

Why it’s Important
Cost of production (CoP) is a key factor affecting the profitability of your meat goat operation. It will provide an indication of the average cost investment required for does or kids produced. Calculating your cost of production will allow you to easily compare your performance from year to year.
Calculating your cost of production will allow you to easily compare your performance from year to year.
Generally, the lower your CoP, the more efficient your operation is and you will have a lower financial risk when meat prices are low.
Lets get started
Making Improvements
Many factors contribute to your cost of production. Labour, feed costs, and animal purchases are often the major components of overall cost of production.
By initially focusing on the biggest expense items, it’s possible to see significant improvement in profitability with incremental improvements in cost control. Costs like transportation of animals is also an area where you may be able to make changes and lower costs.
The point is that there may be a justification for higher than average costs. If there isn’t, that specific expense should be under scrutiny and a strategy put in place to manage it.
Pushing your numbers through this process shows how there are a few different ways to manage and push cost of production down. One way is to increase kg gain per kg of feed. Other opportunities may be in marketing or selling direct to the customer.
For meat goat production there are limited opportunities per year to impact specific expenses, which makes setting a target or goal an extremely valuable exercise. If you have identified one or multiple expenses that need to be reined in, set a realistic goal of 5 or 10%.
Goal Setting
Set a Goal for Reducing Your Cost of Production:
The “golden rule” of farm management: a 5% improvement in productivity, plus a 5% increase from marketing savviness, plus a 5% gain in efficiency (lowered production costs) equals a 117% improvement to the bottom line.2
1https://www.fcc-fac.ca/en/ag-knowledge/ag-economics/to-stay-competitive-use-the-5-per-cent-rule.html
“Anything we can do to make our time more efficient is absolutely crucial for us. This tool provides a baseline for knowing labour requirements. As farmers we really have to put a value on our time.”
– Mark Card, meat goat producer
Cardlea Farms, Ontario
“Consider labour requirements for feeding during the off-pasture season versus while goats are on pasture. You may be able to intentionally plan other projects during the time when goats are on pasture.”
– Mark Card, meat goat producer
Cardlea Farms, Ontario
Additional Resources:
http://www.beefresearch.ca/research-topic.cfm/improving-forage-yields-84
http://www.omafra.gov.on.ca/english/crops/field/forages.html
http://www.omafra.gov.on.ca/english/crops/pub811/p811toc.html
https://ontariogoat.ca/wp-content/uploads/2015/07/2016-GOAT-Annual-Report-FINAL.pdf