Tennessee Master Goat
Producer Marketing
Megan Bruch, Amanda Ziehl & Rob Holland
UT Center for Profitable Agriculture
Aaron Robinson
TSU Cooperative Extension
Objectives

Participants will increase their
knowledge of





the definition and importance of marketing
the market situation for goats and goat
meat
consumer preferences for goat meat
considerations for marketing strategies
direct marketing considerations
Introduction to Marketing
Marketing is…

Planning and executing the idea of a
product, its price and the promotion and
distribution (place) of that product to
satisfy the needs of customers


Marketing allows you to determine…
1.
If a potentially profitable market exists

2.
The identity of the target market

3.
Ability to produce at a cost low enough
and sell at a price high enough to
generate a profit
Who is likely to purchase the product
How to reach the target market

Product, Price, Place, Promotion
Introduction to Marketing
Example 1

Without Market Planning & Execution




Farmer Clark has a herd of 50 does with kids of
several different breeds
The farm loan payment is due at the end of the
month
Farmer Clark takes the kids to the local auction
barn to sell them ASAP for whatever price he can
get
Farmer Clark is a Seller and a Price-Taker
Introduction to Marketing
Example 2

With Market Planning & Execution

Farmer Jones has developed relationships with leaders in
the local Hispanic population

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Knows that the Hispanic people in her community desire young
goats about 50 lbs. live weight for Cinco De Mayo
Farmer Jones produces her kids to the desired
specifications to be ready for pick-up by customers at the
farm the first week of May at the price she sets
Farmer Jones is a Marketer and a Price-Maker
Market Situation
History of Goat Marketing in TN

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Early 1990s – Goats sold at local sale barns and off
the farm to customers, Producers encouraged to pool
goats for larger sale base
Mid 1990s – Tennessee Livestock Producers offer
goat auctions in conjunction with sheep auctions
2001 – USDA-AMS adopted live goat grading
standards and institutional meat purchase
specifications for goat meat
2002 – TLP offers graded goat sales
2005 – TLP offers 2 graded goat sales (Thompson
Station and Somerville)
Market Situation
Supply and Demand


All markets are a function of supply and
demand
Important to understand market
situation to determine market potential
and plan marketing strategy
Market Situation
U.S. Meat Goat Inventory

U.S. inventory estimated at 1.9 million
head (NASS, 2005)



Texas – 1 million head
Tennessee – 98,000 head
Some experts believe NASS numbers
underestimate true inventory dramatically
(35-45%)
Market Situation
Federally-Inspected Goat Slaughter
700,000
500,000
400,000
300,000
200,000
100,000
0
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
Number of Head
600,000
Market Situation
FI Goat Slaughter by State in FY2004
Other
28%
NJ
35%
TN
5%
NY
5%
PA
9%
TX
18%
Market Situation
Other Goat Slaughter


Some experts estimate federallyinspected slaughter is only 50 to 60%
of total
Other includes

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State-inspection programs
Direct sales to consumers
Market Situation
Imports
Exports
20
03
20
01
19
99
19
97
19
95
19
93
19
91
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
19
89
Metric Tons
Imports/Exports of Frozen Goat Meat
Market Situation
U.S. Demand for Goat Meat

Approximately 1.3 million goats slaughtered
to satisfy U.S. Demand in 2004



(by combining Federally-inspected slaughter and
imports)
Of these, over half were imported
Potential to increase domestic production if
consumer preferences can be met and cost of
production can compete with import prices
Market Situation
Tennessee Graded Goat Auction Data
Head Sold
2,250
Slaughter Head Sold
Price, Kids, Selection 1, 40-60 lb.
Price, Kids, Selection 2, 40-60 lb.
Price, Kids, Selection 3, 40-60 lb.
Price
($/cwt)
160
2,000
140
1,750
120
1,500
1,250
1,000
750
100
80
60
500
40
250
20
Ja
n
Fe -03
M b-0
ar 3
A -03
p
M r-0
ay 3
Ju -03
nJu 03
A l-03
ug
Se -03
p
O -03
ct
N -03
ov
D -03
ec
Ja -03
n
Fe -04
M b-0
ar 4
A -04
p
M r-0
ay 4
Ju -04
nJu 04
A l-04
ug
Se -04
p
O -04
c
N t-04
ov
D -04
ec
Ja -04
n
Fe -05
M b-0
ar 5
A -05
p
M r-0
ay 5
Ju -05
nJu 05
l-0
5
0
0
Market Situation
Consumer Market


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Producers need to become familiar with who
consumes goat meat, where those consumers
are located and why they consume goat meat
Understanding the “who, where and why” will
help producers in determining the ideal
“what” for the consumers
The predominantly white, middle-class
population consumes relatively little goat
meat
Market Situation
Consumer Market

The majority of people who consume goat
meat in the U.S. are from a variety of ethnic
groups

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Hispanic/Latino
Muslim
Somalis
Jamaican/Caribbean
Asian
Jewish
Christian Roman/Western
Christian Greek/Eastern
Consumption tied to religious or cultural
traditions
Market Situation
Consumer Market

Tie to religions and cultures leads to


Distinct preferences for product
characteristics
Seasonal demand
Market Situation
Consumer Preferences
Target Audience
Hispanics or Latinos
Young milk-fed kids, cabrito, 15-25 lbs.
live weight
Young goats, 25 lb. carcass weight or
50 lb. live weight
Young bucks, 65 lb. live weight

Animal Type
Preferences
Processing
Preferences
Seasonal Demand
Skinless
Feet off
Head on

Cinco de Mayo
Easter

Market Situation
Consumer Preferences
Target Audience
Animal Type
Preferences
Muslims
35 lb. carcass weight, 70 lb. live weight
Lean carcass (discriminate against fat)

Halal slaughter
Slaughter and processing cannot be
done in facility used to harvest swine
Head on
Skinless

Processing
Preferences
Start of Ramadan, Month of Fast
Eid-al-Fitr, Festival of Fast Breaking
Eid-al-Adha, Festival of Sacrifice
Celebrate birth of child

Seasonal Demand
Market Situation
Consumer Preferences
Target Audience Somalis
35-40 lb. carcass (Perceive larger
carcasses are from older goats and
therefore lack quality)
Prefer grass-fed goats
Prefer fresh meat over frozen

Animal Type
Preferences
Processing
Preferences
Halal (but will sometimes accept Kosher)
Slaughter and processing cannot be done
in facility used to harvest swine

Start of Ramadan, Month of Fast
Eid-al-Fitr, Festival of Fast Breaking
Eid-al-Adha, Festival of Sacrifice
Celebrate birth of child

Seasonal
Demand
Market Situation
Consumer Preferences
Target Audience
Caribbean Islanders
(Haitians and Jamaicans)
Mature bucks, 140 lb. live weight
Older, poor-conditioned goats
Young smelly bucks, 60-80 lbs. live weight

Animal Type
Preferences
Headless
Skin-on
Feet on
Heavily singed
“Cubed” bone-in meat

Processing
Preferences
Seasonal
Demand
Summer Months
Jamaica’s Independence Day (August 6th)

Market Situation
Consumer Preferences
Target Audience
Animal Type
Preferences
Chinese

60-80 lb. live weight

Winter – Chinese New Year
Processing
Preferences
Seasonal Demand
Market Situation
Consumer Preferences
Target Audience Jewish
Animal Type
Preferences
Processing
Preferences
Seasonal
Demand

Young goats

Kosher
Passover
Yom Kippur

Market Situation
Consumer Preferences
Target Audience
Animal Type
Preferences
Christian Roman/Western
Young goats, 22 lb. carcass
weight or 45 lb. live weight
Milk-fed kids, 18 lbs. or more live
weight

Processing
Preferences
Seasonal Demand
Easter
Christmas

Market Situation
Consumer Preferences
Target Audience
Animal Type
Preferences
Christian Greek/Eastern Orthodox
Young goats, 22 lb. carcass weight
or 30-45 lb. live weight

Processing
Preferences
Seasonal Demand
Easter
Christmas

Market Situation
Demand in Tennessee


Hispanics are the largest and fastest
growing ethnic minority group
Additional resource –
The Growing Hispanic Population in Tennessee
http://extension.tennessee.edu/publications/pbfiles/PB1762.pdf
Market Situation
Demand in Tennessee

Other ethnic group
populations, such as
Muslims, located in larger
metropolitan areas

Nashville, Memphis,
Knoxville, Chattanooga
Marketing Mix/Strategy

The four Ps of marketing


Product, Place, Price and Promotion
Base your strategy on


Your goals and objectives
The needs and values of your target
customers
Marketing Mix/Strategy
Product

Live Animal

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Breed
Type of feed
Age of animal at
harvest
Weight of animal at
harvest
Condition of animal
at harvest
Gender of animal
Timing of harvest to
meet demand

Meat

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Harvest procedure
(Kosher, Halal)
Fabrication
specifications
Fresh vs. frozen
What product will you produce?
Who is your target customer?
What product characteristics
do your customers want?
What are your goals?
Marketing Mix/Strategy
Place -- Marketing Channels
Meat Goat Producers
Brokers/Traders
Individual
Consumers
Local Auctions
Marketing
Cooperatives
Producers can
also serve as
processors,
wholesalers
and retailers.
Processors
Regional
Auctions
Wholesalers
Retailers
Individual
Consumers
Meat/Grocery Stores
or Restaurants
Marketing Mix/Strategy
Place
What market channel will you use?
Which method would help you best
meet your goals and objectives?
Who is your target customer?
Where can you reach the target
customer?
Marketing Mix/Strategy
Price


Prices for Selection 1 kids at TN auction
range from $99.10/cwt in October 2003
to $152/cwt in April 2005
Ohio study (2003) found Somali
customers paid $0.80-0.85/lb. live
weight or $60/hd

Willing to pay $1.99/lb frozen or $2.99/lb
fresh goat meat
Marketing Mix/Strategy
Price
What price will you seek or charge?
What product are you providing
(quality, value-added)?
How widely available is your product?
What market channel are you using?
What is your target customer
willing to pay?
What does the product cost to
produce?
Marketing Mix/Strategy
Promotion
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Advertising
Word-of-mouth referrals/reputation
Public relations/publicity
Web site
Marketing Mix/Strategy
Promotion
How will you promote the product?
What product are you producing?
Who is your target customer?
How can you best reach your target
customer?
What is your marketing budget?
Direct Marketing Considerations

Considerations for


Direct marketing of goat meat
On-farm harvesting
Direct Marketing Considerations…
for Goat Meat

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
Must be harvested, processed and packaged
in a USDA-inspected facility
Must be labeled with product name,
ingredients, source name and address, net
weight and USDA seal
Packaging must include
safe handling information
Direct Marketing Considerations…
for Goat Meat


If selling meat directly to consumers
(retailing)  need retail permit
If wholesaling meat (like to distributors,
stores or restaurants)  need wholesale
permit

If storing meat other than at USDA-inspected
facility  likely need a warehouse license

…from TN Dept. of Agriculture Regulatory
Services
Direct Marketing Considerations…
for Goat Meat


Direct marketing food products
introduces farmers to additional liability
risk
Risk management methods may include
the purchase of food product liability
insurance
Direct Marketing Considerations…
for Goat Meat

Not all slaughter facilities are USDAinspected

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Custom-exempt facilities slaughter/process
animals when the animals will not enter commerce
Example – A customer may purchase a live goat
from Farmer Smith. Farmer Smith delivers the
goat to a custom-exempt slaughter facility where
the customer pays to have the goat slaughtered
and processed for their use at a holiday
celebration.
Inspected by TN Department of Agriculture
Must meet Good Manufacturing Practices like
USDA-inspected facilities
Direct Marketing Considerations…
for On-farm Harvesting

When selling live animals from the farm,
farmers may be asked
1.
2.
Can the farmer legally harvest the animal for
the customer?
Can the customer legally harvest the animal
on the farm?
Can the farmer legally harvest
the animal?


No, not without meeting
regulations required for customexempt slaughter
To learn about specific
requirements, contact the
Tennessee Department of
Regulatory Services
Can the customer harvest the
animal on the farm?




???
No known regulations exist for
slaughter or inspection in this case
Environmental regulations for
disposal of offal?
Implications for product and
landowner liability if customer is
injured or becomes ill?
Summary

Topics covered





the definition and importance of marketing
the market situation for goats and goat
meat
consumer preferences for goat meat
considerations for marketing strategies
direct marketing considerations
Tennessee Master Goat
Producer Marketing