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

3. Meat Goat Investment Costs No.Units$/Unit% to Herd $/Doe Does50Head$125100125 Bucks2Head$30010012 Vehicle1Pickup$17,5002588 Tractor1$25,00025125 Baler1$12,50050125 Swather1$7,5005075 Equipment$1,50010030 Native pasture20Acres$1,500100600 Barn$25,00050250 Total $1,430

4. Farm and Ranch Realities Annual per acre payments: 30 year loan* Interest rate Land price per acre 6%8%10% $ 500364453 $ 10007289106 $ 1500109133159 $ 2000145177212 * Land loan is based on 90% of land price.

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

6. 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.

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

8. 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

9. 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

10. 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!

11. 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 http://www.agecon.okstate.edu/budgets

12. 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  http://www2.luresext.edu/goats/training/qa.html

13. 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.

14. 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.

15. 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.

16. Questions??