Considering Goats

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Karissa de Belle and Ian McLean, Bush AgriBusiness Pty Ltd

Low conventional stock numbers, the current price of goats, along with their hardiness and fertility is causing many producers in rangeland areas to give them serious consideration as a potential enterprise. It will be an attractive option for many, however any enterprise choice requires careful consideration.

The first consideration with goats is what sort of enterprise they will be. Will they be a managed flock1, wild harvested or somewhere in between, i.e. wild harvest with smaller ones put behind wire to grow out to killable weight.

If it is simply an opportunistic harvest and immediate sale of wild roaming goats, then it is pretty straightforward, provided you have some basic infrastructure. If they are there, can be mustered, trucked and converted to cash then great. Provided the returns more than cover the time, mustering
costs, trucking costs as well as the additional wear and tear on people, motorbikes and infrastructure.

The wild harvest option is obviously dependent on the availability of goats in the wild, the increase in exclusion fencing in the last decade has reduced the availability of wild roaming goats in many areas. The exclusion fences also provide an opportunity to have a goat enterprise within the fence, either managed or harvested.

If goats are kept behind wire, whether managed or not, then the considerations change as they are then competing with existing enterprises for resources, in the form of feed, labour and capital.

Let’s look at feed first. Given their browse consumption, goats are often perceived as a ‘free’ enterprise in terms of grazing load, but is this really the case? A comprehensive study on the diet composition of herbivores conducted in western Queensland2 found that whilst 58% of goats’ diets is browse, the remaining 42% is grass and forbs, as shown in the below figure.

Figure 1 Diet Composition of Herbivores. Source: Franco & Pahl, 2000

This means that goats are competing with sheep and cattle for a reasonable proportion of their diet, and if grasses and forbs are the main limiting available feed, then they will be competing for them. It also means that locking goats in a paddock to ‘clean up’ the woody weeds could be problematic if not well managed, as they may also ‘clean up’ the grasses and forbs as well, further impacting land condition. They will only eat 100% browse if there is nothing else available.

Labour is also a limiting resource, and a consideration for any potential enterprise is how much labour it will take, and where this labour will come from. Will the goats be more or less labour intensive than the enterprise(s) they are displacing? Will additional labour be required or can it be done with existing labour. The labour implications are often overlooked as people say they don’t pay themselves, so there isn’t a cost. This is flawed thinking for two reasons, firstly there are only so many hours in a day,
meaning time spent on any activity is time you cannot spend on another activity, so is an opportunity cost. Secondly you do come at a cost to the business, our analysis indicates that every full-time labour unit adds between $120,000-$140,000 to the cost structure of a business. Only half of this is a wage cost (imputed or paid), the remainder is the additional costs which increase with labour (admin, motor vehicle expenses, insurance, fuel, R&M etc.). The allocation of labour needs to be taken seriously and
properly costed.

How much additional capital will the goat enterprise require? Will the investment also benefit the main enterprise or other enterprises, or just the goat enterprise? What is the return and payback period for this capital investment and how does this compare to alternative options? Capital available for reinvestment in the business is a precious resource, and needs to be very well targeted.

The relationship between enterprises is an important consideration, the addition of goats to the business will have an impact on the other enterprises on the property. The question needs to be asked as to what relationship the two enterprises will have. Will it be synergistic, complementary or antagonistic? Resource competition will be a major driver in the relationship and should be thought about accordingly.

A further consideration is what their performance will be in a managed enterprise. The endearing quality of the rangeland goat is its inherent fertility. How do you ensure that this fertility will continue in a managed enterprise, if using a rangeland base? If introducing new genetics (e.g. Boer), will the carcass and/or growth benefits more than compensate for any reduction in fertility? Also how do you manage worm burdens in a managed enterprise to ensure that it does not affect productivity.

There is little public information on the performance of goat enterprises, however there is goat benchmarking exercise being undertaken by Holmes Sackett for MLA. The final results of this have not been released, but preliminary data made available by MLA indicates that $22/DSE can be expected on labour and labour related expenses alone. In a goat herd this accounts for 69% of overhead expenses this makes it clear just how important appropriate labour allocation is.

At the end of the day before venturing into any new enterprise careful considerations need to be made, on what the costs and benefits of that enterprise are, and what impact it will have on the business as a whole. Goats will be an attractive enterprise choice for many producers, and worth pursuing wholeheartedly. Doing some homework beforehand will help ensure they benefit both your business and natural resource base.

1 The options of a collective noun for goats is apparently, trip, tribe, drove, flock or herd!
2 FRANCO, B. & PAHL, L. 2000. The Diets of Sheep, Cattle, Goats, Red Kangaroos, Grey Kangaroos and Wallaroos in the South-West Queensland Mulgalands.