Cost of Production

      One thing about cold weather, it makes me think.  This brutal wind with butt-ass cold temps keeps me inside and I can only stand to watch so much Law & Order.  Winter months means more hay & more feed expenses combined with the need for facilities to keep animals warm and dry.  Throw in a set of babies and hay, feed and facilities are amplified.

      No matter what business a person is in, you need to know the cost of production.  Everybody’s operation is different.  Cost of hay will be higher for others because of trucking.  Cost of feed will differ.  Cost of labor needs to be considered.  Realistically, one should figure cost of fencing, land, interest, etc, but I just use a lump figure for that and call it good.  

      Due to grazing,  I can run a doe from April to October and she will only cost me vaccinations and wormers.  Now, it changes dramatically during winter months and when they are nursing kids.  This year is going to cost me more in hay than normal.  I have 25 acres of a cocktail of wheat, triticale, turnips, Austrian winter peas and deep tillage radishes.  We had good soil moisture to germinate and sprout seed, but since then not a drop.  Throw in several really hard, dry freezes and the turnips and radishes are dead, the peas aren’t doing squat and the wheat & triticale are just sitting there, dormant, waiting on some moisture.  Therefore, every bite the does are getting comes from the round bales of hay that I put out a couple times a week.  Input costs are high.

     If you figure feed and alfalfa while nursing, oat hay during the rest of the winter, $s for vaccinations, wormers, a few meds and $20 per doe for fencing materials, it doesn’t take long to realize that it costs right around $500 per doe per year.  Now throw in another $75 per kid for vaccinations, wormers and feed.  It easily takes $600 per doe to raise one set of kids.  

     Now, you have advertsing and sales expenses.  Clipper blades, equipment, barns, fuel for heaters, syringes, needles, meds, trailers, etc, etc, etc.  Now, the big question–How do you put a dollar value on each kid that ties to the buck?  Obviously, the cost of the buck plays a factor, but sometimes a non-milking doe can devalue a kid.  At times, you don’t realize the value of a buck until you are dealing with his daughters.  Harley cost Fred and I $500 apiece.  We raised some nice kids out of him, but his daughters have been very profitable.  X Factor cost Fred and I $2,500 apiece in 2007.  His kids were very successful in his first kid crop, but we lost him to an early death.  I only have a couple of daughters from him, but they are productive.  Next Step, All Jacked Up, Freak On A Leash, Great Balls of Fire all cost money and made their mark but it is hard to put a value on their impact.  Joe Dirt and Rainman have proven to be excellent investments.  Rumour cost a pile but so far I can justify the expense.  This next year, he has been bred to a pile of does at Fargo and at Cleo Springs.  In late 2014, I will be able to tell you for sure if he has paid himself off.

       According to my pen, sticky notes and calculator, I figure that it takes $750 per doe just to break even in terms of operating costs.  Realistically, it should probably take another $150 per kid to apply towards the buck.  And, ideally an operator should probably figure another $100 towards capitol expenses (barns, trailers, clippers, tractors, blowers, heaters, ear tags, guard dog, heat lamps, etc.) per year.  That brings us to $1,000 per doe per year just to break even.  You better raise a pair of sellable twins per doe per year in order to make this deal profitable.  

    We didn’t talk about the purchase price of each doe.  Or if it was a home-raised doe, the cost of feeding her out or the money she was worth if you would have sold her instead of keeping her.  And what about if you are a member of a show like Champion’s Choice, or putting add-on money at premium sales or donating to shows, etc, etc, etc. 

      And we haven’t even discussed what labor is worth.  And what about AI, semen, flush costs?  The numbers start climbing rapidly.  Of course, your sales should increase if you are flushing and buying semen on quality bucks.

     Here are the numbers that I am playing with at Kelln Livestock.  Mind you, these are not exact numbers, but just the guideline numbers that I use to determine if this deal is worthwhile or not.  A doe needs to sell $1,500 per year to make her worth keeping another year.  My experience shows that most does will average $1750.  A few will average well over that and several will bring in $500 or less per year with 10-15% bringing in ZERO due to no breeds, death loss, no milking, an episode of sore mouth or some other calamity that seems to show up in the goat world.  

     These numbers do NOT apply to everybody.  I would guess that some numbers are similar or higher due to the fact that some spend a lot on feed and hay with little grazing available.   People like Milligan and myself, put more value in having what we feel is the “right” one and spend more than we should considering the size of our operations.  Some breeders’ cost per doe numbers may be lower due to the fact that they have more doe #s and can spread the cost of a buck out.  Just guessing, but I would say that Helms and Pfeiffer can raise a goat cheaper than me, but they sell a LOT of them.  Kind of like wal mart.  Now, Pat Lyons, Big I and Goodno probably raise a goat a lot cheaper than I can.  They are better at keeping initial costs lower than I am.  But, they dabble in good genetics and use those genetics to sell goats.  And it works.  Some breeders, like Tyke, are smarter than I am.  He isn’t afraid of the barter system to provide labor or hay.  Plus, he doesn’t waste time running around the world looking for more goats.  And time is money.  Plus, he is very coachable.  Which means he listens and I am the dumb ass running around spending time and money.  

    How do I decide when the genetic value of a given doe isn’t worth the effort?  In my world, when I’m done, I’m done.  That means she goes to the sale barn, no matter what.  For instance, I recently had a doe that was a genetic giant.  Her first year, she was bred to Freak On A Leash.  She had twin doe kids.  She did a piss poor job raising them, and although they were skinny, you could tell there was value to these kids.  I sold one doe kid to a fellow breeder, who had a hard-on for a Freak On A Leash doe kid, for $500.  I kept the other doe kid.  The next year, said doe was bred to Joe Dirt.  She had triplets.  Once again, she did a piss poor job as a mother.  I sold the 2 wethers for $1000 total.  The doe kid was unhealthy and went to the Perry sale barn.  Those two wethers went to good homes.  One was 2nd in class at Enid district.  The other was reserve grand at Woodward District and made the premium sale at OYE.  What did I do with the doe?  I hauled her ass to the Perry sale barn in 2012.  She was a horrible mother.  Individually, she cost me money.  And when people asked me what the mother of Dietz’s wether had in 2013, I told them that I had hauled her ass to the Perry sale barn.

      Now, here comes the hard part of putting a value on genetics.  The Freak On A Leash daughter that I kept, well, her first kids were sired by Joe Dirt.-a pair of doe kids.  One was 2nd in class at OYE this past spring.  I bought her back.  I kept the other kid.  In 2013, this doe had a single Rainman doe kid that won a class at Tulsa.  She is a very good mother that has raised high quality kids.  I haven’t made money on her (because she has raised keeper doe kids), but her kids have intrinsic value to me.  The first wether or buck kid will be valuable.  How much of the value is due to Freak?  How much is due to the genetics of the doe that has since gone to the sale barn?  I don’t know.  

      For those of you that are like me and like to buy show goats cheap, think about what it cost to raise that inexpensive goat. There is a lot of hours involved in raising goats.  Once you get past 20 does in a herd, it becomes a 2nd job.  150 head and it is probably a full time job.  500 head and you better have family help or labor from south of the border.  It is cheaper to raise commercial cattle than it is to raise show goats.  But it takes a lot more acres to run 50 cows than it does 50 does.  To answer the question “what does it take to raise good goats?”  it is simple–Hours and Dollars.  You better have both, plus fence, facilities, advice and patience.  

     Now, how does a breeder value after the sale help?  A breeder such as Mock sells lots of dollars worth of wethers, but he also provides service after-the-sale trying to get pictures with banners.  What is proven professional help worth?  

     This blog got longer than I was originally planning, but there are a lot of considerations when dealing with raising quality stock.  Looking back, it would be cheaper, easier and less stressful to buy $5,000 wethers for my kids than it would be to raise goats. Now, I have to do this for several years in order to justify facilities, fences, etc.  

      Have a good day.  Stay flexible but not limp.  Look for horseshoes and shamrocks.  I hope you all are as happy as Sasha the corgi is as she lies here at my feet, ears moving- independently of each other, acting asleep and afraid to move because she might get kicked outside.