Docstoc

How to Start a Meat Market Business

Document Sample
How to Start a Meat Market Business Powered By Docstoc
					 Business Management &
 Marketing of Meat Goats




 James “JJ” Jones
Area Ag Economist
          First Things First
• Must decide what type of goat operation?
  – Market
  – Purebred/Seedstock
  – Purebred/Show Ring
  – Hobby
• Develop a business plan
       The Business Plan

• Mission or vision statement and goals
• Key planning assumptions
• Market analysis and marketing plan
• Operations, organization, and
  management
• Financial plan
           Market Analysis
 Demand (U.S.)
  36.6 million pounds consumed (2001)
  12.6 million pounds imported (2001)
  21.2 million pounds imported (2005)
                        Goat Meat Imports
                                                  + 68.4%
                 22

                 20
million pounds




                 18

                 16

                 14

                 12

                 10
                      2001   2002   2003   2004   2005
            Market Analysis
 Demand (U.S.)
  36.6 million pounds consumed (2001)
  12.6 million pounds imported (2001)
  21.2 million pounds imported (2005)

Supply
  2.86 million head
     2 million breeding
     800,000 kids
 2006 U.S. Meat Goat Numbers
         > 1,000,000           75,000 to 100,000               30,000 to 50,000

        100,000 to 1,000,000   50,000 to 75,000                10,000 to 30,000

                                                               < 10,000




            4
                                         7             6
                                                   2              8
                                     5
                                                           3
                                 1
U.S. Total: 2,260,000                                            9
 Source: NASS
 Southern Region Goat Numbers
Texas (1)             1,080,000
Tennessee (2)           103,000
Georgia (3)              95,000
Oklahoma (5)             74,000
Kentucky (7)             68,000
North Carolina (8)       60,000
Florida (9)              55,000
South Carolina (10)      44,000
Alabama (11)             43,000
Virginia (12)            41,000
Arkansas (14)            29,000
Mississippi (18)         24,000
Louisiana (27)           12,800
Total                 1,728,800


     76.5% of U.S. Total
2005 U.S. Inspected Slaughter
                            U.S. Total: 566,208 head
                           7. Illinois   8. Indiana    3. Pennsylvania 4. New York
                              25,660        22,899          37,041         33,459
                                4.5%          4%             6.6%           5.9%




                                                                     1. New Jersey
                                                                          209,156
                                                                           37%
                                                                       6. DE/MD
                                                                         25,682
                                                                          4.5%
9. California
22,214
3.9%            2. Texas                                          10. Florida
                  38,079                     5. Tennessee
                                                                    15,610
                   6.7%                          29,692
                                                                     2.7%
                                                  5.2%
       The Financial Plan
• Initial financial requirements
• Enterprise analysis
• Historical and projected financial
  statements
• Risk assessment
• Break-even analysis
    Initial Financial Requirements
Initial Needs:
1. Land
2. Fences
3. Breeding Animals
   a. How many does?
   b. How many bucks?
4. Housing for goats
5. Barn
6. Truck & Trailer (or truck box)
                         Fencing Costs
Need to fence 20 acres
Using 48” Netwire,
Wooden corner posts (H-Brace)
T-Post: 10’ spacing
Costs:
Wooden Post
        12 x      8.38   =      100.56
         8 x      3.49   =       27.92
 T-Post
      260 x       2.99   =      777.40
Netwire 300’ Roll
         9 x 212.63      =    1,913.67
Total                        $2,819.55
                    Breeding Animals
Breeding Animals:
50 Does @ $125             =    $6,250.00
2 Bucks @ $400             =      800.00
Total                           $7,050.00


Other Capital Costs:
Fencing                         $2,819.55
Trailer                          1,500.00


Total Initial Investment       $11,369.55
     Initial Investment Costs
• What would the payments be over the next 5 years?

  Percent                 Interest Rate
 Borrowed        6%        7%       8%        9%
   100%         2699      2773     2848      2923
    90%         2429      2496     2563      2630
    75%         2024      2079     2135      2192
    50%         1349      1386     1423      1461
        Enterprise Analysis
• Goat Budget
  – Income
  – Cash Expenses
  – Fixed Expenses
• Risk Analysis
• Breakeven Analysis
          OSU Goat Budget
         agecon.okstate.edu/budgets/
Assumptions:
• 50 Does
• 160% Kidding Percentage
• 10% Death Loss
• Kid selling price = $1.00/lbs
• Supplement during winter & after kidding
• Breeding Season: Nov – Feb
• Kidding Season: Mar – June
                    Meat Goat Budget
                        Per Doe
Income:
Market Kids           93.80
Culls                  7.03
Total Income        $100.83

Cash Costs:                     Fixed Costs:
Supplement            28.91     Depreciation           21.00
Hay                   16.71     Interest               11.22
Mineral                1.80     Taxes & Insurance       2.87
Vet                    2.74     Total Fixed Costs     $35.09
Marketing              5.36
Fuel & Oil             4.23     Returns over Cash &
Operating Capital      2.15     Fixed Costs            $3.84
Total Cash Costs     $61.90
Returns over
Cash Costs           $38.93
             Risk Analysis
Change                  Change in
Kidding %                Returns
   Increase to 170%          + 6.30
   Decrease to 140%      - 12.60
Death Loss
   Decrease to 5%            + 5.52
   Increase to 15%           - 5.68
Feed Costs
   Decrease 10%              + 4.55
   Increase 10%              - 4.66
Price
   Increase 10%              + 9.30
   Decrease 10%              - 9.46
         Breakeven Analysis
Breakeven needed to cover cash costs:
  (Cash Costs – Cull Income) / lbs prod per doe
            54.87 / 93.8 = $0.59/lbs

Breakeven needed to cover all costs:
  (Total Costs – Cull Income) / lbs prod per doe
            $89.96 / 93.8 = $0.96/lbs
            Marketing Plan
   To develop a marketing plan a producer
        must answer the three W’s.
1. What
   Market or replacements
2. Where
   Local, off the farm, production sale
3. When
   At weaning, time of year, etc.
      Goat Marketing Channels
             Local           Regional
Producer
             Market           Market


                                        Processors
            Trader/
           Middleman
                                        Purveyors
           Cooperatives


                    Food                  Retail
                   Service

                                        Consumer
       Seasonal Price Patterns
115%
110%
105%
100%
95%
90%
85%
80%
   Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec

               20-40 lbs.   40-60 lbs.   60-80 lbs.
                   Holiday Demand
     Holiday                   Date      Type of goat
Easter (Western)      April 8, 2007    20 to 50 pounds
                      March 23, 2008
                      April 12, 2009
Easter (Eastern and   April 8, 2007    20 to 50 pounds
Greek)                April 27, 2008
                      April 19, 2009
Independence Day      July 4           20 to 35 pounds

Caribbean holidays    August           60 pound bucks
                   Holiday Demand
      Holiday                 Date            Type of goat
Start of Ramadan       September 13, 2007   45 to 120 pounds less
(Muslim)               September 8, 2008    than 12 months
                       August 22, 2009
Eid al Fitr (Muslim)   October 13, 2007     45 to 120 pounds 60
                       October 2, 2008      pounds optimum
                       September 21, 2009
Eid al Adha (Muslim)   December 20, 2007    Yearlings, blemish free
                       December 8, 2008
                       November 28, 2009
Dassai (Hindu)         October 12, 2007     Male goats only, size
                       September 30, 2008   depends upon number
                                            being fed
   Meat Goat Industry Challenges
• Production diversity and multiple products
• Demand diversity
• Geographic dispersion of production and
  consumption
• Seasonality of supply and demand
• Fragmented and limited market infrastructure
• Lack of market information
               Summary
• Determine the type of goat operation
• Evaluate your business options
• Develop a business plan
• Develop a marketing plan
• Be flexible enough to change when the
  situation changes
• Do not stop trying to learn!
Questions?

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:17
posted:7/16/2010
language:English
pages:27
Description: How to Start a Meat Market Business document sample