No Kidding: U.S. Goat Imports Rising and Australia's Winning

(Bloomberg) -- Growing demand for goat meat in the U.S. from ethnic minority groups and foodies has made an unlikely export superstar for Australian farmers, with exports surging to a record.

The value of goat meat shipments from Australia, the world's biggest exporter, jumped 38 percent to A$277 million ($218 million) last year, with the U.S. by far the biggest customer, according to data provided by Meat & Livestock Australia. Overseas sales have more than quadrupled in a decade.

Goats weren't always good news for Australian farmers. With little domestic demand for their meat, for years goats were shot or poisoned as vermin as they competed with more-favored sheep. Their status worsened after the 1970s, when a goat wool boom evaporated and many goats escaped to wander and multiply in Australia's sparsely populated Outback.

Fewer Restrictions

That changed in the past couple of decades as demand from Muslims and Hispanics in the U.S. emerged. Goat meat is favored by many minorities because it has few, if any, religious restrictions. With growing incomes in those populations and Americans becoming increasingly adventurous in their eating habits, that has sent consumption soaring, with production in the U.S. failing to meet demand.

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“There is a higher population of Muslim and Hispanic people in the U.S. and they are the primary customers” of goat meat, said Julie Petty, who manages goat information at Meat & Livestock Australia, a Sydney-based trade group. “The feedback we have gotten from some of the high-end chefs and customers in the U.S. is that the Australian product is better and they prefer it.”

Aussie Domination

The U.S. has a very small goat herd, according to Petty, and Australia exports most of its goats because the meat isn't widely consumed locally. Exports accounted for 90 percent of production last year, up from 88 percent a year earlier, according to MLA data. Australia dominates the U.S. import market, accounting for almost 99 percent of sales there last year.

“Goat meat has long been enjoyed in many cultures, including in populations around the Mediterranean, in part because of the varied diet of goats that gives their meat its unique flavor,” said Libby Travers, a Sydney-based food writer. “In North America, it's able to tap the popularity of meat that's completely grass-fed and ‘free range,' and meets many people's ethical choices.”

Prices Triple

Australian goat meat prices surged last year to over A$6 a kilogram, more than three times higher than in 2014. Prices have corrected to about A$5.60 and may stabilize at this level, Petty said. The higher prices coupled with low maintenance costs are luring Australian farmers to add goats to their herds.

“As the price has increased, we have got more and more inquiries coming through from producers who can see the money signs flashing,” she said over the phone. While goats don't require the same maintenance as sheep as they don't need shearing or other treatments, farmers do need to make fences higher as they are extremely nimble and will try to escape, she said.

Slaughter numbers of goats increased about 7 percent last year to 2.07 million, and exports gained 6 percent to 28.4 million tons. Those numbers will continue to increase if farmers don't over-harvest, according to Petty.

In the week to February 23, there were 40,428 goats slaughtered on Australia's east coast, up 12 percent from a week earlier, according to MLA data released on Tuesday.

--With assistance from Jason Gale

To contact the reporter on this story: Rebecca Keenan in Perth at rkeenan5@bloomberg.net.

To contact the editors responsible for this story: Phoebe Sedgman at psedgman2@bloomberg.net, Brian Bremner at bbremner@bloomberg.net, Andrew Hobbs, Jason Gale

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