FEASIBILITY STUDY

ESTORGIO GOAT FARMING CO.

LOCATION
Proj. Mambatangan, Cagayan de Oro City

A SUBSIDY FROM ALPHA OMEGA WORLD TRUST FUND

SAGRADA FAMILIA

Php10M Project

SUBMITTED BY: LEOCADIO M. ESTORGIO

PHMI NO. 3095582
 CHAPTER I
FEASIBILITY STUDY

I. Executive Summary
A. Name of the business: Estorgio Goat Farming Co.
Commercial Goat farming is gradually gaining popularity due to its high
demand and good economic prospects. The production inputs required are the fixed
investment includes property ranch home, warehouses, pasture space, water pump,
feeding trough, spade, wheelbarrow and ropes.

Goats require low maintenance because they eat tree leaves, weeds, grasses,
and agricultural by- products. They are not only a source of protein for Filipinos, but they
also provide the much- needed income. In fact goats provide livelihood to about 15
million Filipinos across the country today.

As goat production requires low initial investment and small risks compared to other
livestock species, it is thus an attractive undertaking among resource- poor families.
Moreover, women and children can raise the species, making it a sound option to
augment the country’s programs on livelihood.

At the moment, there is an increase in demand for goats. Although total goat
inventory in the country is steadily increasing at 2% per year, still there is not enough
supply to meet current demands. It is expected that this increased demand will last to
2020, the year when supply is projected to meet demand.

Considering these, goat production is indeed a promising venture and anyone

interested to go into this business is expected to reap positive rewards.

Goat milk and its products are known for its properties regarding the health
benefits. They are easy digestible food with a high nutritional value and curative
properties. They are used as food, for prevention and treatment. Their consumption
improves immunity, resistance to diseases, provides faster growth, optimal body
weight, better bone mineralization etc. There have been numerous researches
indicating that goat milk has anticangerogenic properties. On the other side goat
meat is low fat meat, easy digestible, good tasting and presents alternative to
chicken or fish, suitable for those who care about their diet. Goat milk is a unique
production niche with potential to growth which is not competing with cattle dairy
sector. Goat products, with certain preconditions created, such as standardized
quality, guaranteed food safety, continuity in delivery, branding, attractive
packaging, etc., have export potential. Goats have importance in environment
protection. They are meant to be browsers and then grazers and therefore can be
used in controlling of annoying vegetation, elimination of brush that feeds fires, and
restore pasture quality.

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 Goat raising in the Philippines have not been fully tapped because most of
the people prefer cow’s milk. We import from other countries just to sustain our
needs for cow’s milk and with regards to goat’s meat, others don’t like the taste
because they say goats are “mapanghi or maanggo” (smells like urine) similar to
lamb. And since very few livestock raisers go in to goat raising we seldom see those
in wet markets and supermarket maybe because you need to know how to prepare
goat meat before cooking to lessen the “smell” unlike beef, pork or chicken which
doesn’t require much knowledge in cooking.
B. Title of the Study: A Feasibility Study on Feeds and Farm Services

C. Site/Location : Proj. Mambatangan, Cagayan de Oro City

D. Purpose of the study

This study is an informative document which may help in designing potential
projects aimed at development of the sector and ultimately poverty reduction in
rural areas. Mambatangan , with all its natural resources can feed themselves and,
with some preconditions which are quite achievable, can offer good export products.
Goat products are amongst them. The key driver and initiator of this study in
broader terms is revitalization of the local economy, facilitating sustainable
economic growth, via the creation of the employment opportunities and making
better use of available physical and human resources. The specific objectives are
two-fold:

 Inclusive market projects implemented, by supporting the set-up of goat farms

within the rural areas which have been identified as seriously underdeveloped and in
need of assistance.

 To link those and the existing farmers to the potential market channels and sales
opportunities

 Creation of employment opportunities for poor within the value chains, especially
returnees and those living in poorest regions
Wider objectives are:

 Identifying regions ideal for set-up of goat farming opportunities

 Improvement of goat farm productivity, and

 Improvement of services to support the goat sub-sector.

E. Objectives
The main objective of the study is to document and assess the development of
the Philippine goat industry within the supply chain. Specifically, the study aims to:
1) Provide a baseline documentation of the developments in the Philippine goat
industry from input supply, production, processing, marketing and consumption;

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 2) Identify the best practices along the supply chain approach;
3) Develop competitiveness and profitability analysis of chevon;
4) Advocate improvement for the inefficiencies, gaps and problems encountered
by the industry along the supply chain; and 5) Recommend strategic directions for the
Philippine goat industry.

CHAPTER II
MARKET FEASIBILITY
INPUT SUPPLY
Goat inventory are increasing by six percent per year The country’s goat
inventory (as of January 1, 2006) was estimated at 3.73 million head, 5.6- percent higher
compared with last year’s headcount.6 Around 38 percent of the goat population was
female breeders, 33 percent were kids, and 29 percent were classified as fatteners and
male breeders. It is important to note that there was an increase of 23% in goat
inventory from January 1, 2003 to January 1, 2007 for an average annual increase of 6%
per year. The total inventory of goat went up from 3,270,441 heads in January 1, 2003 to
4,037,574 heads in January 1, 2007.
Supplier industries are benefiary from the production and processing technology
initially adopted by the other livestock commodities The suppliers of the goat industry
are those industries, which provide raw material inputs and processing technology. Raw
materials inputs include: breeds, feeds, animal health products and production
technology. Processing technology includes, among others, meat-processing equipment,
packaging materials and other utilities. Since 2001 up to present, more and more
breeder farms are into the business of supplying either imported breed of goat such as
Boer, Saanen, Anglo Nubian, etc., locally borne crossbreed or upgraded goats either
from the imported breed themselves or with the native goats. According to Neo Abalos,
the Secretary/Treasurer and also the head of the goat business of Abalos & Sons Agro
Industrial Corporation, among the different breeder farms of goat, their group have
almost already perfected the crossbreeding of imported breed and upgrading of native
and imported goat, to the extent that they have now a standard size of goat either for
breeding or for slaughtering purposes.
Some goat industry stakeholders in the breeding operations has almost
perfected the pure breeding crossbreeding, and upgrading operation with standard
weight for either breeding or slaughtering purposes Based on their experience, an F1
breed type from purebred imported will give you an estimated value of P5,000 per head.
In every generation, there is an increase of additional peso value of P5,000. So for F2, it
is sold at P10,000 per head while F3, at P15,000 per head, and so on. In the case of goat
feeds, there are some companies that are producing goat feeds, although, according to
him, the goat raising business is not that sensitive to commercial feeds, as goats
normally eat grasses, which they plant as feeds for their goats. In one hectare of land,
they can already pasture and housed at least 100-doe level of different kinds of goats
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such as imported, crossbreed and native type. Another advantage of the goat
production compared with other livestock, particularly hog is that, in terms of
vaccinating goat or using animal health products, the goat producers are not too
dependent to veterinary health products. Goats are considered as robust animals. They
can easily adopt and survive in Philippine environment free from animal diseases.
In the Philippines, with the development of the livestock and poultry industry
input suppliers, the goat industry serves as beneficiary for any developments and new
trends in the production and meat processing technology that are being used by other
livestock industry commodities. Although when it comes to artificial insemination (AI)
technology, the goat industry, in general, is not yet adopting this technology in their
individual goat farms. Imported live goats for breeding are increasing but there still
more effort to be done to encourage more investment among farmers to shift from
backyard to commercial operation to sustain the stable and availability of goat supply
There are seven breed type of goats that are being imported as part of the input supply
(Please see Table 2), although only two are the most popular breed type, which are
Anglo-Nubian and Boer. Boer is much larger and efficient meat producer than any other
breed of goats (e.g. Saanen, Anglo-Nubian, etc.). It produced as high as 48 to 60 percent
carcass yield compared to other goat type, which according to one industry player is
only from 40 to 43 percent. Data from the BAI showed that from 2002 to 2006, there are
1,172 Boer types that were imported. On the average, Boer type has been growing by 16
percent per year. Total importation per year during the same period had been increasing
by 72 percent per year. The increase of importation of imported goat could be
attributed to the growing number of local goat farms or breeder farms that are investing
in upgrading and crossbreeding operation of goats. One problem that can be traced
from the importation figure which the researchers gathered is that, there are some goat
importations which are imported at least in two breeds in one shipment that in the
declaration of imports, one breed cannot directly separated from the other.

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 CHAPTER III
TECHNICAL FEASIBILITY
What products do I get from goats?

The following table briefly discusses the possible business enterprises one can focus on, the
required investment, the final product and estimated income, and the potential market for the
products

Business Investment Product Market

Pure or upgraded
Nubian, Toggenburg,
or Boer buck (P7,500
to 12,500/hd) +
Native or upgraded Pure or upgraded
does (P1,500 to breeders for sale Private multiplier farms and
Sale of breeders 4,000/hd) (P3,000-12,500/hd) government institutions

1 upgraded Boer for

every 25 females + Live animal for sale
100 does for every 1 (P120 to 180/kilo
slaughter goat for sale or minimum of 4,500/hd Meat vendors in the wet
per day; 200 does for 2 per day) marketKambingan
Sale of goat meat goats/day sale; and 300 Processed meat restaurants, hotels
or live slaughter does for 3 goats/day like “tapa,” “tocino” or Supermarkets
goats sale “satey kambing”

Buck service (P50 to

Buck-for-hire Pure or upgraded buck 150/service) Goat raisers in the village

Pure or upgraded goats

of the Anglo Nubian Goat milk (0.7-2 kg in
(AN) or Saanen 215-250 days of
breedTools and milking)Yogurt, cheese Market where fresh milk is
Sale of products equipment for Soap, lotion soldCosmetic
from goat’s milk pasteurization of milk manufacturing companies

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To start a profitable goat business, one has to have the following production
inputs:
For backyard operation
1.) Investment
o Goat house
o Breeding stocks

2.) Operating expenses

o Veterinary medicines
o Vaccines
o Concentrates
o Additional feed supplements For commercial or large-scale operation

3.) Fixed investment

o Land
o Goat house
o Fences
o Pasture area
o Water pump
o Feeding trough
o Spade
o Wheelbarrow
o Ropes
4.) Stocks

o Breeding does
o Breeding bucks

5) Operating expenses
o Veterinary medicines, drugs, and vaccines
o Feed supplements and goat rations
o Labor: fixed and seasonal
o Repair and maintenance of goat house fences, equipment, and pasture
Goat Housing
Whether on range or confined feeding, housing provisions are necessary. A goat house
or shed must be built to provide shelter. Goats are afraid of rain and wetness as these
make them prone to pneumonia. They also prefer sleeping in elevated flat forms like a
stair type arrangement. It must be well ventilated and drained and easy to clean.
Feeding racks (silage, water, mineral and concentrate) should be accessible to
both animals and caretaker, preferably in the front of the aisle. Flooring should be
provided and elevated at least 15 degrees to facilitate cleaning and drainage.

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 Separate pens should be provided for lactating and dry does, kids, growers and bucks.
The buck pen should be visible to breeding does yet far enough to avoid transfer of the
typical goat smell especially to lactating does when milk is to be sold.

Flooring (sq.m.)

Does/Bucks/Adults 0.75 – 1.50

Growing 0.50 – 0.75

Kids 0-20 – 0.50

A fenced loafing area beside the goat house must be provided (100 to 150
sqm/250 head), complete with feeding racks and water troughs to allow animals to loaf
freely. Flooring of the area must be cemented to facilitate drying. Cogon and nipa as
roof materials are preferred in hot and humid areas.
Ventilation is of outmost importance. Majority of pneumonia cases can be traced to
excessively warm and humid interior and sudden changes in temperature. Allow a 0.5 to
1 feet clearance between floor to wall and wall to beam to create an adequate
circulation and to lower draft. It is desirable to maintain an interior temperature of 28 to
30°C. It has been established that above 30°C ruminants are inhibited from eating.

PROCESSING

Goat Products
Goat products and by-products are many and varied. The main products are milk and
meat (chevon). According to Southard (2003), the name chevon or goat meat was taken
from the French word for goat, chevre is said to be an excellent flavor similar to beef and
venison. Goat milk is used essentially for the same purposes as cow or carabao milk
such as fresh milk, cheese, ice cream, and butter. Also, because of the milk’s high
Vitamin A content, it is increasingly being used in the manufacture of cosmetics. Goats
when properly slaughtered, cleaned, and butchered, can be a source of unique and
delectable meat, which may be used in a wide array of dishes. Goat meat has high
water-holding capacity. As such, it is also a good raw material for processing into
different products. By-products, especially skins, are likewise valuable when processed
into leather. Other minor by-products such as intestines, horns, and hair are processed
into high-valued articles and art objects.
Pasteurization of Goat Milk
The fundamental purpose of pasteurization is to ensure that milk is free from disease-
producing microorganisms, with the secondary effect of prolonging the keeping quality
of the product. However, pasteurization does not compensate for the failure to apply

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 recommended sanitary practices in the production of milk and should not be regarded
as the cure-all for poor sanitary practices in the handling and care of milk.
Slaughtering
The recommended ages for slaughtering goats are between eight months up to
two years, although there are some major goat producers, which subscribe to the idea
that to experience the optimum quality of chevon from either imported crossbreed or
upgraded native, slaughtering goats starting from 9 to 10 months and up to 18 months
only is most appropriate and highly recommended age. Going beyond the said age of
goat, chevon odor (goaty smell) will be more noticeable. At 9 to 10 months, crossbreed
goat can have a weight of at least 30 kilos already. Also, it is recommended that before
slaughtering the goat, it should not allow the breeding bucks to mix with the females
and the castrated male to avoid the goaty smell in the carcass. Fast the goats first, give
plenty of water for 18-24 hours, and allow them to relax. This is for ease in evisceration
and cleaning of entrails. Moreover, expected results in goat meat are longer shelf life
and low shrinkage. Prior to the actual start of slaughtering, wash off dirt from the goat’s
body to prevent contamination of the carcass. During slaughter, do not allow the hair to
rub against the flesh because it imparts objectionable odor and flavor to the meat.

CHAPTER III
FINANCIAL FEASIBILITY
Goat raising is highly profitable. With minimal initial capital investment of P 67,250 for
25-doe level; P 174,500 for 50-doe level; or P 349,000 for 100-doe-level, positive net income
and retum-on-investment (ROI) are realized, even as early as the first year. The ROI for 5
years is 67% from a 25-doe level operation under semi-confinement scheme and 60% from
50- and 100-doe level operations under pure confinement system. Payback period is 2 years.
The projected income statement by type of operation is plotted below.

25-Doe 50-Doe 100-Doe

5-Year Range (in Pesos) Level Level Level

Total expenses 373,262 762,002 1,524,004

Total income (sale of

stocks + stock inventory value 623,750 1,219,500 2,439.000

Net income 250,000 457,498 914,996

ROI (%) 67 60 60

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START UP REQUIREMENTS
Legal Php 100,000.00
Signs 50,000.00
Insurance 150,000.00
Expensed Equipment 3,200,000.00
Goat house 2,000,000.00
Total Start Up Expenses 5,500,000.00
Goat Heads 1,000,000.00
Start up Inventory 1,500,000.00
Long term assets 2,000,000.00
Total Assets 4,500,000.00
Total Funding Required 10,000,000.00
Total Liabilities
Capital
Planned Investment
Police Movement Subsidiary 10,000,000.00
Total Planned Investment 10,000,000.00

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Goat Farming Cost and Profit

Total number of female goats 300 heads

Total number of male goats 250 heads
Weight of each female goat 25 kgs
Weight of each male goat 35 kgs
Total weight of all goats 16250 kgs
Price of live goat per kg 300 PHP
Price of total animal cost 4,875,000.00 PHP
Goat Farming Cost and Profit -Cost of Feed/Fodder
Feed consume by goat kids per kg
weight gain 3 kgs
Number of goat kids born 100 heads
Weight target of baby goats in 4 months
period 16 kgs

Total feed consumed for all kids to

achieve target weight in 4 months 4800 kgs
Feed cost per kg 150 PHP
Total Feed cost 720,000.00 PHP
Feed Transport cost/month 50,000.00 PHP
Total Cost 770,000.00

Total consume by each adult/day 0.2 kg

Total feed consume by all 100 adult
goats 20 kgs

Total feed consume the day in a year 7200 kgs

Total cost of adult goat feeds 1,080,000.00 PHP

Total feed cost for all goats' FEEDS 1,850,000.00 PHP

Goat Farming Cost and Profit - Other Costs

Shed space required 3,000.00 square meters

Average cost per sm 200.00 PHP
Total Shelter Cost 600,000.00 PHP
Vaccination and any other medical costs 50,000.00 PHP
Labor cost per month 60,000.00 PHP
Labor cost for 6 months 360,000.00 PHP
To Grow 1 acre green fodder 500,000.00 PHP
Total Cost of Expenses 1,010,000.00 PHP

Goat Farming Cost and Profit Returns;

Number of goat kids/batch 400 heads
Each baby goat weight in 4 months 16 kgs
Total weight gain 6400 kgs
Average live goat meat cost 300 php/kg
Total Returns (Gross Profit) 1,920,000.00 php
Running cost per batch 1,000,000.00 php
Total Profit in 4 months 920,000.00 php
Total Profit in 1 year 2,760,000.00 Php

Goat Farming Cost and Profit - Return on Investment

Total Fixed assets 4,500,000.00 php
Total Fund Subsidiary 10,000,000.00 php
Number of Years Upon ROI 4 years

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