $75, $250 entire set  Free data updates available  Available via CD or online

Other Sources of Budget Information  Books on goat production and industry  Goat producer organizations  Other goat operations  University specialists, educational materials, and meetings  Websites – Langston Univ.  Web-based training and certification 

Ten Commandments for Farmers/Ranchers  Focus on financial management as much as production performance.  Count your goats (and other assets) at least annually.  Keep your lender happy.  Code your checks and sort your expenses for enterprise accounting.  Develop a record-keeping and information system that works for you.

Ten Commandments for Farmers/Ranchers  Don’t just minimize taxes, maximize after tax income.  Don’t expect too much from your does.  Never stop learning.  Go slowly when attempting new things.  Match the livestock and crop enterprises to the land resource.

The Bottom Line -  Make sure your operation is as cost-effective as possible.  Identify production practices that will lower costs.  Find leverage points that will generate the most bang for the buck.  Benchmark the competition.

Questions??