The award-winning animal tested positive for a unapproved feed additive, as did a second goat entered by the Weinroth family of Sedalia.
The mother of the family told the Pueblo Chieftain that they first heard of their disqualification via a letter from the attorney general's office, which informed them that the drug had only been approved for swine and not goats.
The Winroths have argued that the animals' feed may have been tampered with and are planning to appeal the ruling.
Disqualification means that the family's two children - who entered the goats into the competitions - cannot collect their earnings from the sale of the animals.
The winning goat went for $5,500 (£3,400), while the second was sold for $1,300 (£822).
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