pastured eggs, full employment and illegal rainwater

I got a call from a fellow that I met a few years ago, at some farmers symposium or other.   I  know that it was a few years ago, because I stopped going to the majority of the events because they really didn't offer anything useful for me.  Every now and then I hear about a session that I'm interested in, like the one on small grains in Washington State that Michelle attended recently, but that's the exception. 

Catching rainwater illegal:  who knew?
So I get this call, and I end up spending 90 minutes talking to him, and he's pretty funny, and has run a farm for a while, and we commiserated on various government issues.  Like how he had to get a permit to catch rainwater off his roof, for instance.   Turns out that he was one of the guys that was involved in drafting the regulations to allow it.  Did you know you can go to jail for collecting rainwater? 

100 dozen eggs a week?
What he's calling me about is that his pastured egg supplier had gone out of business, or was selling the eggs somewhere else, it wasn't really clear, but he needed some eggs.  In fact, he'd like 100 dozen eggs a week, and would I be interested? 

Full employment
One of the things that I take pretty seriously is providing as close to a full-time job as I can to my farmhands, and I'm always looking  for something that I can give them that both produces revenue for the farm and keeps them gainfully occupied.  Since we sell a lot of animals retail, chickens and piglets, I have to have someone at the farm all day; for those days when we don't do much in the way of sales, it's nice to have them doing something.  The alternative is to send them home, which, basically, cuts their pay.  A better solution is to keep an eye out for tasks like this one might be. 

The egg scheme
He tells me he wants 100 dozen eggs, and wants a mix of colors.  He'd like about 10-15% of them to be green or white or dark brown, so that they can be visually different for the customers who buy them.  If they were all uniform brown eggs they'd look like costco, and he wants that as a marketing point.  He'd also like to have them packaged in his packaging and under his brand name.  I'm ok with that.  I'd like him to pick them up from the farm gate, and pay for the packaging; my end of the deal is to take care of the birds, collect, clean and package the eggs, and make sure they had access to forage and were in good condition.  With the basics ironed out, I sat down with my spreadsheet and started on what I would have to sell the eggs for per dozen to make it worth my while. 

How many hens? 
In my experience, chickens lay between 130 and 200 eggs per year per chicken.  They lay more in the spring or when they first start laying, and less in the winter.   You also can't count on 100% of the eggs to make it to market -- you'll need to produce a few more to allow for breakage and so on.

Green egg layers aren't as efficient as white or brown, and white egg layers, specifically white leghorns, are the best egg layers of all.  So if we add green egg layers we offset by the same number of white egg layers and average out the production.   

So to make 1200 eggs a week, we're going to need roughly 400 mature laying hens and those birds will produce about 1400 eggs a week on average, which gives us a basically 16 dozen extra eggs a week.  So far so good. 

To get 400 hens, I'd have to be safe and order about 10% extra (mis-sexed chicks, non-productive hens, random mortality), so I'd need to make an order for about 440 female chicks. 

How much do hens cost?
Ok.  Green egg layers cost more as chickens, white egg layers less, brown somewhere in the middle.  Figure an average cost of $2.50/chick, including shipping.  That works out to be $1100.00  Chickens convert food to meat at a rate between 2lbs and 4lbs of feed per pound of chicken.  A hen weighs about 4lbs when she starts to lay, so we'll need 4*4 or 16lbs of feed to bring the chicken from chick to point-of-lay.  Chick starter is more expensive than layer feed, and feed in general is very expensive.  So lets figure 440 chicks * 16  lbs of feed, or 7040lbs.  That's 3.5 tons.  

"chicken feed" used to mean "cheap"
Right now commercial hog feed is $540 a ton.  Chicken starter is $800 a ton.  Chicken feed is $480 a ton.  We'll need 1 ton of chicken starter and 2 tons of chicken feed to bring these birds to point-of-lay.  That's $1760.

Large scale
to keep 440 chicks happy and warm you'll need three brooders, you'll need lightbulbs, and you'll need floor space.  You'll also need feeders and waterers, and for this many chicks you'll need bedding and some labor as well.   If you use my brooders and you use large-capacity feeders the labor is actually pretty small.  You make sure that they have water, that the feeders are full, scan the flocks to see if any died, and that's about it.  A little shed or horse stall works, or pretty much anyplace that doesn't have a draft.  A tool shed.    I'm going to ignore the costs for this equipment because I've already got it all.    If you were to buy it, you'd need 3 5 gallon waterers, 3 brooders per the plans above, and probably 12 chick plastic chick feeders, graduating to 3 big rubber bowls as they start eating more.
Think $500 and you wouldn't be too far off.    figure 1 hour of labor a day, and don't  forget you have to pay yourself.  I figure labor at $15/hour -- who wants to work for minimum wage? 

Time
It takes between 4 and 5 months for a chick to start laying.  5 months * 30 days = 150 days.  at 1 hour a day that's 150 hours, and at $15 an hour that's a labor cost of $2250. 

And then you get your first egg
So the costs up to this point, before you get a single egg you can resell, are $5,610. 

Now what does it cost you to operate? 

Figure 400 or so chickens will eat 1.5 tons of feed, at a cost of $720.  Labor costs go up -- collecting, sorting and packaging 1200 eggs, moving the hens to new forage, and keeping fences up and predators away -- figure 4 hours of work a day, or $1800 a month.    Hens don't care about weekends.   We'll need a refrigerator so that we can keep all these eggs cool - or two, actually.  There will be some time spent bookeeping -- we're selling them, so they'll be invoices and so on. 

Figure we'll get two years of laying out of our hens, so we need to divide the cost of bringing them to point of lay by 24, giving us $233 monthly cost, ignoring the cost of money itself. 

So our breakeven point is the cost of operation ($720 feed + $1800 labor) plus the cost of raising the hens ($233), or a total of $2753.00 per month. 

During that month we produce 400 dozen eggs, so if we divide our operating cost by 400, we get a cost of $6.88 a dozen at the farm gate.    Lets say we want to make a 10% profit.  That would put us at $7.50/dozen in round figures. 

That's HORRENDOUSLY EXPENSIVE
Actually, it's not that bad.  First, these are truly pastured eggs.  The farm worker/farmer is paid a living wage that is competitive with other employers in the area = we can keep good people, and people who care about the animals and take their job seriously.    We require no grants or other direct subsidies, and the impact on the land is pretty minimal with proper rotation of the chickens. 

We could save money by doing what most major retailers do -- pay people the minimum wage.  That would cut the labor costs substantially.  Or we could keep the birds in big barns and never move them onto new pastures -- lots less labor, less chance of predators.  That's what most of the eggs you see in stores do- "cage free" almost always means "never sees the outdoors, ever".

That's what fair food costs, folks.   Would you pay that per dozen?