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Goat Marketing Chapter One GOAT MARKETING Amanda Ziehl, Megan L. Bruch, Aaron C. Robinson and Rob W. Holland, Jr. _______________________________________________________________________ Introduction Oftentimes, producers raise their goats and think about marketing when the goats are ready to sell. Farmers may take their goats to the local auction barn, call someone who may be interested in purchasing meat goats or advertise in the newspaper that they have meat goats for sale. In these situations, the producer is merely selling his goats or goat meat and acting as a price-taker. Selling may be described as the transaction where the goat or goat meat is transferred from the producer to the consumer for a price. While this transaction is important, selling is only one component of a complete marketing scheme. In contrast, marketing is a proactive approach to producing and selling meat goats, allowing the producer to behave more like a price-maker. Marketing is the process of planning and executing the idea of a product, its price and the promotion and distribution of that product to satisfy the needs of the customer (Community Futures Development Corporation, 2005). Marketing of meat goats encompasses all of the operations and decisions made by the producer, which should be based on the needs and expectations of the end customer, from the breeding program and production methods to selling the live animal or meat to the consumer. This means marketing should not be an afterthought of production but should be planned well before production takes place and considered throughout the activities of the supply chain. This chapter will discuss fundamental meat goat marketing concepts including: • The history of meat goat marketing in Tennessee • Supply and demand of meat goats and goat meat • Marketing mix considerations (product, price, place and promotion) • Regulatory considerations for direct marketing of goat meat and on-farm harvest History of Meat Goat Marketing in Tennessee Meat goats and goat meat marketing are a relatively new industry in Tennessee as it is in most of the United States with, perhaps, the exception of Texas. The organized marketing of goats began in Tennessee during the early 1990s when the University of Tennessee Extension encouraged producers in Bedford County to pool their goats together to create a larger sale base to meet buyers’ demands (Ailshie, 2005). Shortly thereafter, in the mid- 1990s, the Tennessee Livestock Producers[1] became involved with goat marketing [1] The Tennessee Livestock Producers is a livestock marketing cooperative and service company of the Tennessee Farm Bureau Federation. 1 through goat auctions, which were held in conjunction with sheep auctions. Prior to organized marketing encouraged by Extension and the collective sheep and goat auctions, producers typically sold their goats at local sale barns or directly off the farm to consumers and other producers. Soon after the United States Department of Agriculture, Agricultural Marketing Service (USDA-AMS) adopted grading standards for live goats and institutional meat purchase specifications for fresh goat meat in October 2001[2], some goat auctions in Tennessee began to implement the live animal grading standards by hosting graded goat sales. Tennessee hosted its first graded goat sale in August 2002 at Thompson Station. As of September 2005, there are two graded goat sales in Tennessee with one at Thompson Station and the other in Somerville. Both graded goat sales are organized and run by the Tennessee Livestock Producers. The auction at Thompson Station has graded goat sales every second and fourth Friday of each month and typically sells a higher volume of goats than the auction in Somerville. The Somerville auction sells goats at noon every Tuesday.[3] Both graded goats sales are still held in conjunction with the sale of sheep. Even with the graded goat sales, it is estimated that many goats are marketed directly off the farm. Producers often sell their goats through a production sale, private treaty or individual sale directly to the consumer. As of September 2005, however, limited data is available on the number of head sold directly off the farm throughout the state. Supply and Demand of Meat Goats and Goat Meat Markets for every product and service, including goats and goat meat, are a function of supply and demand. The U.S. supply of goat meat is made up of domestic production and imports less exports. Because of the relationship between supply and demand, these measures of supply are also indirect measures of demand. Domestic production can be explored through the evaluation of live animal inventory and federally-inspected slaughter data. Trade data can be used to evaluate the amount of chilled and frozen goat meat imported to and exported from the U.S. Geographic Areas of Meat Goat Inventory The USDA National Agricultural Statistics Service estimated the U.S. inventory of meat and other goats as of January 1, 2005 to be more than 1.9 million head, an increase of only 1 percent from the 2002 Census of Agriculture (Table 1). Texas led the nation in numbers with over 1 million head in 2005, a 7 percent increase from 2002. Tennessee ranked a distant second with 98,000 head in 2005, a 9 percent decline from the 2002 Census. [2] The USDA-AMS specifications are discussed in more detail later in the chapter. [3] Sale information listed as of September 2005. Dates, time and locations are subject to change. 2 Several other southern states also ranked high in the inventory. Georgia, Kentucky, North Carolina, South Carolina and Alabama were all in the top ten for meat and other goat inventory as of January 1, 2005. Florida, Missouri and Virginia joined in the top fifteen. Table 1. Meat and Other Goat Inventory: Number by State and United States December 31, 2002, January 1, 2005 and Percent Change Percent Change State 2002 (1) 2005 (2002-2005) AL 47,270 37,800 -20% AZ 4,272 4,000 -6% AR 26,578 27,000 2% CA 61,241 50,000 -18% CO 11,976 16,000 34% FL 36,020 36,000 0% GA 66,018 77,000 17% ID 6,683 5,200 -22% IL 12,142 11,000 -9% IN 20,045 15,800 -21% IA 9,666 13,000 34% KS 19,797 27,000 36% KY 61,618 63,500 3% LA 13,641 12,500 -8% MI 10,785 8,500 -21% MN 11,084 8,000 -28% MS 24,788 14,100 -43% MO 37,515 34,800 -7% NE 8,204 13,000 58% N ENG (2) 9,783 10,000 2% NM 10,095 7,300 -28% NY 19,539 18,100 -7% NC 58,993 52,200 -12% OH 28,439 34,000 20% OK 73,302 65,000 -11% OR 19,222 21,700 13% PA 26,257 22,000 -16% SC 37,985 41,000 8% TN 107,211 98,000 -9% TX 941,783 1,010,000 7% VA 35,710 34,400 -4% WA 14,265 14,000 -2% WV 14,326 11,700 -18% WI 8,634 6,400 -26% Other States (3) 44,037 45,000 2% U.S. 1,938,924 1,965,000 1% (1) 2002 Census of Agriculture. (2) N ENG includes CT, ME, MA, NH, RI, and VT. (3) Other States include AK, DE, HI, MD, MT, NJ, NV, ND, SD, UT, and WY. Source: USDA National Agricultural Statistics Service. Sheep and Goats. January 28, 2005. 3 According to a USDA Animal and Plant Health Inspection Service (APHIS) (2005) report, many industry experts believe the 2002 Census of Agriculture numbers underestimated the goat population by as much as 35 to 45 percent in the nation. If this is indeed the case, inventory numbers would have been between 2.6 million and 2.7 million head of meat and other goats in the U.S. in 2002. Federally-Inspected Slaughter Domestic production of goat meat can be evaluated through USDA National Agricultural Statistics Service (NASS) slaughter and inventory data. The NASS began collecting data on goats slaughtered at federally-inspected plants in 1977, when approximately 35,000 goats were slaughtered under this inspection system (Gipson). By 1997, over 390,000 goats were slaughtered in the U.S. annually (Figure 1), an increase of greater than 1,000 percent from 1977. In 2004, more than 615,000 goats were slaughtered in the nation, another 57 percent increase from 1997 in federally-inspected slaughter numbers. Figure 1. Goats Slaughtered in United States: Federally Inspected Source: USDA National Agricultural Statistics Service. Livestock Summary Annual Report. At the state level, a few states dominate federally-inspected slaughter. For fiscal year 2004, New Jersey reported almost 35 percent of total federally-inspected goat slaughter with 231,171 head as total federally-inspected slaughter numbers totaled 666,203 for fiscal year 2004. Texas accounted for an additional 18 percent with 119,280 head. Pennsylvania and New York followed with 9 and 5 percent respectively. Tennessee rounded out the top five with 33,073 goats slaughtered in federally-inspected plants during fiscal year 2004. In addition, California, Illinois, Maryland and Indiana all had over 20,000 head slaughtered under federal inspection (USDA-APHIS, 2005). 4 It must be noted, however, that not all goats slaughtered in the U.S. are done so under the federal inspection system. Goats are also slaughtered, for example, under state-inspection programs and on-farm slaughter. Non-federally inspected slaughter numbers may be significant. Some experts estimate that federal-inspection slaughter is 50 to 60 percent of total slaughter numbers (USDA-APHIS, 2005). The federal-inspection data, however, illustrate the increasing trend in the number of goats slaughtered in the U.S., signifying an increasing demand for goat meat.
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