What do Nubian, Oberhasli, Kalahari, Alpine, and Fainting all have in common? They are all goat breeds. Actually, they are some of the most common dairy or meat goats farmed in the U.S.
Goat products like meat and dairy are growing in popularity due to increased demand from ethnic populations and the health-conscious community. Not only is it a profitable business, but it’s also an enjoyable way to connect with nature and live a sustainable lifestyle.
Starting a goat farm involves more than just raising goats, and it’s important to do your research and planning before diving in. In this guide, we’ll provide an overview of the goat farming business, steps to get started, and answers to common questions.
A goat farm is an agricultural business that involves the raising and breeding of goats for profit. Goat farming is generally defined as rearing goats for either milk or meat as well as skin and fiber production. In fact, different goat breeds will produce either dairy, meat, or fiber (wool, angora, and mohair). They rarely cross over. Some farmers also choose to focus their business on breeding goats.
Compared to other hoofed and domesticated creatures, goats are low maintenance. They eat just about every grass and weed and don’t need a lot of space to roam and be happy. The size of a farm can range from a small backyard operation to a large commercial farm. A goat farm requires at least two goats, and if you’re planning for commercial goat farming, you’ll need 1 male goat (buck) for every 20 female goats (does). Even with a limited amount of land, it is possible to run a successful goat farming operation.
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The goat industry is expanding rapidly in the U.S., driven by growing ethnic populations that consume goat meat and milk products. Goat farms are most prevalent in Oklahoma, Texas, Arizona, Wisconsin, California, and Tennessee, however, there has been an expansion of goat farming in the Southwest due to the government supporting farmers to switch from tobacco to goat farming.
The production of goat milk and meat is on the rise in the US. This is mostly due to government subsidies for this industry and ethnic changes in population and, thus, an increased demand for goat products.
Goat milk and milk products are also increasingly popular due to their nutritional and biochemical properties. Goat milk offers a great dairy alternative for people with gastrointestinal disorders and people with cow milk allergies and is cholesterol-free.
In addition to these domestic trends, the industry is working with regulators to enable the expansion of its exports into foreign markets such as the European Union, Japan, and Taiwan.
Steps To Start A Goat Farm Business
Step 1: Determine the Purpose of the Farm
Starting a goat farm involves deciding the purpose of your farm and what products you want to sell. Researching and understanding your target market before starting your farm helps position your business for success. Here are some ways to help you determine the purpose of your farm and decide what to sell:
Evaluate your interests and goals: Consider what aspects of goat farming you are passionate about and what goals you want to achieve. Are you interested in dairy products, meat production, or fiber? Understanding your own interests and goals will help guide your decision-making process.
Conduct market research: Study the local and regional markets to identify demand and potential customers for different goat products. See what products like meat cuts, cheeses, yogurts, soaps, etc. from existing farms fetch the highest prices. Also, be on the lookout for gaps or opportunities in the market that align with your interests and resources.
Identify customer preferences: Talk to potential customers, such as local restaurants or butchers, to ask what items they struggle to find or farmers’ markets to observe what products shoppers are looking for. This will help you tailor your products to meet customer demands and increase the likelihood of success.
Consider competition: Analyze existing goat farms and their products in your area. Identify what they are selling and evaluate whether there is room for differentiation or if you can offer unique products that meet specific customer needs.
Plan your resources: Assess the resources available to you, such as land, finances, and equipment. Evaluate how these resources align with your chosen purpose and product offerings. For example, if you have limited land, focusing on specialty cheese production may be a better choice than large-scale meat production.
Step 2: Write a Business Plan
Starting a goat farm can be exciting, but it’s important to remember that it’s also a business. Like any other business, it requires careful planning and preparation. And when it comes to planning, the best tool is a business plan.
A business plan requires you to think through important operational details, such as facilities, livestock management, supplies, labor, and marketing strategies. By strategically planning these aspects, you can work through the process of running a smooth operation on paper.
Writing a business plan is also important because you will create projections for expenses and revenues to determine the profitability of your goat farm. This financial analysis helps you make informed decisions about pricing, investment, and resource allocation. Also, when seeking financing, lenders will pay close attention to this section.
Related: How to write a business plan
Step 3: Source Funding
Once you’ve determined there’s a market for your business and completed your business plan; the next challenge is accessing the capital needed to bring your vision to life. Here’s a look at the common funding sources for goat farms.
When seeking funding for a goat farm, the first source to assess is using personal savings, investments, or assets to finance the venture. If personal savings aren’t enough to cover the startup costs, outside funding sources will be needed. Some of the most common outside funding sources include lenders, friends, family, and microloans.
Lenders, such as banks, typically require the borrower to invest at least 15% of their personal funds towards the total cost of the project, have a good credit score, and have sufficient collateral. If the loan is deemed too risky for the lender, they may use an SBA (Small Business Administration) or USDA (United States Department of Agriculture) loan guarantee, which reduces the lender’s risk by guaranteeing a portion of the loan.
Friends and family members can also provide funding for a goat farm. It’s important to have a written agreement between all parties regarding the terms of the loan, such as the repayment schedule and interest rate. This provides clarity and can avoid potential conflicts in the future.
Microloans are another option for funding a goat farm. These loans are often provided by economic development organizations and Community Development Financial Institutions (CDFIs) and are a source for lower funding needs or situations where credit isn’t available through a traditional lender. Some microloan programs provide business training in addition to funding, which could be particularly helpful for someone starting a goat farm.
Step 4: Register the Business
If you’re planning to start your own goat farm, there are several steps you should take to properly register your business and make it legal. Each state has different regulations and requirements, so it’s important to research the specific rules in your area.
Business structure: You’ll first choose a structure when registering your business. This decision impacts your taxes, liability, and paperwork requirements. Here are the four common structures:
- Sole proprietorship: This is the simplest form of business where one individual owns and runs the farm. It’s easy to set up with minimal costs and less formal paperwork. However, there is no distinction between personal and business assets, which means you’re personally responsible for all debts and liabilities.
- General partnership: Similar to a sole proprietorship, but with two or more people. Partnerships are easy to form, with profits and losses flowing through to the individual partners’ tax returns. Like sole proprietorships, partners are personally liable for business obligations.
- Corporation: A more complex structure, a corporation is an independent legal entity separate from its owners. This provides the strongest protection against personal liability, but it is costlier and more complex to set up and requires ongoing compliance with corporate formalities.
- Limited Liability Company (LLC): Combining the simplicity of a sole proprietorship with the liability protection of a corporation, an LLC is often ideal for small farms. It offers flexibility in taxation and protects personal assets from farm liabilities.
Related: Comparison of business structures
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
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Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.
During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.
Zoning regulations: Before acquiring property, check with your local zoning office to ensure that such a business is allowed in your desired location. You may need to obtain a special permit or license before beginning operations.
Obtain permits and licenses: Research and apply for any permits or licenses required for goat farming, such as animal care permits, food handling permits (if processing goat products), or agricultural licenses. Contact your local Department of Agriculture or relevant regulatory agency to ensure compliance with the regulations in your area.
Also, there will likely be a variety of general business registrations, such as a business license, seller’s permit, and Employer Identification Number (EIN).
Comply with state safety regulations: If you plan to sell dairy products or meat from your goat farm, you must comply with state milk or meat safety regulations. This may require additional certifications or inspections, so it’s important to do your research.
Check for retail permits: If you plan to run an on-farm retail store, check to see if it needs inspection or additional permits from your local health department.
Step 5: Acquire & Set Up the Farm
After the planning and preparation phases, it’s time to roll up your sleeves and set the stage for your goat farming operations.
The first step in setting up operations is choosing the right location. The ideal location for a goat farm should have enough space for the goats to graze, shelter, and for storing feed and equipment. It should also have easy access to water, be well-drained to prevent diseases, and ideally be situated away from residential areas to avoid possible noise complaints.
Next, you’ll need to procure the necessary equipment and supplies. This could include fencing to secure the grazing area, housing for the goats, feeding and watering equipment, and tools for handling and grooming the animals. You’ll also need a reliable supply of goat feed, which could include pasture grass, hay, grains, and mineral supplements.
Once your facilities are ready, it’s time to acquire your goats. The choice of breed will depend on your business model – whether you’re focusing on dairy, meat, fiber, or a combination of these.
Step 6: Market & Sell Products
Once your goat farm is operational, the next step is marketing and selling your products. Whether you’re aiming to charm local consumers with artisanal cheese or supply businesses with quality meat, setting up effective sales and distribution channels is key to your success.
If you plan to sell goat products directly to consumers, you may want to set up a farm shop, attend farmers’ markets, or collaborate with other local vendors through a Community Supported Agriculture (CSA) program. Customers often prefer purchasing farm-fresh products directly from the producer, so be sure to showcase your farm and its products in creative and attractive ways.
If selling to businesses aligns better with your business plan, establish relationships with local restaurants, retailers, or wholesalers to create a sustainable market. Reach out to key potential distributors and create a marketing pitch that highlights the unique qualities of your products and how they cater to the potential audiences.
Step 7: Prepare to Launch!
As we reach the final stretch in the journey of starting a goat farm, several key actions remain. Every farm will have unique needs, but the following are common essentials for getting started on the right hoof.
Business insurance: Insurance is an important consideration because there are many potential risks associated with raising goats, such as injuries to the animals and damage to property. Some of the most common types of insurance for a goat farm include general liability, property damage, and workers’ compensation. You may also want to get livestock insurance to protect against the loss of the goats as well.
Setting up bookkeeping: Set up accounting software and systems to handle daily transactions, taxes, and the preparation of financial statements.
Opening a business bank account: Separate your personal and business finances by opening a business bank account. This will help you better manage your farm’s financial transactions and ensure accurate record-keeping.
Common Questions When Starting A Goat Farm
How much does it cost to start a goat farm?
The total cost to start a goat farm can vary widely depending on location, scale, and the type of operations planned, but a basic setup can range from $10,000 to $50,000 or more for small to medium-sized operations.
Real estate: If you don’t already own a suitable property, acquiring land and site improvements are likely going to be your largest expense. The cost depends on location, acreage, and existing facilities. Plan for $5,000 – $30,000, depending on acreage and current infrastructure.
Equipment and supplies: Essential equipment for a goat farm includes fencing, feeding troughs, milking equipment, and shelter. These costs can range from $2,000 to $10,000 depending on the size of the farm and the level of automation desired.
Livestock: The cost of your goats will vary based on breed, age, and purpose (dairy, meat, fiber, or breeding). Expect to pay $100 to $300 per goat, with initial herds often numbering between 10 to 20 goats.
Business registration: Registering your business can cost anywhere from $100 to $500, depending on the state and the type of entity you’re establishing.
Insurance: Liability insurance for the facility, products, and employees will likely cost $500 – $1,500 per year.
Marketing: Initial printing or digital design costs for logo, business cards, and website could run $500 – $1,500.
How profitable is a goat farm?
Determining the exact profitability of a goat farm can be challenging as it depends on various factors such as the size of the farm, products sold, etc. However, understanding industry statistics and making some assumptions can provide an estimate of potential profitability.
A 50-acre goat farm with 50 heads of dairy goats could generate around $100,000 in annual revenue based on average milk production estimates. Assuming an average doe produces 800 pounds of milk per year, a herd of 50 would yield 40,000 pounds of milk. With wholesale milk prices averaging $2.50 per pound, 40,000 pounds would equate to $100,000 in yearly milk sales revenue.
In terms of expenses:
– Feed costs may total $20,000 a year covering grain and hay needs.
– Supplements, vitamins, and standard healthcare would likely run another $5,000 annually.
– Utilities like power and water may amount to $3,600 annually.
– Property and liability insurance could run $2,000 a year.
– Miscellaneous supplies and operating expenses are often estimated at 10% of total revenue, adding another $10,000 in costs.
Factoring in all likely expenses of $40,600 for the year, the 50-head dairy goat farm could potentially generate about $59,400 in pre-tax net profit annually.
Of course, the above uses several assumptions and estimates. But, it provides a feasible snapshot of achievable profit levels for a midsized operation.
What is the NAICS code for a goat farm business?
The NAICS code for a goat farm business is 112420.
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.
Related: What is a NAICS code?