Factors Affecting Meat Goat Prices in

San Angelo, Texas

WeslacoAgriLife ResearchandExtensionCenter2415E.Hwy83

Weslaco,TXMay10,2018

Organizedby: RolandoZamora,EA-CEP,WillacyCo.

Presentedby: BillThompson,ExtensionEconomist,SanAngelo,TX

Thisprojectwouldnothavebeenpossiblewithoutthesupportanddataaccessprovidedby:

ProducersLivestockAuctionCompany,SanAngelo,TX

U.S. and Texas Meat and Other Goat Inventory

Source:NASS,USDA

MeatandOtherGoats,2018.1. Texas– 795,000Hd.2. Tennessee- 104,000Hd.3. Oklahoma- 82,000Hd.4. California– 80,000Hd.5. Missouri- 71,500Hd.6. Georgia- 70,000Hd.7. Kentucky- 57,000Hd.8. Alabama&N.Carolina 47,000Hd.10.Florida 45,000Hd.

Top10States- MeatGoatInventory

Source:NASS,USDA

603,500 Hd.

DoesTexasDrivetheGoatMarket?

• TexasisbyfarthelargestgoatproducerintheU.S.

• SanAngeloisthelargestAuctionintheU.S.

• IwillarguethatwhathappensinSanAngeloisareflectionoratleastimpactstheentireU.S.goatmarket.

Texas Goat Inventory and Sales

Source:NASS,USDA

SanAngeloKidGoats,2010– 2016

Year Goats

2010 78,016

2011 81,783

2012 56,392

2013 60,7342014 59,881

2015 58,2032016 67,277

KidGoatswithbodyweightsfrom30to80lbsAfterediting:45,949lots---->462,286goats

40,00045,00050,00055,00060,00065,00070,00075,00080,00085,00090,000

2010 2011 2012 2013 2014 2015 2016

Goats

• KidGoatswithbodyweightsfrom30to80lbs• Afterediting:45,949lots---->462,286goats

SanAngeloKidGoatSales

Percent of Lots and Kids by Weight, San Angelo auction 2010 – 2016

Goats

Wt, lbs Lots Kids

30 – <40 12 12

40 – <50 26 26

50 – <60 29 33

60 – <70 21 21

70 – <80 11100

8100

Table 4. Distribution of kid goat sales by month in San Angelo, TX; 2010-2016

Month Lots % of lots Kids % of kids Kids/lot Weight

1 2,469 5.37 21,536 4.66 8.7 55.0

2 1,879 4.09 18,069 3.91 9.6 54.0

3 3,385 7.37 31,647 6.85 9.3 52.1

4 3,210 6.99 33,809 7.31 10.5 52.6

5 4,500 9.79 49,410 10.69 11.0 53.0

6 5,234 11.39 53,334 11.54 10.2 53.2

7 4,430 9.64 44,151 9.55 10.0 53.7

8 5,328 11.60 50,818 10.99 9.5 53.2

9 4,980 10.84 48,125 10.41 9.7 53.7

10 4,294 9.35 47,678 10.31 11.1 54.1

11 3,227 7.02 33,670 7.28 10.4 54.8

12 3,013 6.56 30,039 6.50 10.0 54.3

All months

45,949 100.0 462,286 100.0 10.1 53.6

1

Table 5. Distribution of kid goat sales by lot size in San Angelo, TX; 2010-2016

Head in Lot Lots Lots, % Kids Kids, %

1 - 2 13,710 29.8 19,725 4.3

3 - 5 12,224 26.6 47,475 10.3

6 - 12 10,745 23.4 88,745 19.2

13 - 34 6,532 14.2 131,305 28.4

35 + 2,738 6.0 175,036 37.9

Total 45,949 100.0 395,009 100.0

1

FixedEffects• Year:2010– 2016• Month:JanuarythroughDecember• WeightClass:10lb perclass,30-80lbs• LotSize:1-2,3-5,6-12,13-34,35+

RandomEffect• Week

StatisticalModel

SanAngeloKidGoatPricesbyYear;2010-2016

• 2010– Priceswere$20.13±3.38lowerthan2011

• 2011-2013– Nostatisticaldifferencesintheseyears

• 2014– Priceswere$41.65±2.82greaterthantheaverageof2011-2013.

• 2015– Priceswere$37.76±3.42greaterthan2014.

ImpactofYearonKidGoatPrices

MonthlyWeightedAverage,Selection1Kids,SanAngelo,TX;2010-2017

SanAngeloKidGoatPricesbyMonth;2010-2016

SanAngeloKidGoatPricesandMarketings byMonth;2010-2016

• KidGoatsdisplayedtraditionalseasonalpricemovements– seasonalreproduction– ProducersavoidkiddinginJune-September

• Lowmilkproductionandlowkidgrowthrates• Hightemperaturesanddecreasingpasturequality

– HighestpricesreceivedinDecemberthroughMarch– HighestnumberofKidssoldinMaythroughOctober– LowestPricesreceivedforkidsinMaythroughOctober

ImpactofMonthonKidGoatPrices

SanAngeloKidGoatPricesbyWeightClass;2010-2016.

• Pricesgenerallyincreasedtothe50to60poundweightclass– Thenpriceperhundredweightdecreasedatsuccessivelyhigherweights

– Marketpreferenceforsmallergoatcarcasses

ImpactofWeightonKidGoatPrices

• “Non-Traditional”marketchannel– Typicallydoesnotsendanimalstoafeedlot– Doesnothavelarge,centralizedslaughterfacilities,– Dependentonalargenumbersof:

• Meatmarkets• Smallprocessors• Otherresellerslocatednearpopulationcentersandethniccommunities

– DoesnotreceivethesameformalmarketreportingbyUSDA

• Non-TraditionalMarketstypicallydemandwholecarcassesorportionsofcarcassesratherthanindividualcuts.

ImpactofWeightonKidGoatPrices

SanAngeloKidGoatPricesbyLotSize;2010-2016.

• Ingeneral,Kidsseeincreasedpricesaslotsizeincreases.– Pricedifferencebetween1-2kidsand3-5kidsisstatisticallysignificant

– Pricedifferencebetween3-5kidsand6-12kidsisstatisticallysignificant

– Pricedifferencebetween6-12and13-34kidsisnot statisticallysignificant

ImpactofLotsizeonKidGoatPrices.

– Thisislikelyduetotheheterogeneousnatureofthenon-traditionalmarket.

• BuyersareinSanAngelotobuyavarietyofgoats.Thismaymeankidsof;

– Differentages– Differentweights– Specificgender– male,wether orfemale– Othercriteria

• AnygivenloadofgoatsleavingSanAngeloislikelytohavegoatsdestinedtoseveralbuyersormarkets.

– Thismayhavetheeffectofdiscouragingbuyersfrombiddingonlargerlots

ImpactofLotsizeonKidGoatPrices.

• Meatgoatkidproducers:– Approximately50lb kidbringsbestpriceperhundredweight

• Youwillneedtoevaluateputtingadditionalweightonthem

– Seasonalityhasalargeimpactonnetpricereceived• Stillanalyzingdataforimpactofethnicholidays

– Maynotbeasmuchincentivetoworryaboutlotsizeabove12headperlot.

Conclusions

Questions

MeatGoats

• Quicklybecomingtheruminantof2nd choiceinTexas.– Goatsbeingreplacedbyhairsheepinnumerousplaces

– Butpriceperformancesuggeststhatthisstatusshouldwereviewed

SmallAcreageImplies:

• Limitedgrazingresources– Oneortwocowsisnotpractical.

• LimitedLabor– Assumingatown/fulltimejob– Needtoworkanimals

• Drenching–• Shearing(Angora)• Workingkids– Soremouth/Overeating(Moreonthis)

– LikelyleaveBucksinyearround(Morelater)– Overall,likelyalittlemorelaborintensivethanhairsheep

Total Hd Avg Wgt Price ($/Cwt.) Total Hd Avg Wgt Price ($/Cwt.)2010 43,834 57 164.02$ 28,362 104 65.20$ 2011 38,510 53 188.18$ 51,236 97 63.07$ 2012 35,179 58 186.75$ 16,122 113 91.30$ 2013 27,814 58 194.86$ 15,049 109 85.41$ 2014 37,479 57 227.79$ 18,255 110 107.75$ 2015 25,041 54 267.67$ 13,607 109 131.44$ 2016 26,526 57 252.12$ 12,632 106 124.45$ 2017 83,905 55 240.17$ 15,295 106 121.26$ 2016 I 6,456 58 266.47$ 2,267 105 144.49$ 2016 II 5,435 55 284.80$ 2,877 109 136.70$ 2016 III 5,183 59 228.36$ 4,676 106 120.20$ 2016 IV 9,452 57 237.41$ 2,812 105 102.54$ 2017 I 16,551 53 266.05$ 3,262 99 129.45$ 2017 II 21,885 53 254.02$ 3,686 107 127.20$ 2017 III 24,091 56 215.06$ 5,086 108 119.38$ 2017 IV 21,378 56 235.96$ 3,261 109 110.17$ 2018 I 13,768 56 263.64$ 2,029 107 123.55$ 2018 II 6,439 50 266.55$ 1,211 107 127.88$ 2018 III - - - - - -2018 IV - - - - - -

5/2/2018

Table 1. Weighted Average Kid and Nanny Prices at San Angelo, TX Auction.

Table Updated:

San Angelo Kids* Nannies 1-2s

* Prior to 2017 only Selection 1 Kids were reported, Starting in 2017 all kids are reported

Ann

ual D

ata

Qua

rter

ly D

ata

125%KidCrop

Projections for Planning Purposes Only -- Not to be Used without Updating2018 Estimated Costs and Returns per Breeding Female

Small Acreage Meat Goats

West Central Extension District - 7

Breeding Females 12 KidQuantity Enterprise

REVENUE Head Per Head Units $/Unit Total TotalMeat Goat Kid - Buck 0.667 0.55 CWT $245.00 $89.83 $1,078.00 Meat Goat Kid - Doe 0.417 0.55 CWT $245.00 $56.15 $673.75 Cull Does 0.167 1.15 CWT $122.00 $23.38 $280.60 Cull Billy 0.042 2.00 CWT $135.00 $11.25 $135.00 PRF Income 1.000 3.33 Acre $1.96 $6.53 $78.32

Total Revenue 59.5833333 $187.14 $2,245.67

VariableCostAnalysisVARIABLE COSTS Quantity Units $/Unit Total TotalProduction Costs

MiscellaneousSupplies 0.66666667 Head $3.00 $2.00 $24.00PRF Rainfall Ins 3.33333333 Acre $1.11 $3.70 $44.40

Marketing Expense 1.00 Head $5.10 $5.10 $61.23Feed

Range Cubes 20% 0.4875 CWT $16.10 $7.85 $94.19Corn - Sheep and Goat 24.375 Pound $0.07 $1.74 $20.88Salt - Sheep 2.70833333 Pound $0.11 $0.30 $3.58Mineral - Sheep 1.08333333 Pound $0.59 $0.64 $7.67

Vet. MedicineSoremouth 1.25 Dose $0.32 $0.40 $4.80S&G Deworm 1st 6.20833333 ml $0.12 $0.78 $9.31S&G Deworm 2nd 0.99333333 Grams $0.44 $0.44 $5.27

Fuel 1.0 Head $3.96 $3.96 $47.48Lube (As a % of fuel) 10.0% Percent $3.96 $0.40 $4.75Repairs 1 Head $32.58 $32.58 $390.93Uti l i ties 1.00 Head $6.00 $6.00 $72.00Interest on Credit Line 5.25% $3.27 $39.19

Total Variable Costs $69.14 $829.66

Planned Returns Above Variable Costs: $118.00 $1,416.01Average Kid Breakeven Price to Cover Variable Costs $46.96 CWT

FIXED COSTS Quantity Units $/Unit Total TotalDepreciation - Equipment 1 Head $130.93 $130.93 $1,571.19Depreciation - Livestock 1 Head $5.56 $5.56 $66.67Pasture Cost 3.33333333 Acres $8.00 $26.67 $320.00

Total Fixed Costs $163.16 $1,957.86Total Costs $232.29 $2,787.52Planned Returns to Management, Risk, and Profit: ($45.15) ($541.85)

Average Kid Breakeven Price to Cover Total Costs $320.78 CWT

FixedCostAnalysis

% Used for Useful EstimatedCost Goats Life Depr$8,000 5% 5 $70

$40,000 30% 5 $1,500

$0 100% 7 $0

$100,000 45% 20 $0

$75,000 45% 20 $0

$200 100% 3 $67

1 $0

100% 1 $0

Total $1,637

Estimated Nannies per Year 12 $136

2IncludesPens,Corrals,Workingchutes,Etc.

4 whlr $1,000 $7,000

Fixed Cost AnalysisSalvage

ValueDepreciable

Item Basis

Pickups $15,000 $25,000

Electric Fence & Chargers $0 $0

Barns/out bldgs $35,000 $0

Working Facilities2 $15,000 $0

Operator Labor $0

2017 Buck $0 $200

Projections for Planning Purposes Only -- Not to be Used without Updating2018 Estimated Costs and Returns per Breeding Female

Small Acreage Meat Goats

West Central Extension District - 7

Example Weaning Percent

Example Gross Sales per Breeding Female

Pounds Produced

per AU145% $210.50 97135% $198.82 92125% $187.14 87115% $175.46 82105% $163.78 78

Example Breakeven Kid Pay Weight to Cover Total Cost

Example Average Breakeven Price to Cover Total Cost

Sensitivity Analysis for Example

61 $276.5466 $297.0272 $320.7879 $348.6888 $381.89

Questions

https://sanangelo.tamu.edu/extension/west-central-agricultural-economics/small-ruminant-mpa-project/

• Sanangelo.tamu.edu• Click“Extension”tab• Click“AgriculturalEconomics”

• Click“SmallRuminantMarketPriceAnalysisProject”

Small Ruminant Market Price Analysis Project

Small Ruminant Market Price Analysis Project

ContactMe

William(Bill)ThompsonAssistantProfessorandExtensionEconomistTexasA&MAgriLifeExtensionService7887USHWY87NorthSanAngelo, TX76901Phone:325-657-7306Email:w-thompson@tamu.edu http://sanangelo.tamu.edu/extension/west-central-agricultural-economics/

@westtxagecon