Agriculture Reference
In-Depth Information
depicts a simplifi ed version of the various transactions that
take place as goat products (such as meat) fl ow through
the market. It shows the route a product takes as it moves
from producers to consumers. Each stage is characterized
by an increase in product price. The number of times a
product changes hands before reaching the end consumer
is one aspect affecting the extent to which prices increase
from the price received by the producer to the price paid
by the end consumer. At each level of exchange, a margin
is placed on the base product price until the product fi nally
reaches the consumer. Therefore, the more steps between
producer and end consumer, the greater the margin above
cost of production the end consumer should expect to pay.
Additionally, the more steps that exist, the less of a margin
the producer is able to place on the product without sig-
nifi cantly affecting the quantity demanded by the end
consumer. Knowledge of the market structure and product
fl ow allows a producer to design a market strategy that
will allow him/her to maximize benefi ts from the produc-
tion activity. The producer is faced with three main chan-
nels to which products may be sold: direct marketing
to the local community on farm or at farmers markets,
auction markets or wholesalers, and processors. There are
also middlemen who sell to wholesalers and processors
and wholesalers who can sell to processors. As a fi nal
step in the value chain, processors sell products to retail
outlets such as local supermarkets, grocery stores, and
restaurants.
On-farm or direct to consumer marketing offers the
greatest profi t margin on live animals or products sold by
the producer because all middlemen and their fees are
eliminated. It can offer a year-round marketing outlet
(Alford et al., 1998). However, sanitation regulations gov-
erning milk and cheese must be considered before pro-
ceeding with this type of strategy.
Livestock auctions are convenient because they offer a
year-round, local outlet for the sale of goats; however, they
generally provide the lowest profi t margin for producers.
Prior to pursuing livestock auctions as outlets, the goat
producer will have to balance the increased costs of trans-
portation with expected revenues from auction sales and
decide the minimum number of animals needed to make
the longer trip profi table.
A very popular outlet used for larger dairies, which is
underutilized for the sale of meat goats, is the establish-
ment of contracts with processors. Contracting offers secu-
rity in terms of pricing and quantity. Unfortunately, the
local supply of goats and their products may not be large
enough, thus forcing processors to seek steady supplies
outside of the local market.
Table 18.5 Meat goat marketing outlets in the
Northeastern U.S. (a sample survey).
Marketing Outlet
Total Sales
% of Total Sales
Marketing
Cooperatives
1
0.3
Meat Wholesalers
9
3.1
Meat Retailers
8
2.7
Livestock
Processors
153
52.4
Livestock Haulers
23
8.0
Livestock Dealers
22
7.5
Livestock
Auctions
40
13.7
Live Animal
Markets
26
8.9
Feeders
8
2.7
Total
290
100
Source: http://www.sheepgoatmarketing.info/
PageLoad.cfm?page=directory/Market_Directory.cfm
(Accessed on March 20, 2009).
The U.S. meat goat industry is an emerging industry
with a highly fragmented market. Sample data shown in
Table 18.5 depict the number of meat goat market outlets
primarily in the 12 northeastern states of the U.S. It shows
the nine different categories involved in meat goat market-
ing. In this sample, livestock processors represented the
largest channel and accounted for 52.4% of all meat goat
purchases. Livestock auctions accounted for 13.7%; live-
stock hauler and dealers, 15.5%; live animal markets, 8%;
and cooperatives, <1%. This sample can also be used to
represent the market structure associated with goat milk
and fi ber outlets in the U.S. The markets for both products
are small and underdeveloped, and are transferred primar-
ily from producers to processors.
Target Customer Groups
A driving force behind the current increased demand for
meat goats is the growing ethnic population in the U.S.
The Hispanic population is expected to swell to 25%
of the U.S. population by 2050, and Muslim and other
faith-based populations such as Buddhists have increased
by more than 150% in number over the past years
(Solaiman, 2007). This population has created a signifi cant
and growing demand for goat meat and other related
products in the U.S. and elsewhere. Aside from use by
ethnic populations, goat products are in demand for
the therapeutic properties associated with goat milk for
Search WWH ::




Custom Search