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Project Pivotal-Rig
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Enterprise 38

The Goats System

  

Thinking of goats as "brush" animals or as cartoon characters eating tin cans is an affront to everyone who knows these animals or to those who realize their potential. I do not know why goats have the public image that they do. Perhaps the reasons need to be analyzed so that marketing of goat systems can proceed.

Subsystems are the topic of most of my writing and thought. They are the pieces of a larger system for people and their lands and resources. The topic here is a goat-centered profit-maximizing system. I do not know where the appropriate limits should be drawn, the context specified. The individual or group can draw its own limits, based on available resources and interest.

There are hundreds of thousands of goats in developing countries where their history is recorded on vases 5000 years old. They are in most cases not reaching their potential individually or as a system because of genetically imposed potentials, poor or overused ranges, lack of a production-management system, faulty marketing, limited medical care, and limited experienced workers. There seems to be at least a little room for improvements. Even in developed countries there exist major opportunities for improvement, even in the management and care of a few animals. The potentials in larger systems can be impressive.

Dairy goats are not just "small cows." There are many reasons for creating goat systems as well as cattle systems. Some people just like goats! That is reason enough, for the rationale is like that of some people preferring certain models of automobiles, etc. Goats are more efficient than cows in forage energy use for milk production, survive bad range or forage years better than cows (thus reducing entrepreneurial risks and boom-or-bust situations), can improve the range, and have more stable benefits than cows. They do require more manual labor than cows, but this is appropriate in some areas where there is surplus labor and/or where an active life outdoor life is viewed as one having high quality.

Profits are a well-known concept. Intensive management of herds and their lands is essential or profits will not be made. Whether the emphasis is on the land, the goats, or the money, in the final analysis there must be the well-known profit. The objective of such a system must be seen not as producing goats or milk, but as being a vital part of a profitable natural resource system. There may be other objectives such as :

  • finding and developing stable, long-term, energetically efficient systems;
  • diversifying land use;
  • diversifying enterprises in regions;
  • improving regional economic stability at current or higher rates;
  • discovering new algorithms and approaches to managerial decision making;
  • finding animal surrogates for wild deer to reduce costs of and speed returns from wild-animal research, and
  • demonstrating the economies of large, diverse systems-work. Profits need to be defined precisely as present-discounted net returns. Present discounting is discussed elsewhere but relates to adjusting investments based on equivalent returns that might be made if an alternative investment was made. A fundamental question is simply: what is the difference between this investment in a good subsystem and putting the same money in the bank? If I do not get the same or greater return, perhaps bank savings would be a more rational action. Profits are net values, discounted gains minus present-discounted losses. Gains are not just products but price per unit of product and the total production. The products that a goat system manager might envision, and the associated gains will be the sum of the product items times their price times their expected sale. The potential products include all of these listed in Table 1. Each has its own price, expected production, expected sales, and limitations.
    Table 1. Potential products or sale units from a dairy goat-centered system. The system brings high technology and sophisticated management to ancient pastoral animal care. Retaining deep concern for and humane care of the animals, the new industry skillfully produces needed and healthful products for the people of a region. Together, skillfully mixed, the products form a diverse, stable, source of income for people, and, through sensitively controlled grazing, contribute to improved land management.
    1. Goat sales
    2. Nursery service for doe kids (3-4 weeks to 7 months)
    3. Milk
    4. Cow-goat milk mixtures
    5. Infant aids (cholostrum)
    6. Milk for specialized raising of dogs and horses
    7. Butter
    8. Cheeses
    9. Yogurt
    10. Ice cream
    11. Goat milk fudge candies
    12. Milk and milk product analyses
    13. Hides and pelts and specialized leather products
    14. Glue
    15. Salves and medicinal mixes
    16. Soaps and rinses
    17. Garden fertilizers
    • urine base
    • feces
    • hair
    • bone-meal and blood
    18. Garden soils, e.g., mixes
    19. Erosion control products
    20. Grazing-area management systems
    21. Land rehabilitation service component
    22. Meat
    23. Meat products and composites (stews, meals)
    24. Herd sire selection service (germplasm) *
    25. Artificial insemination service
    26. Photography, art, journalism and associated supplies
    27. Facilities (including construction) and equipment
    28. Accounting and budgeting services
    29. Records and registration services
    30. Publications
    31. Education services (breeders, etc.)
    32. Insurance services
    33. Boarding services
    34. Show and judging services
    35. Marketing and advertising services
    36. Advanced goat and deer research 37. Computer management aids, e.g., feed mix optimization service
    38. Optimum feed mixes
    39. Novosports games e.g., Cappy
    40. Computer-aided health services
    41. Marketing services

    *Preserving a genetic line, while not a "product unit," may result in future benefits.

    The objective for the goat system can be formulated as:

    K = aiBi/ diCi

    where the performance, K, is expressed as the total expected benefits (B) to the system owners or stockholders per unit of expected total costs. This is a modified benefit-to-cost expression that the wise manager seeks to maximize (subject to a set of constraints). The coefficients, a and d, are expressions of the probabilities of success of each ith benefit or cost over a planning period (say until owner's life expectancy or 50 years). Similar quanification of objectives occurrs throughout the system.

    The benefits are to be (might be) gained from sales and activities associated with the items in Table 1 above. The needs are for many activities and products (diversification) to stabilize the enterprise through periods in which styles, preferences, and buying patterns - - as well as production - - change and where opportunities for adding value can be seized.

    An advanced objective becomes one of maximizing the sum of the expected, net, present-discounted product sale value over the period of the owner's life expectancy plus the expected estate liquidation value. Producing milk profitably is a real challenge. Our plan is to develop a linear program for optimum herd size (as we have done for cattle within the Virginia coalfields). We estimate the herd to have 700 animals in about 30 herd-units throughout the region. A goat milk co-op is forming near Hiwassee, Virginia, and we shall attempt linkages there at first. Educating herdspeople, developing facilities, and recruiting a veterinarian for the nutritional and health needs of such a large herd will be challenging. Protecting the animals from increasing coyote and bear populations will require special studies. The megachallenge, however, now approachable because we are armed with a computer, is the above objective that deals with all of the commodities in Table 1 as well as the complex locally-specific details of corporate planning and offering estate planning to those whose pastures we develop and use within The Goats System.

    Estimates

    Contracts for pasture use and management are developed with owners. We supply stock and facilities. Owner supplies personnel or hires from us. Profits are shared with the owner and others as specified under "financial incentives strategy." Development costs are: $200,000. Profits for Pivotal-Rig, Inc. are estimated as:

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