Rural Industries Research & Development Corporation

RIRDC Short Report:
The Economics of a Commercial
Cashmere Goat Enterprise

THE FULL REPORT

This is a comprehensive summary of the full research report The Economics of a Commercial Cashmere Goat Enterprise by Lloyd Davies and Geof Murray. RIRDC Research Paper Series No 97/10 (January 1997).
It is available from RIRDC for $10 plus $6 p&h -
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Should Cashmere goats be part of your farming operation?

The Cashmere goat industry is maturing, with the price paid for breeding stock in line with the commercial returns. Efforts of dedicated breeders will mean that future returns are likely to improve.

Apart from the fibre return, additional benefits are obtained from keeping goats, including the following:

• they can be used in weed control, saving spraying costs;
• they result in better pastures that benefit other livestock or cropping enterprises;
• they diversify income;
• they may fit in well with labour availability on the farm.

However, Cashmere goats are not without their problems.

• Fencing has to be better than for other livestock enterprises, including Angora goats.
• Goats need different handling to other stock.
• Goats require excellent management to achieve good kidding percentages.
• Predation is a significant problem and losses due to exposure in cold weather are common. The use of shepherd dogs is now common.
• Prices paid recently for cashmere have varied widely.
• The prices paid for goat meat have been variable, though the capretto (kid goat) market developed in Western Australia has provided an excellent outlet.

Comparative Returns

Gross margin estimates as at November 1995 for several livestock enterprises are listed in the table on page 3. The key figure to examine is the gross margin per dry sheep equivalent (DSE). This allows comparison of all enterprises according to the amount of feed consumed. It has been calculated that a Cashmere doe and her progeny (retained at least until after the first shearing) require 2.27 times as much feed as a merino wether. To compare the two on a per DSE basis the cashmere gross margin per head is divided by 2.27.

The information in the table shows that Cashmere goats with at least eight years of selection from a feral flock are currently producing comparable gross margins on a per DSE basis. Coupled with the other benefits this can still be a major consideration on many properties.

For the Western Australian producers with access to a premium capretto (kid goat) market, returns are superior to most other livestock enterprises. Comments from Western Australia suggest that prime lamb is the only livestock enterprise currently matching Cashmere/capretto or Angora/capretto enterprises.

In cases where capital is limitedù and this is likely across much of rural Australiaù return per $100 of livestock capital is another major consideration. Goats, especially cashmere enterprises, compare favourably on this basis. Selection for goats with cashmere potential has been in progress for only about 15 years. Genetic progress is likely to improve returns, as would the development of a capretto market in eastern Australia.

Returns on capital invested can vary from more than 100 per cent where all facilities, such as fences, are already available and goats can be introduced without reducing other stock numbers. A negative return can occur where the introduction of goats requires a reduction in numbers of other stock, the gross margin per DSE is higher for other stock, and no weed control costs can be saved.

GROSS MARGIN RETURNS FROM CASHMERE, ANGORA, SHEEP AND BEEF ENTERPRISES

^a A dry sheep equivalent represents the amount of nutrition required to maintain the weight of one 45 or 50 kg wether. The bigger weight has been used in this report because it is closer to the actual weight of most present-day wethers.

^B Source Crean (1996)

 Capital Requirements

Fencing. Significant capital outlays can be required if fencing must be upgraded to hold goats. Angora goats are held with good sheep fences, but Cashmere goats generally need improved fencing. Adequate control is often achieved with electric fencing. The cost of upgrading fences will generally vary from $300 per km for a simple electric outrigger to more than $3000 per km for a new fence.

Yards are also required. Sheep yards can be adequate but often need to be heightened. Cattle yards can be adapted by securing the lower sections so that goats cannot squeeze under. Most goat producers recommend a special race that is narrower at the bottom than the top to help prevent goats turning around or going down.

Shearing sheds. Very few adaptations to a sheep shearing shed are required. If both sheep and goats are to be shorn in a shed, extreme care is required to avoid cross fibre contamination. Cashmere goats are shorn standing up with the aid of a head stall. This is usually done in June to August each year. Good protection from breezes is required because cashmere fibre is so light.

The capital outlay for fencing, yards and shearing facilities will often be so high that starting in goats is not justified.

Benefits from Goats

The range of weeds that can be controlled by goats has been widely reportedùparticularly blackberry and briar. Some thistles are also controlled at certain stages of their life cycle. The use of goats to manage problem weeds can have many benefits.

• Spraying costs can be eliminated or significantly reduced.
  
• In areas with high weed populations, goats may be introduced without reducing the numbers of other stock on the property.
  
• Cleaning up a paddock with goats aids mustering and reduces rabbit harbours.
  
• Goats grazing with sheep or cattle can result in improved performance of the sheep or cattle by grazing species which are generally more fibrous, leaving superior pastures for the stock that follow.
  
• Goats are used in establishing new pastures, strategic grazing keeping down unwanted competition.
  
• Goats are very good in controlling regrowth of many tree and scrub species.

Cashmere goats have considerable potential for weed control, especially in the tablelands areas of eastern Australia where blackberry and briar are a problem and many landholders spend more than $3000 per year on chemicals. Goats can contain the problem in an environmentally friendly way. Labour costs and machinery wear-and-tear are saved.

Research by Bruce McGregor on Victorian improved pasture shows that mixed grazing with goats and sheep produced complementary grazing benefits. Most of the benefits are due to improved production performance from the sheep. There is similar anecdotal evidence for improved performance of cattle when run with goats.

Management Difficulties with Goats

One of the biggest impediments for prospective goat farmers is the fear that they may not be able to properly manage the animalsùgoats have a reputation of being very difficult to handle. Much of this rumour is incorrect.

Producers should watch someone experienced in working goats to see how they handle them. There will be a farmer in most districts happy to give a new entrant some pointers on handling goats. Experienced producers can move goats and handle them as easily as other animals.

The major times where poor management can result in significant losses are at kidding and immediately after shearing. Kidding losses can be particularly high in Angora goats. As Cashmere goats have recently evolved from feral goats, kidding results are generally satisfactory. Predator control is essential, and protection from extremely cold weather is required.

Losses can also occur immediately after shearing. Cashmere grows only from January to June as the days shorten. The goats are generally shorn in June to August before the fibre falls out. Some producers in extremely cold areas may elect to shear in May before the worst of the cold weather. If shorn in May, some cashmere will still grow to give winter insulation. In exposed areas, artificial shelter may be necessary immediately following shearing. If fibre prices are low producers can opt not to shear the goats.

Fibre Prices

Prices paid for cashmere have fluctuated considerably. Weighted average prices for hosiery cashmere of less than 16.7 microns and weaving cashmere of 16.7 microns are shown in the accompanying graph. The information is from the Australian Cashmere Marketing Corporation (ACMC) founded in 1986.

The graph shows that prices were relatively stable from 1988 to 1990. Prices then fell significantly until a recovery in 1994. In 1992 there were no sales and producers who shore their goats had no cash flow for this period. It is hoped that the circumstances leading to complete price collapse at that time will not recur. However, the price variability is such that most commercial farmers would not wish to have a large portion of their income reliant on cashmere.

 

Cashmere prices in Australia 1986-1995

 

 

Production and Marketing

Production of cashmere in Australia is about 1 per cent of the world total. China is the major producer. Most cashmere is sold through the ACMC. Its depot is at Guildford in Sydney.

Australian production has fallen since 1988. It is expected to rise due to the recent price increase, recovery from drought, and the present cloud on price prospects for the wool and beef industries.

With the vast majority of world cashmere production currently coming from areas considered relatively unstable, major processors are looking to countries like Australia to establish a significant cashmere producing industry to give them reliable supplies. A reliable supplier means that research can be justified to develop processing technology and for product and market development.

Conclusion

There is potential for many Australian mixed-grazing properties to improve their profitability by introducing Cashmere goats into their enterprise.

Farms where goats are likely to be most easily justified are those with significant blackberry or briar problems and where goats may be added to the existing enterprises. There is also significant potential in Western Australia where gross margin returns have been significantly improved by the establishment of the capretto export market.

The biggest impediments to commencing a cashmere enterprise can be the capital required to upgrade fences, yards and perhaps shearing facilities. Large capital outlays for structural improvements are very difficult to justify and will make economic sense only if the investment will also benefit other enterprises.

References

Allen, C., Holst, P. and Campbell, M. 1993. Weed Control Using Goats. NSW Agriculture Agdex 640. ISBN 0 7305 6735 4.

Crean J. 1996. NSW Agriculture, personal communication.

May, T., Holst, P., Allen, C., Dellow, J., Davies, L. and Graham, P. 1995. Integrating Goats. NSW Agriculture.

Acknowledgment

Editorial comments from Maria Rose formerly of RIRDC are gratefully appreciated. Also thanks go to the cashmere producers for the information they provided and the comments they made on earlier drafts.