G. A. BENSON, ARE-NCSU Meat Goat & Sheep Economic$ GEOFF BENSON, PhD Professor Emeritus Dept. of Ag. & Resource Economics N.C. State University

G. A. BENSON, ARE-NCSU 2 Review  Why have goats or sheep? – Your goals  What can they contribute financially & to your lifestyle?  Are goats or sheep a good fit for your operation? – Farm, financial and human resources  Develop a specific farm plan  Implement and monitor the plan This approach can be used for any livestock operation

G. A. BENSON, ARE-NCSU 3 Class Project  Evaluating financial feasibility  Goals and resources – existing and available – help determine the overall type and size of the farm and its enterprises  The size and type of enterprise, specific production practices and productivity drive the economics  Financial feasibility includes profit potential, availability of credit and cash flow issues  An enterprise budget is a tool to assess profit potential

G. A. BENSON, ARE-NCSU Lab ACtivity  If profit is the primary goal  Ask the question “If I get this enterprise up and running, will it make money?  If the answer is yes, then give some thought to the process of getting the enterprise up and running, including financing and cash flow feasibility  If the primary goal is fun (a hobby) then an enterprise budget will show if the financial consequences are acceptable  The lab activity will result in part of an enterprise budget G. A. BENSON, ARE-NCSU4

Lab Activity Materials  Meat Goat enterprise budget template -- download  Data worksheets (Checklist) -- handout  NCSU Forage budget – download  “ANS 408 LAB PROJECT 2010” – handout with instructions on how to proceed and create the budget

G. A. BENSON, ARE-NCSU Lab Activity  Use the NCSU meat goat enterprise budget spreadsheet to “crunch the financial numbers”  Go to http :// econ.ncsu.edu/faculty/benson/benson.html  Under the heading “Meat Goat Economics”  PowerPoint Presentation  Similar to class slides  Checklist for developing a meat goat enterprise (Word© file)  Similar to the worksheets you were given  Enterprise Budget Template for meat goats (Excel© Spreadsheet)  Download this and save a copy  Instructions for using the budget template (Word© file)  I will cover part of this material but if you develop your own budget you should study these instructions G. A. BENSON, ARE-NCSU6

Lab Activity  The lab exercise uses the data in the worksheets provided for h erd size, type and performance data for meat goats  Herd, herd performance and revenue. Assume all kids are sold and replacements and breeding services are purchased, for simplicity.  Feeding program and costs. Assume hay is bought but note there are NCSU hay making budgets.  Pasture, pasture management and costs. The worksheet specifies pasture type. Take the corresponding f orage costs from the forage budget(s) at  Herd health program and costs G. A. BENSON, ARE-NCSU7

Lab Activity  The lab exercise uses the data in the worksheets provided for h erd size, type and performance data for meat goats, continued  Labor use and costs (own and/or hired). I recommend charging for your own labor in the budget.  Investments in livestock, facilities and equipment (Blank -- We will ignore these in the lab)  Other information, if any (Blank)  Note: Fixed costs -- transfers from Table 1 on sheet 2 Equipment operating expense and labor costs transfer from Table 2 on sheet 2 No land cost, farm overhead or income taxes G. A. BENSON, ARE-NCSU8

Your Turn

G. A. BENSON, ARE-NCSU Wrap up  This is a practice session!  The numbers are “reasonable” but there are many other ways to design and operate a meat goat or any other livestock enterprise  For your own operation you would use your own estimates of “normal” or “typical” performance once established, based on data!  If your first effort produces unacceptable financial results do not “fudge” the numbers! Go back to square one and revise your farming plan, using reasonable assumptions, including type, scale, facilities, production practices, marketing, etc. and develop a new budget. G. A. BENSON, ARE-NCSU10

G. A. BENSON, ARE-NCSU Wrapup  Just because it can be done, doesn’t mean you can do it  Just because you can do it doesn’t mean you can make money doing it. Money matters!  You have to figure out the right way to go for you  Good luck!