How Profitable Is Swiss Goat Milk Production?

Goats may be appealing, but very few goat farmers can make money from them. Dairy goats become economically viable only when annual milk production reaches at least 100 tonnes, which equates to around 120 to 180 dairy goats, depending on yield.

In Switzerland as a whole, 90% of goat farmers keep fewer than 25 goats – and very few are economically motivated to do so. It is not currently known whether goat milk production is indeed profitable at all. The aim of this study was to perform an economic analysis of this farming sector and identify the success factors.

To this end, twelve farms were selected from among the 40 largest farms affiliated to the Swiss Goat Breeding Association (SZZV) which kept at least 50 dairy goats. The chosen farms had annual production volumes ranging from 35 to 240 tonnes, and most were in the upland area. The average herd size in the sample was 141 dairy goats. The valley and upland farms in the sample were diversified and engaged in other activities in addition to goat milk production. Only the three mountain farms were genuine specialists. The farms underwent a detailed full-cost analysis, having first submitted their accounts and provided additional information during an interview.

Successful farms save on concentrate and machinery

The larger farms in the sample spend significantly less time per goat than the average. They also farm more intensively with higher stocking rates and higher yields per goat. However, in addition to one large farm, the economically successful farms also include medium to small farms with more moderate milk yields of between 500 and 600 kg per goat and year. Accordingly, there is also no correlation between milk yield and work income.

Increased use of feed supplements tends to reduce income. For example, three of the four most profitable farms have only moderate supplementary feed costs. Similarly, farms with low or moderate machinery costs tend to have higher incomes.

Production costs almost double the milk price

The production costs calculation showed that no farm was able to cover their full costs. Production costs amounted to CHF 2.40 per kg of goat milk for an average milk price of CHF 1.28, corresponding to a cost recovery ratio of just 53%. In contrast, production costs correlated strongly with production volumes; the average cost recovery ratio was almost 80% when farms with a production volume of less than 100 tonnes were excluded. Profitable farms achieve high incomes per hectare of CHF 3,000 to 5,000. Furthermore, farms producing more than 100 tonnes of milk have significantly lower production costs and thus offer greater potential for profitable goat milk production.

Profitability comparable with other types of dairy production

From an economic perspective, goat milk production per se is no less profitable than cow or sheep milk production. However, the dairy goat farms in the study were run more intensively than comparable dairy cow or sheep farms. This resulted in higher concentrate costs and lower direct payments per livestock unit, which was offset by somewhat lower machinery costs.