Article Index "Marketing Channels for Meat Goats" Article Index

MARKETING CHANNELS FOR MEAT GOATS

By Frank Pinkerton and Lynn Harwell
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Introduction
In 1990 the production and marketing of goats and goat meat was widely perceived by southern goat owners and Extension Service personnel to be largely unorganized, unobserved and unrecorded and was, accordingly, thought to be erratic overtime and place as to numbers, price, availability of retail product and consistency of quality. Equitable distribution of marketing margins across producers, middlemen, processors, and purveyors was also thought to be only imprecisely achieved (Pinkerton, Scarfe, and Pinkerton, 1991); (Pinkerton, 1991).

Producers and prospective producers, being virtually without relevant, accurate market information are seriously disadvantaged in basic decision-making concerning production opportunities and marketing options. Such disadvantage contributes to very caution enterprise entry and/or expansion and also to delayed market response by small-scale farmers, part-time agriculturists, and established ranchers alike. Fuller, more equitable participation in this fledging industry could appreciably benefit southern farmers with resources suitable for goat production. This economic development prospect was first recognized by Winrock Foundation (1986) in their benchmark study, "Strategies for Expanding Goat Meat Production, Processing, and Marketing in the Southeastern U.S." It assessed the economic and technical feasibility of production, evaluated potential demand, and modeled processing plant flows. More recent information on goat production, marketing and consumption is found in Pinkerton, et al (1993).

Marketing Channels
-- Overview --

A marketing channel describes the movement of a product or commodity from the site of production to the place of consumption. It may include transportation, handling and storage, ownership transfers, processing, and distribution. Principal flows of meat goats originate in the inland areas, mainly the Southwest, and terminate in the major metropolitan areas in the Northeast and in Florida, Texas and California. Substantial and increasing quantities of goats are now originating from the southeastern and midwestern states.

Numbers of meat goats can be estimated from the U.S. Agricultural Census (total goats less dairy and fiber goats). As shown in Figure 1, about 75% of meat goats and 80% of all goats are found in the southern U.S. (11 states from Texas, Oklahoma to the Atlantic). Production of goat meat, from all sources, is undoubtedly more wide-spread and of greater volume than earlier believed.

-- Market Flows --
Traditionally, principal players in goat marketing channels were entrepreneurs who carved out a portion of the trade through shrewdness, determination, and economic or political leverage. Because the industry is now rapidly developing, market channels are becoming discernible, points of origin are better defined, and new processing plants and marketing techniques designed to better meet consumer needs are increasingly evident.

Figure 2 presents a flow chart of goat and goat meat movement. The chart depicts a relatively complex industry structure involving middlemen who function as traders, brokers and purveyors. The heavily marked lines indicate the major paths that goats take from producer to consumer, but there are regional differences in these pathways (Gudahl, 1987).

The nation's largest Angora and meat goat auction is at Junction, Texas; nearby San Angelo handles mostly meat goats. Other high volume auctions are located at Goldthwaite, Texas, Hackettstown, New Jersey and Lancaster, Pennsylvania with lesser auctions in Tennessee, Georgia, and Alabama. The largest processors are located in Texas, New Jersey, and Connecticut; Privacy Laws preclude publication of more detailed information.

-- Structure and Function --
Many goats move into the marketing channel as "trader" animals, frequently changing hand several times prior to slaughter. The overall marketing system is in place and operating; however, consumers are sometimes forced to accept alternative products or to do without. In a functional sense the system performs well, although in certain urban centers security problems abound and difficulties in collection necessitate informal, but specific arrangements. Most goat meat movement is on a strictly cash basis with only minimal transactions by check or on credit.

Higher quality goats are available in lesser numbers but they do find a significantly better market than the more plentiful lower quality animals. Even for goats of superior quality, producers should attempt to access markets only through established channels and with reputable firms. To do otherwise could lead to frustration and financial loss. Processors and brokers marketing other animals could possibly expand into goat marketing with requisite planning and execution. In any case, there seems little question that the demand for both high and lesser quality goats is such that many more animals could be taken.

Goat Supply
Figure 3 shows the current ranking of southern meat goat producing states. As indicated earlier, the actual numbers are thought by industry players to be considerably higher. There are apparent discrepancies between goat inventories, auction runs and slaughter numbers reported.

Supply, in economic parlance, is more than simply an amount. Rather, it is a schedule of corresponding quantities and prices over a period of time which is designed to reflect the "production personality" of an industry. The concept of economic supply can be used to predict how a change in goat prices, for instance, would cause adjustments over time in the number of goats being produced.

Because the meat goat industry is rapidly developing and because useful price data are as yet largely unreported, any definitive estimate of economic supply would necessarily be poorly documented. Currently, the supply of goats seems to be expanding, mainly in response to an increase in demand and to improved potential for producer profits. Figure 4 provides evidence of this expanding supply in federally inspected slaughter numbers. However, there is also evidence that demand for both slaughter and breeding stock in certain production areas has reduced farm inventories, particularly in Texas.

Supply response is often triggered by changes in farm policy programs. The serial demise of the Wool and Mohair Act, announced in mid-October, 1993, has encouraged some fiber goat producers to shift to meat goats. Moreover, better conditioning of surplus Angora goats prior to sale could lead to increased acceptability in the slaughter trade and thus influence aggregate supply.

The economic concept of "elasticity" also relates to supply and measures the sensitivity between changes in production and price. A product with an elastic supply function would respond more dramatically to changes in price than a supply calculated to be inelastic. We can say that the supply of meat goats seem rather elastic, meaning that sustained improvements in prices offered would result in substantial increases over time in the production of meat goats. However, many producers and prospective producers of goats in this country face resource limitations. These limitations may be mostly financial, but they may also be either knowledge, time, or land area and suitability. In any case, such limitations can delay response time for increasing goat numbers even when favorable prices are encountered. Beyond stating that the supply function for meat goats is shifting upward and appears to be elastic, it is best to concentrate at present on how many and what kind of meat goats there are, and how and where they are being produced.

Types and "Breeds" of Goats for Meat
With the exception of the South African Boer goat imported via New Zealand in early 1993, there are no true meat goat breeds in the U.S. There are, however, three types of goats used for meat: Dairy, Angora, and "Spanish." There is much diversity between and within these types as to production and carcass traits; indeed, it is so great that many goat industry players feel it is a serious impediment to orderly production and marketing.

There is little research to characterize these types of goats for meat production and carcass merit. However, four key traits amenable to genetic improvement in goats used primarily for meat production have been identified (Shelton, 1990). These are: 1) adaptability to environmental and production conditions, b) reproductive rate, c) growth rate and d) carcass value. To date, no single U.S. breed or type possesses an acceptable array of these traits.

Geographic Areas of Goat Production
By informal estimates, Texas is home to approximately 350,000 Spanish goats; perhaps another 150,000 head are found primarily in Tennessee, Georgia, Alabama, Florida, Virginia, the Carolinas and elsewhere under various aliases (brush, woods, briar, hill, scrub). Texas also has about 90% of the 2,000,000 Angora goats with the remainder in New Mexico, Oklahoma, Arizona and Michigan plus smaller quantities elsewhere. The U.S. dairy goat population, totaling about 1,000,000 head, is widely scattered, but the major areas are the west coast, the mid-west, the Northeast, Texas, Pennsylvania, New York and Florida.

Systems of Goat Production
-- Extensive --

The majority of Spanish goats and almost all Angora goats are managed within an extensive system, primarily in arid and semiarid regions, with brush, forbs and grasses being the primary sources of nutrients year round. The seasonal availability of nutrients markedly affects production facets such as rate of gain in kids, body weight changes in adult animals and, of course, reproductive performance. In commercial practice, supplemental feeding of protein and energy is restricted to winter and drought periods.

In the southeastern U.S., many Spanish goats are also raised under extensive conditions. Since the temperatures, rainfall and soil types differ markedly from southwestern goat lands, the available type, quantity, and quality of forage is considerably different. Carrying capacities in these "wet brush" areas may be 2-3 goats/acre initially and thereafter 1-2 for the long growing season as compared to 2-4 acres/goat in the more arid southwest.

-- Intensive --
These goat enterprises are usually smaller (20-100 head) and use fewer but more productive acres. Many features improved pastures, rotational grazing, supplemental forage and concentrates and better medical care than usually found in extensive units. When well managed, does kidding may approach 100% and weaning rates may be 180% with kids considerably heavier than their extensively grown counterparts. The relative profitability of intensive systems is subject to many variables reflecting site-specific operations.

-- Dairy Goats --
Relatively few dairy goats are kept for commercial milk production; the majority are kept for home milk consumption, for showing, for hobbying, and for sale as breeding stock. In all cases, there is a surplus of male kids, non-replacement doelings and cull does and bucks. Currently, most are being sold for slaughter; in the past, however, prevailing meat market prices discouraged deliberate growing of kids for this purpose. Alternative milk usage is the overriding economic concern of producers because kids cannot be economically fed milk that could be sold for fluid and/or cheese use.

Regardless of the production system used for raising meat goats, herd reproductive rate is of paramount importance to gross income and not profit. According to Shelton (1984), most meat goat producers follow a practice of running males with the females on a more or less continuous basis. This is the simplest management practice and may well contribute to maximum production, typically 1.25 to 1.5 kids weaned per doe exposed under extensive conditions. Most meat and dairy goats are seasonally polyestrous with recurring estrual periods from mid-summer through mid-winter. Some matings outside these dates occur. Under Texas range conditions, kids tend to be born in mid-winter and late spring. Dairy goat kids tend to be born February, March and April.

A more controlled breeding/kidding sequence may be useful to: a) exploit special market situations, b) avoid mid-winter kidding, or c) more closely fit seasonal forage supplies. Breeding "out-of-season" has been accomplished both by taking advantage of the well-known buck effect to induce and synchronize estrus and (in dairy goats) by "lighting" both does and bucks to mimic natural photoperiod-induced estrus; where legal, hormones may also be used for this purpose.

To meet Christmas, Easter, and Ramadan demand, producers need to have 25-40 lb kids ready for sale in mid-December and mid-February through late March. Well managed kids can usually reach these weights in 6-16 weeks. The gestation period for goats is about 150 days.

Conclusions
1. The present systems of goat production (and marketing) are rather haphazard with substantive variations in animal availability, body weights and condition at slaughter, as well as variable carcass characteristics (lack of standardized processing techniques and an inadequately developed product distribution system are marketing deficiencies).

2. Currently, goat supply is not in close accord with consumer demand across time; accordingly, there are wide fluctuations in prices paid to producers and paid by consumers which tend to discourage improvements in production and to slow increases in demand.

3. The geographic disparity between areas of goat production and areas of goat processing and consumption adds substantially to marketing costs; more slaughtering in or near present and future production areas could reduce consumer costs and increase demand.

4. The Southeastern area of the U.S. has appreciable, but as yet largely unrecognized, comparative advantages in goat production capability and in proximity to east coast ethnic markets relative to the traditional southwestern area; these advantages, if properly exploited, could alter the industry markedly over time.

References
1. Gudahl, D. J. 1987. Potentials for improved marketing of excess goats -- Part 1. Dairy Goat Journal, December, P. 24.

2. Pinkerton, F., A. D. Scarfe, and B. W. Pinkerton. 1991. Meat goat production and marketing. Fact Sheet No. M-01. E (Kika) de la Garza Institute for Goat Research, Langston University, OK.

3. Pinkerton, F. 1991. Utilization of goat meat and goat meat products. E (Kika) de la Garza Institute for Goat Research, Langston University, OK.

4. Pinkerton, F., L. Harwell, N. Escobar, and W. Drinkwater. 1993. Marketing channels and margins for slaughter goats of southern origin. Southern Rural Development Center, Mississippi State University.

5. Shelton, M. 1984. Meat goat production. IN: Extension Goat Handbook, USDA.

6. Shelton, M. 1990. Selection for meat production in goats. IN: Proceedings. Meat Goat Production Seminar, December, Texas A&M University, San Angelo.

7. Winrock International. 1986. Strategies for expanding goat meat production, processing, and marketing in the southeastern United States. Winrock International, Morriton, AR.

About the author: No information is available.

Agricultural Research Service

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