Agriculture producers, including goat producers, receive a much smaller proportion of the consumer’s dollars than do food processors. Capturing those value-added dollars is a goal of many producers.

Adding value to an agricultural product means changing the product and taking it to the next level closer to a consumer product. It simply means that, instead of selling 90-day-old weaned kids at auction, the producer keeps the ownership in those kids until they are processed and reach consumers, thus getting a higher price. A value-added agribusiness operates on the basis of understanding goat meat customers and their desires so that the producer has input at different steps in the value-added chain.

Value-added agribusiness focuses on the demand side to provide a unique product or service. As a goat producer, you would keep ownership of the goats while growing to 60-80 pounds, while slaughtered and sold as various meat cuts or, processed into sausage links or patties, etc. There may even be a market for skin, tongue, viscera, etc. In Texas, some of these value-added agribusinesses average more than 60% return on product assets. Many have less than five employees and make less than 50,000 lbs. of meat sales per year (about 1,250 goats slaughtered per year or less than 25 goats processed per week).

These agribusinesses are located in rural areas and serve the local population. These smaller firms are usually more profitable, as they generally have developed a solid business plan and have conducted market feasibility studies. A successful value-added agribusiness entrepreneur will adapt to change, be open to new ideas and opportunities, and manage internal and external resources well. (For more information, please see Adding Value to Agricultural Products by Anderson and Hall, 2005).

Anderson, D. P., and C. R. Hall. Adding value to agricultural products.
http://agpublications.tamu.edu. Accessed December 1, 2005.

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