Ready for 2014

In our all-day year-end review Cherie and I carefully reviewed all the farm’s 2013 operations.  Last year was the first year we diligently kept the data in a way that enables us to evaluate each component of the farm.  The results were interesting.

I’ve been planning to significantly expand our egg production.  We have more demand than we can meet, so my plan to was to add an “eggmobile” (and a lot more hens) that would generate more eggs and help us with maintaining soil fertility.  But we lost money on our egg sales last year.  In fact, we would have had to charge over $10/dozen to break even.  Even excluding the cost of the new coops and based only on the cost of feed, we’d need to charge over $6.50/dozen.  We’re charging $4/dozen now and I don’t think our market will bear much more than that.  So we scrapped all plans to increase egg production.

I have a friend who raises his hens the same way we do ours and he uses the same feed.  He says $4/dozen was profitable for him in 2012.  I’m not sure what their results were in 2013.  We gave away a lot of eggs last  year, and our number doesn’t account for what we ate ourselves, but even with those things factored in I’m sure we were still selling at a loss.  Part of our problem may be that we have aging hens and we have never culled the old ones out.  We try to add young hens periodically and overall our flock is young.  But we’ve always let the old layers just live out their lives.  That doesn’t help the bottom line.

The pigs were a success, so we’re planning to expand that part of what we do.  Goats were a disappointment.  I think I overestimated the capacity of our pastures.  We had more revenue (and fewer expenses) when the herd was smaller.  So we’re going to slowly reduce the size of our herd.  We’ll have to find some other way to generate the revenue we were expecting from the goats.  We’re planning to offer goat meat this year, for the first time.  Previously we’ve only sold them live or at the livestock auctions.  I’m not expecting a lot of demand, but we’ll see.

On the vegetable side the results were just OK.  If labor was included in our analysis we’d have been deeply in the red.   But as a farmer/friend told me recently, “A farmer’s labor isn’t worth anything.”  By that he means we don’t count it when adding up expenses.  We had impressive revenue growth with the vegetables though (notwithstanding a brutal summer season) and I’m optimistic about 2014.

We’re going to be making some significant changes to how we market our vegetables, but they haven’t been announced to our customers yet, so I’ll hold off blogging about them for now.

Overall Cherie did an excellent job of managing the household.  The farm broke even, which isn’t easy for farms to do.  If this experiment is going to work, we need to move the numbers into the black.  Hopefully that will happen this year.

Ready for 2014!

16 comments on “Ready for 2014

  1. Bill, you are stuck in the dilemma of all homesteaders that are trying to make a go of a revenue producing small operation. It’s really difficult to compete against government compensated big Ag farms. Unfortunately, society has been thinking that the cheap food produced by oil based cheap fuel can last forever. Some day local operations like yours will be necessary to feed the population in my humble opinion. In the mean time it’s a big struggle to survive and make a profit.

    I applaud your efforts and indeed good record keeping is part of the continuing health of your business. Good luck with your efforts in 2014. May God bless every plant and animal that comes from the touch of your hands. May God give you wisdom in your decisions and increase yields beyond your expectations.

    Like

  2. A principle sin/crime/flaw/disappointment/shame/painintheass of postmodern capitalism is the fact that growing real food is unprofitable. It is an outrage.

    But I dote on all small farms and real food producers nonetheless. May you make at least $100 in 2014, Bill.

    Like

    • Bill says:

      Thanks Will. And may your farm generate all that you need, with a little left over.

      We had an agenda for our review. My wife handled all the bookkeeping this year, so she gave a “report” on the financial side of things. She started with the household expenses and it was favorable. We’re now living comfortably and happily on less than 1/3 of what we were spending a couple of years ago. Then she did the farm report, showing that we basically broke even. (So that our household expenses were paid from savings and from our meager off-farm income.) “So you’re telling me that if instead of all that work I had just stayed inside reading books all year we’d still have the same amount of money?” I asked. She said something like, “Yes, I guess so.”

      Then we went on to our planning for how to do it all again this year.

      Like

  3. El Guapo says:

    Now I’m curious as to the differences in your and your neighbor’s hen handling/egg production…

    Like

    • Bill says:

      My guess is that his egg business wasn’t as profitable this year as last. If he made money this year (or lost less than us) it’s likely because he was more careful to cull out the old layers. Another thing contributing to our poor year with eggs was that we gave a lot of them to our CSA members when we were short on vegetables.

      Like

  4. df says:

    We haven’t bothered to do the sums on our tiny little operation, as we’re still just experimenting in a big way, and without any real system. I’d like to start getting a better handle on what and ‘how’ we’re doing, though I expect we’d find results similar to yours in the long run. As you say, you have to do this because you believe in it and want to; at this point, there isn’t much to recommend it financially! 🙂

    Like

    • Bill says:

      We ran this farm for years without ever looking carefully at the numbers. We started out tiny too (and we still are by big-farm standards). But last year a friend/farmer who’s trying to make his farm support his large family, and trying to make an economic model that a young person would willingly buy into, told me that if we’re selling our food at less than the cost of producing it, then we’re paying people to eat it. More importantly, we’re hurting people like his family who are trying to make a living at it. So now we’re trying to be very deliberate and careful about what we do and how we price things. Evidently this year every time we sold a dozen eggs we might as well have declined their money and handed them $2.50.

      But as Andrew Nelson Lytle wrote, “A farm is not a place to grow wealthy. A farm is a place to grow corn.”

      I’d settle for just being able to pay our taxes and insurance.

      Like

  5. shoreacres says:

    Our situations are different because I’m selling a service, while you’re selling product(s). At least I can go out and beat the bushes for more hours if I need more income. But I’m getting too old for that. I don’t want to work more hours, but fewer. Just now, I don’t have a choice.

    But some of our problems are the same. Reducing overhead is important. Likewise, budgeting, and knowing the market. My mom always wanted me to increase my prices – radically. I kept trying to explain that if I priced myself out of the market, my profit would be even closer to zero. Ah, well.

    Anyway, here’s to a great 2014. We’ll keep praying you get good weather and egg-laying fools for chickens!

    Like

    • Bill says:

      The only other organic grower in our area charges much higher prices than us. In fact, he buys a lot of veggies from us (at our full retail price), then marks them up and resells them. He’s constantly telling me that we need to raise our prices. Maybe he’s right, but we also have to take into account what people can reasonably afford to pay (or, better said, what they’re willing to pay in the era of cheap food). We probably do need to raise our prices but, to your point, we have to take into account what the market will bear. In our case if we can’t make a living selling the food we grow (because folks won’t pay what it costs us to grow it) then we’ll just be homesteaders, hoping we can somehow come up with the legal tender required to pay our property taxes every year.

      Or maybe you’ll see us on TV someday, surrounded by Feds, defiantly holed up in our “compound.” 🙂

      Like

      • shoreacres says:

        I was laughing hard enough at your comment when I clicked onto a new page to find the proper text for Joyce Kilmer’s poem about trees. Don’t tell me Google isn’t watching! I laughed even harder when not two minutes after reading your comment, I got THIS for a pop-up ad!

        Like

  6. Jeff says:

    The biggest problem with eggs, I think, is that they have always been a “loss-leader” in the grocery store. There is no rational reason why eggs cost around $3 a dozen in the store. People are used to this price, not knowing the reason why, and they expect your eggs to cost the same or a little bit more. So much for a “free market”.

    Like

    • Bill says:

      They’re even less than that in the grocery stores here. The industrial egg factories use economies of scale (and indifference to anything other than profits) to get their prices low. A debeaked white leghorn hen in a battery cage being kept under artificial light and fed the cheapest possible feed until her production slows and she is killed and turned into chicken soup–is a profitable unit of production, when stacked in rows and kept in a building with 10,000 other tortured birds, tended by workers unable to find employment anywhere else.

      Like

  7. Steve Carlic says:

    Good luck. I’m rooting for you. Just wondering … do you market any value-added products from your raw goods? Last year, for instance, I sold honey at $5 for 12 oz. I picked a boatload of black raspberries (free and abundant thanks to the damp spring) and made as much honey-blackberry jam as I could. Even after subtracting for containers and pectin, by selling it as honey jam I made about $10 per 12 oz of honey. And it sold itself as soon as folks learned that it had no processed sugar in it. Oddly, in New York, where I reside, you need a license for just about everything — but not jams or jellies. This year I be jammin’, jammin’ all summer long — if only to afford another hive or two!

    Like

    • Bill says:

      My wife makes amazing granola using our honey and it always sells out. I really like the jam idea. I have a friend who makes mead using wild blackberries.
      Right now it’s illegal to sell most things made at home on the farm, but we’re hoping to get that law repealed this year.
      I hope your hives are doing well. We’ve struggled the last few years. We’re down to one hive now and I’m worried about whether they’ll make it through the winter.

      Like

      • Steve says:

        Granola. Have to keep that in mind. The hives? I’m worried, too. They were very light going into the winter. I’ve been feeding them, but not sure it’ll be enough.

        Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s