MAINTAINING PRODUCER CONTROL
IN THE MEAT-GOAT INDUSTRY

Keeping Profits out of the Hands of Middlemen

Demand for meat-grade goats in the United States already exceeds supply. If every goat in this country was slaughtered today, there would still be a shortage of available product. This country is a net importer of goat meat, because goat producers are not meeting the demand for what we produce.

Why does this situation exist? Well, partly because major goat-producing countries like New Zealand and Australia are way ahead of us in terms of producing a cost-effective product. These two countries can export packaged goat meat to the USA, paying freight and tariffs, and still undercut the price of domestically-produced chevon. In June 1999, a New Zealand producer told the audience at the Georgia Meat Goat Association meeting at which this writer was speaking that NZ goat farmers have an average of $4.50 cost in each animal by the time it reaches market!

Secondly, we Americans are simply way behind them in establishing our own meat-goat industry.

What do we do about this? Before someone hollers "get help from the Government," please think that concept through thoroughly. The person with the gold makes the rules, as the old saying goes, and it never goes better than with "Government" involvement in your business. Government intervention has done a sound job of keeping ranchers and farmers in virtual substance level incomes over this century.

Controlling our own destiny means holding sway over all aspects of the production and sale of our product. Unless you are a high-volume producer of thousands of head of goats per week, there really is only one way to do this. . . . . . band together in organizations like meat-goat co-operatives.

Meat-goat co-operatives, if properly set up and run, can provide group strength in negotiating contracts for a steady supply of product to buyers and put a "floor" on what each seller is willing to accept for his goats. Co-ops can also provide a place for goats to be delivered at specified times for purchase by re-sellers and packing houses. The cost of running the co-op is usually covered by retaining a small amount of money per animal sold.

Don't be swayed by people who try to convince small producers that they can "save the co-op fee" and sell directly to the re-seller or packer. Think about it. Is a packer in Chicago going to send a truck to North Carolina or Texas or Idaho for 50 goats? And send it when the producer wants to move those animals off his property? Of course not. And in the odd event that this does happen once or twice, be assured that this is Bait and Switch marketing . . . . the next time the truck is scheduled to arrive, the producer is going to be told that the buyer can no longer afford to buy at the previously-established price! Divided and Conquered!!!!!

Co-operatives, or whatever the organizations may be called, must be set up and be based upon sound business principles. Animal quality must be established by the co-op's directors and must be strictly enforced by the co-op's manager. Perhaps this will be done through the setting of "grade" standards. Animal quantity also must be set; a steady supply of meat-grade animals must be available in order to fulfill the contracts negotiated with the goat buyers. And the co-op's directors must also establish healthy criteria. Goats with abscesses, pinkeye, soremouth (orf), CAE, Johnes, or other contagious diseases should never be accepted for sale through the co-operative. Members who violate these regulations must be dealt with firmly and swiftly, for their transgressions will cause terrible damage to the overall reputation of all producers who sell their goats through the co-op.

Setting up and running a successful co-op is a big undertaking, fraught with all sorts of pitfalls. The main pitfall usually turns out to be goat producers! It is an axiom among ranchers and farmers that they are hard-headed, fiercely independent individuals, and this is a time that individualism must take second seat the the goals of the group.

The good part is that Americans can supply fresh goat meat to buyers and , as a result of providing a product that importers cannot, likely increase the cost-per-pound paid to the producer for these live animals. The bad part is that meat-grade goat producers often fight among themselves, each trying to outdo the other in money received for their goats. Guess who wins? The buyers of your goats! They love to see this in-fighting. It gives them a huge advantage over all producers.

For those of you reading this who are saying, "well, I'm in the breeding-stock business, so this doesn't affect me," my reply is that we are all in the meat-grade goat business. Producers raising breeding stock are not improving their goats if they aren't selecting out and sending lesser quality animals to slaughter. This is particularly true of fullblood goats of any breed. Boers in particular have become so numerous in the USA that many of the fullbloods must be sent to slaughter if the breed is going to improve. Just because an animal came out of a show winner or because it has a red head and white body does not insure quality. And a show winner is not necessarily a good production animal.In fact, historically in most cases, it is NOT.

Setting up a successful co-operative takes money, but most of all, it takes commitment to the stated goal by its members. It will also require a lot of volunteerism in the beginning. State meat-goat associations can, within their legal structures, set up a non-profit co-operative which returns any profit to its members pro-rata at the end of each fiscal year.

Setting up and running a co-operative is much less complex and less expensive than trying to vertically integrate by establishing "kill" facilities and "breaking" plants that process the meat into cuts. Going this route will involve Government, since meat inspection and other health-related laws weigh heavily on this part of the business. And financing for such a large-scale venture is beyond the ability of most goat ranchers. Some of us may want to vertically integrate our business in the future, controlling production, processing, and sales. But raising goats in and of itself presents a full plate to most of us. . . . particularly to the many small producers out there. Let's learn to walk before we try to run a marathon.

If, after reading this article, you are still skeptical of my recommendations, I suggest that you look at the direction the cattle business has taken in recent years. A few big packing houses control the prices paid for beef because cattle producers have largely not joined together to market their products. Hog raisers, chicken farmers, sheep producers . . . they all have a story to tell of what has happened to them precisely because someone other than they has seized control of their product's marketing.

There are lots of opportunities to sell meat-grade goats of all varieties and ages. Hispanics tend to purchase younger, light-weight animals for cabrito. Jamaicans and other ethnics buy older animals to chop up and curry; they provide an excellent outlet for those animals which producers usually have trouble selling because of age or defects (mastitis, as one example). Japanese consume testicles as an aphrodasiac. Orthodox Jews require that their chevon be processed under the supervision of a Rabbi. Practically every ethnic group has different requirements, providing ample opportunity for American goat producers to find their niche market and fill it.

If co-operatives don't "fit the bill," I defer to each of you for a better solution to our marketing needs.

The author, Suzanne Gasparotto, hereby grants to local goat publications and club newsletters, permission to reprint articles published on the Onion Creek Ranch website under these conditions: THE ARTICLE MUST BE REPRODUCED IN ITS ENTIRETY AND THE AUTHOR'S NAME, ADDRESS, AND CONTACT INFORMATION MUST BE INCLUDED AT THE BEGINNING OF THE REPRINT. We would appreciate notification from any clubs or publications when the articles are used. (A copy of the newsletter or publication would also be a welcome addition to our growing library of goat related information!)

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