Dairy Goat Cost of Production & Benchmarking Project Approved

Ontario Goat secures funding through Growing Forward 2

Ontario Goat (OG) is launching a new three-year project – the Dairy Goat Cost of Production (COP) and Benchmarking Study – thanks to support from the Growing Forward 2 program. This comprehensive study will collect data from licensed dairy goat sample farms and a COP tool will be created through industry collaboration during a pilot study.

Data collected from this project will not only generate a COP value; it will also help to establish a benchmarking system that can be used as a financial management tool by all dairy goat farmers and industry partners.   “It is our goal with this project that Ontario dairy goat producers are able to adopt new and innovative business management practices that ultimately improve profitability and competitiveness of individual farms and the industry as a whole,” stated OG Executive Director Jennifer Haley.

The dairy goat sector continues its exponential growth and this year’s projected production will close in on 40 million litres – an increase of 10 million litres in the past five years.  With current projections for future growth, the volumes could increase substantially again.  Dairy goat producers are now transitioning from a niche market to a mainstream commodity market which impacts pricing and margins.  With a growing sector, it is important that there are tools and resources to help producers determine their COP and establish industry benchmarks.

“In the future, the margins for producers will be made more on volume and production efficiencies.  It is important that producers have a solid understanding of cost control,” states Anton Slingerland, OG President.  “This project will help producers and industry partners get to where we need to be.  COP was one of the three key priorities set for the industry as part of our agreement between OG, Hewitt’s Dairy Ltd., and the Ontario Dairy Goat Cooperative, so we are very pleased that this project was approved,” added Slingerland.

This project is different than other studies done in the past, as it allows producers to truly differentiate their COP for the cost of producing milk and excludes the costs related to other enterprises on the farm and any off-farm income.  The data will be collected over a three-year period starting January 2015 so  costs are an accurate reflection of what was paid during the year.  A 3rd party accounting firm will collect all of the data at the farm to provide additional professional accuracy, integrity, and transparency.

An accurate COP model can be used not only for self-assessment, benchmarking and maximizing efficiencies but will provide information to better evaluate expansion and start-up opportunities.  Industry partners will also be able to use the data to help provide sound advice to their clients. The COP report will also help producers to better access financing from lending institutions as there will be credible information available.

This project was funded in part through Growing Forward 2, a federal-provincial-territorial initiative.  The Agricultural Adaptation Council assists in the delivery of Growing Forward 2 in Ontario.

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