We have all heard about what has been going on with the global supply chain, shipping times and labor shortages. Unsurprisingly these things impact feed costs, leading to significant increases over the last two years. This led Danielle and I to take another look at our egg operation to try and find out the true costs.
Since I’m a big fan of transparency I’m going to tell you all what we found out.
- The cheapest way we can raise laying hens is to purchase them from a large hatchery at 5-6 months old when they are just about ready to lay. This places the labor and feed costs upon the pullet supplier up to that point.
- We raise Comets (a cross between Rhode Island Reds and White Leghorns) because they have the highest potential egg laying numbers.
- The egg yield per bird stays high for roughly two years, then decreases significantly. However, the hens continue to eat the same amount of feed despite producing significantly fewer eggs.
- Chickens will eat between 1/4lb-1/2lb of a complete feed ration per day.
Danielle and I have been wanting to switch to an organic feed for quite some time, but have been hesitating due to the impact it will have on our egg price. We have a loyal following of customers who know us for our $5/dozen price and deep orange yolk color (from marigold extract in the feed) and we don’t want to lose them. Two years ago $5/doz was an OK price for eggs from hens fed a standard feed. With increasing feed prices, we are at the point where a price increase is necessary, so we decided that this year we would switch to organic. Since we have to raise prices, we might as well get something good out of it!
And now begins our truly deep dive in the numbers behind an egg laying operation.
This section could be entitled “Lessons on Why Not to Farm” but we are going to call it “The Profit of an Egg Laying Operation Over 2 Years”.
We previously fed out Poulin egg layer pellets and have made the switch to Green Mountain Organic Egg Layer pellets which are currently $27.10 per 50lb bag.
Inputs for 2 Years:
||Number (wks, bales, days, etc)
|| $ 9.00
|| $ 900.00
|| $ 27.10
|| $ 14,850.80
|Scratch Feed (bag/wk)
|| $ 26.00
|| $ 1,378.00
|Bedding (2 bales/wk)
|| $ 6.00
|| $ 1,260.00
|Oyster Shells Bags
|| $ 17.00
|| $ 68.00
|Nest Box Straw (bales for )
|| $ 10.00
|| $ 520.00
|Egg Cartons + Stickers
|| $ 0.70
|| $ 2,858.80
|| $ 6.00
|| $ 4,380.00
|| $ 12.00
|| $ 624.00
|| $ 0.20
|| $ 146.00
|Odds & Ends
|| $ 50.00
|| $ 100.00
|| $ 27,085.60
This table presents a neat and tidy picture of the input costs to make it easier to follow, but calculating these inputs is far more complicated, for example feed costs are done by multiplying the expected feed intake per bird per day by the number of birds, then multiply that by the number days in two years, and then dividing by the pounds of feed in a bag to get the number of bags. Then you multiply the number of bags by the price, then you have the price for feed for two years. Electricity was a tough number to calculate so we left it very low, but it includes things like multiple lights during winter and shoulder seasons, and heated water bases etc.. Odds and Ends includes things like equipment replacement, bulbs, diatomaceous earth, and any health treatments, etc, etc…
Outputs: the amazing egg machines!
Best case scenario, Comets have been known to lay 6 eggs per week. Unfortunately, this is not for a full 2 year stretch and my thoughts are that it is not in Maine winters either. To calculate the outputs we chose 5 eggs per week (which still may be high but we will be keeping track of these lady’s over the years). When we buy the birds they are not yet laying, so we removed 3 weeks from the beginning of our count. They will also go through a soft molt or two before the end of 2 years when they will not lay eggs while they build back their feathers, so we took another 2 weeks off the count. We didn’t know what to do about the time when the hens will lay pullet eggs (smaller than normal eggs), so we just counted them as regular eggs for the purposes of this budget but will most likely discount them until the eggs size up to large.
That’s 5 eggs X 100 birds X 98 weeks = 49,000 eggs over 2 years (WAY TO GO LADIES!). 49,000 eggs / 12 per carton = 4,084 dozen
Now, The Grand Finale:
Cost inputs over 2 years = $27,085.60 (did you think it was going to be so high? We didn’t) divided by the number of dozens we will have to sell 4,084 dozen eggs = $6.63 per dozen just to cover our inputs.
I bet you’re asking yourself what about Overhead? What about Profit? What if each chicken eats more than 3/8# of feed in the winter?!
Well, here’s the deal… We do keep farm insurance that we have to pay for and there are a bunch of other factors that we haven’t put in the budget like pest management, chicken mortality, inevitable feed price increases, egg delivery time/gas, and the time it took me to write this magnum opus on chicken budgeting, etc. But we also do have the bird at the end of the two years. The story with that: We have found that butchering and selling stew hens is basically a wash: The amount of money paid for a stew hen is just about enough to cover the butcher fee, gas and time to bring to harvest, and freezer cost, etc. We could sell them to other chicken keepers that don’t care about production, but that is for sure a crap-shoot as the price is low and buying is sporadic at best, and you are keeping hens alive that aren’t laying well so you are losing money every day they don’t go in the freezer. If we can, we will choose to slaughter them for stew-hens (because I’m pretty sure the soup they make is an unrecognized SUPERFOOD. Move over kale).
So what’s the answer????? How much do we sell the eggs for given all that we now know?
$7 / Dozen my loyal readers….
If the birds can manage to lay every bit of the 4,084 dozen, that will give us some wiggle room for price increases and mortality, etc. (the stuff mentioned above) and a little bit to cover some of the farm overhead. If input costs and egg yield stay the same (which is unlikely) we are looking at $7/dz x 4,084 dozens = $28,588 in gross profit, but now we have to subtract the input costs, $28,588 – $27,085.60 = $1,502.40 of net profit. This is realized after 2yrs of successful work. After these 2 years we will have a roughly 5% net profit margin, which we still haven’t subtracted overhead costs from…
If that day truly comes, and I am sitting here in the fall of 2023 with $1,502.40 of your gracious money burning a hole in my pocket…. I know what I’m going to do:
I’m going to use $900 to pay for 100 new birds (think they will cost the same?), then take Danielle, the kids and my mom to Maine Beer Co. or Flight Deck and buy 4 pizza’s, 2 salads and a few beers. Then, I’ll put the remainder in the kids’ college funds. So, in conclusion:
To those that won’t be able to buy from us anymore (or as frequently)… it’s OK, we have to make decisions like that too! We appreciate your past business and any business we do get in the future, whether it be on eggs or something else.
For those that can make the jump with us to $7/dz we appreciate you too! And you should know that it’s not just keeping small farming and local economies afloat. It’s also helping keep pesticides out of the soils for healthier food and water systems.
The Green Mountain Feed people put it pretty well on their feed bag:
“We are proud to be a part of the organic production movement. Any system that helps to eliminate the use of herbicides, pesticides, and artificial hormones from the food chain is good for us and our children. By purchasing this product, you are helping to support a system of agriculture that helps preserve our soil and water supplies”.
Editor’s Note: In this instance the editors are a couple of the folks at BTLT. Some of us get Senza Scarpe’s weekly sales email. They are almost always entertaining, and sometimes extremely educational. This is one of those. After reading it we asked Darius and Danielle if they would allow to use their sales email as a blog post. Food producers are amazing individuals (or families) and we want everyone to understand just how much they do for all of us. So, thank you Danielle, Darius, Mama Salko, Po, Geo and every one of you farmers and food producers who are feeding our community!
Second Note: For those of you who read the original email from Darius and are thinking, “wait, it was different last time and Darius is funnier than this”, we asked to make some edits and then checked them with Darius and Danielle.