Saturday, May 9, 2009

Weird farm economics

I started farming to raise food for friends and family, but the land I purchased was near a highway -- very visible to 55,000 cars a day. I knew that there was a chance that I'd sell things, and had worked out a basic plan to sell dressed pastured poultry, even to the point of buying a professional plucker and teaching myself to process birds and practicing on roosters purchased at auction.

So now, three years later, I'm at a point where most of my 12 acres are used in one way or another, and I'm pretty much at the stocking capacity of my little farm. 60 pigs of various sizes, 450 chickens, 300 turkeys. I produce between 20 and 30 piglets a month, between 300 and 500 turkey poults a month, and roughly 200 chickens a month.

This month is the first month that the farm is operating at an operational profit. That is, my costs are less than my proceeds but I'm at a deficit if I figure in the money invested so far. When I was penciling out the basic plan for the farm I figured it would probably take 3 years to settle out; we're about on schedule there.

The biggest thing has been experimenting with products that are both easy for me to deal with, and support a price high enough to allow a decent profit margin; I'd start with a few animals, get some experience, and after a year or two decide whether to get bigger.

Pigs have turned out to be a favorite of mine. They're relatively easy to care for, they're interesting animals to have, and there's a ready market for the finished product, whole, half or in cuts. Plus if the world does end I know what I'm eating. The surprising thing is that one of the easiest ways to make money with pigs is just selling weaner pigs. You can get 2 litters a year from a good sow, 8-10 pigs each litter is possible, and they'll sell in this area for $100 each, yielding you between $800 and $1000 per litter. It takes about 1500 pounds of food to feed a sow for 6 months, at a cost of about $275. So every time you sell a litter you make $525 or so. I've heard pigs called "mortgage lifters" and I understand better what they meant by that.

So here's the weird part. If you can make $300-500 per year per sow, why not have a lot of sows? Like 500? Seems like a good way to make a lot of money, right?

Farming is a commodity business. It's very tempting to grow a whole bunch; when times are good, there's lots of money, and things are great. But then the inevitable downturn happens. Maybe they name a disease after your product ("swine flu", anyone?) or the surgeon general decides it's unhealthy, or there's a huge recession/depression, or whatever, and all of those animals are suddenly not an asset but a liability.

So I think I'm going to cap my production somewhere around the total that I'm producing now. I'll join the ranks of the "artisan" producers, quirky people who produce stuff the way they like it, and if people don't like it, well, might as well eat it yourself.

I think that where I'll expand is into the teaching part of this. I enjoy the process of teaching, and there's plenty of interest in "how to do it" topics like butchery, dressing poultry, and so on.

This is a bit contrary to the traditional "business" ethos that mandates that when you make a profit you do all you can to grow bigger. I feel that pull.


sheila said...

Sounds like a good plan. Not many can teach well and if you have the knack you should go for it. I know I would take a class on hog butchering if I lived closer. Also, I think teaching people how to further process (sausage making and smoking) would go over well.

I hope I'm not imposing, but I'd like to ask a few questions. I've been offered an older sow. What does the meat taste like? Tough, strong tasting, mushy? I've had different people tell me all of the above. Should the whole thing be ground into sausage? Kabob meat? I've only eaten pigs that were young and under 250 pounds. This sow is estimated to be over 600 lbs. Is there a lot of fat trim? I'd be taking it to be processed and they charge by the pound. Don't know if it's worth it if they are going to toss lots of fat. Mostly I'm interested in finding out the flavor/texture of an older pig. Oh, one more question. If the whole thing were made into sausage, how many pounds do you think I'd end up with?

Lot of questions. Any input would be most appreciated.

EJ said...

That's a lot of animals. How much land do you run them on? How do you deal with run off?

Bruce King said...

Compared to commercial farms where a single laying hen barn might contain 50,000 birds I'm tiny.
For runoff purposes I maintain a born about 12" high that forces water on the property to soak in per best practices for water quality. The land is basically flat and most of the manure is distributed around the property by the animals themselves. What cocentrated manure there is, like under the chicken and turkey roosts is composted and spread out on the grass.

That's an odd question though - do you work in some related field?

Anonymous said...

Don't work in "related field" unless you count farming...