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Thoughts on homesteading: selling eggs at a loss

In a recent Farm Update post I mentioned that we are currently selling eggs at a loss. Reader Jo asks, reasonably enough, “Why?” It does sound like an odd thing to do. Rather than give a short answer, I’ll try to identify all the different considerations that have led us to do this.

First, when I say that we are selling our eggs at a loss, I mean that the feed which we give to our laying flock costs us more than we would make if we sold all the eggs they lay at our current price. Earlier in the summer our hens were laying 30 eggs per day, or 2 1/2 dozen per day, or 17 1/2 dozen per week. If we sold them all, at $1 per dozen that would yield us $17.50. Meanwhile, the feed they eat now costs us about $35 per week, or about $2 per dozen eggs.

Also, those are theoretical eggs. Over the summer production has dropped to as low as 9 dozen per week, but has rebounded recently and is now around 14 dozen per week. Feed consumption varies day by day, but overall seems to be pretty steady. So at any given time we have been spending from $2.50 to $4 per dozen eggs to buy feed.

And last winter there was a stretch where the hens laid nothing at all. The cost of the feed that kept them alive then would need to be amortized over a year or so to give us a more accurate picture of what those eggs are costing us. But at least we know they are costing us even more.

So far this doesn’t sound too promising as a business proposition. But we need to keep in mind that it isn’t a business proposition, but just a snapshot of one aspect of our ongoing effort to learn by doing. We didn’t get here by sitting down and deciding to keep a certain number of hens that would eat a certain amount of feed in order to produce a certain number of eggs at a certain price to obtain a certain profit.

Three years ago when we moved here we inherited a chicken coop and a ragtag flock that produced the occasional egg. We fed and watered and sheltered those few, and by the next spring we were accustomed enough to having chickens free-ranging our yard that we decided to order ten laying hens along with the broilers we planned to raise in tractors. Our son Matthew, who has always been drawn to birds, took those chickens under his wing and learned the things that needed learning to get them organized as a laying flock.

It took nearly eight months, but sometime late in the year the new hens began to lay steadily and prolifically, and we had our first real supply of eggs. For awhile we had only enough for our own needs, with the occasional dozen to give to friends. Somehow that flock grew to about thirty hens (neither my records nor my memory tell me how; both last year and this we have had hens hatch their own chicks, but not in enough quantities to account for the growth), and very early this spring we were getting 30 or so eggs per day.

We decided to order an additional ten female chicks this spring, thinking that we need to keep a steady supply of new hens coming in to replace hens that eventually stop laying. Those will not be laying for another few months, but they are eating, and they are taking up room in the coop. In fact, as presently organized the coop is full and there aren’t enough laying boxes for when the new hens start laying; this will push us to think in more detail about what we need to do to organize the coop for maximum use, and whether we actually want to do that.

The upshot is that right now our laying flock is an awkward in-between size, too large if all we want to do is supply our own needs, too small to produce enough eggs to supply any sort of commercial customer base. But that’s the size it is right now, and it isn’t much of a headache to keep it there for awhile. Which gives us an opportunity to experiment with various interesting ways to deal with an excess supply of eggs.

The first thing we did was decide who we wanted to supply with weekly free eggs; that list ended up as our elderly next-door neighbor (one dozen), Jerome Lange (two to three dozen, depending), and one of our pastors (1 1/2 dozen). Next, we asked a couple of nearby neighbors if they wanted to buy any from us, and they both did—but at what price? Well, the going price for eggs around here has been $1 for roughly forever, so that is what we told them. That accounted for another three dozen. And one of those neighbors told some Amish neighbors that we had eggs for sale, so a couple stopped by to ask if they could have some, and that accounted for another three dozen. Which is about all we could supply, given that we like to eat a lot of eggs ourselves.

So: we supply neighbors with roughly ten dozen eggs per week, six of which we are paid $1 for. We keep between four and six dozen for ourselves. We collect the eggs into used egg cartons and keep them in the basement, and we have a weekly schedule where either one of the kids takes the eggs to a neighbor or the neighbor stops by.

From a strictly business point of view, this is a disaster. We are spending $35 a week, plus the labor we invest, and we are making $6 per week, i.e. it is costing us $29 per week to keep this operation going. But what else are we getting for our $29?

  • Four to six dozen eggs.

  • We are learning to keep chickens at a ‘real’ scale, i.e. forty hens rather than just a couple.

  • We are learning to produce at a ‘real’ scale, i.e. we have people depending on us to supply them with eggs regularly, and we depend on them ourselves.

  • We are learning a little bit about how to manage direct sales to neighbors (not quite the same as wholesaling or direct sales to non-neighbors).

  • We are establishing stronger relationships with some of our neighbors.

  • We are serving our neighbors, the paying ones with a good inexpensive product and the others with a loving gift.

  • We can base our decision as to how to proceed on our own practical experience, rather than speculation or someone else’s advice.

On that last point, here are some of the options before us:

  • We could continue on as we are doing.

  • We could raise our costs to something approaching what it costs us to produce a dozen eggs, say $3.50.

  • We could raise the cost further, to pay us something for our time and trouble, say $5.

  • We could scale back our flock to produce just enough eggs for ourselves, which would be costing us between $2 and $4 per dozen (or more) depending on the time of year.

  • We could scale it slightly larger, so that we could give eggs to friends that would be costing us $2 -$4 per dozen (or more).

  • We could try to reduce our costs by raising some or all of our own chicken feed.

Here’s what we think of those options at the moment:

  • Continuing on is not a good idea in the long term—the benefits, especially the ones that involve learning, will diminish with time—but there’s nothing urgent about changing things.

  • We can’t ask our neighbors to pay $3.50 for a dozen eggs, especially when they are selling for just over a dollar at the grocery store. We could conceivably ask non-neighbors to pay that, given that they are not industrially produced, but at $3.50 we only break even and wouldn’t be much interested in giving a product at cost to people we don’t know.

  • We certainly can’t ask our neighbors to pay $5.00, and I’m not sure I could bring myself to ask that much from anyone else, since it would require me to persuade them that our eggs are worth four times as much as industrially produced eggs, something I’m not convinced of myself.

  • We could very well scale back our flock to supply only our own needs, although it might also require that we cut back on our own egg consumption, given how much the eggs are costing us.

  • We’d like to always produce a surplus of whatever we raise, so as to be able to give some of it away. But this works better when production cost is mostly labor, as with vegetables, rather than w
    hen the cost is mostly inputs, as with eggs.

  • This is a path we hope to follow in nearly every area of homesteading, namely reducing input costs to zero by producing your own inputs in a sustainable manner.

As tediously detailed as this post is, it only covers some of the concerns that go into deciding about eggs. Other concerns will be raised when I talk about how we are deciding about meat in a post soon to come. And still others will be raised when I talk at some point about the unavoidable need to produce cash income.

Church franchises

Andrew Park hits one out of the park with a great article in Slate magazine, The Chick-fil-A Church. Please read the whole thing, but here are some excerpts:

Most Sunday mornings at Buckhead Church in downtown Atlanta, one person is conspicuously absent: the senior pastor, Andy Stanley. A nationally known evangelist, Stanley is usually 20 minutes away at North Point Community Church, the suburban megachurch he has led for 13 years. To the 6,000 or so faithful at Buckhead, he appears only on video, his digital image projected in front of the congregation in life-sized 3-D. The preacher is a hologram. […]

Six thousand people watching a sermon via video.

The Leadership Network, a Christian nonprofit that follows these multisite churches, says there will be 30,000 of them within a few years. Already, the most ambitious pastors are predicting that, thanks to video, they’ll have branded outlets nationwide and more than 100,000 followers—twice as large as the country’s biggest megachurch today. Gigachurches are the way that next-generation celebrity evangelists are building their empires. […]

Branded outlets. Gigachurches.

In a blog post, one of Stanley’s lieutenants compared the job of running a video venue to operating a franchise of another Christian-led business: Chick-fil-A. “Just like that Chick-fil-A owner/operator, I’m here in Nashville to open up our franchise and run it right,” wrote Eddie Johnson. “I believe in my company and what they are trying to ‘sell.’ ” … He stands by his analogy. Most residents of Nashville, Tenn.—he estimates around 71 percent—don’t attend church regularly. If it takes a name-brand preacher to put butts in seats, so be it. […]

Whatever it takes to fill the seats.

But church-planting, as it’s known, can be arduous and time-consuming, and there’s no guarantee it will reproduce the home church’s success, especially without the same charismatic leader at the top. With video, you just need seats and a screen to replicate the original. While only a handful of churches can afford Buckhead’s $250,000 high-def system, it costs relatively little to project a DVD of the home church’s sermon from last week. Or churchgoers can head to the movie theater: National CineMedia rents multiplex screens that otherwise would be dark on Sunday mornings to churches. […]

Arduous and time-consuming? Forget that.

This spring, Saddleback opened the first three of 10 planned video venues in and around its Orange County, Calif., home. “We’re not reaching out because we need to be bigger, we’re reaching out because more people need Jesus,” the church’s Web site says. […]

More people need Jesus? Or more people want Rick Warren?

And my absolute favorite observation:

And for Christians looking to create community on a more intimate level, video venues do present an alternative to the suburban megaflock. While some people find it strange at first to worship in front of a big screen, they frequently come to view it as no different than attending a service that is totally live, supporters say.

I’d view it as no different, too.

Folk economics: how much is it worth?

A Mennonite family we know had to take one of their children to the hospital recently. He had stepped on a wire (barefoot, I assume, since that is how Mennonites spend the warm months), and his foot had become badly infected. A week later I asked how he was doing, and was told that the doctors still hadn’t figured out what was causing the infection. My heart sank at that; last year we spent three days at the hospital with newborn Peter and incurred $13,000 in costs, only to hear that they were unable to figure out what was wrong with him but that whatever it was he seemed to be over it. The Mennonite boy is home now, after twelve days in the hospital; they never figured out what was wrong, but he is doing better now. I have no idea what that episode will cost the family, which on principle does not carry insurance.

If anyone ever develops an agrarian economics, it will be either Wendell Berry or someone who builds on the important foundational work he continues to do. His latest essay on Faustian economics is now available to read at the Harper’s website, and I recommend it highly. One thing he mentions is how in today’s predatory economy the so-called free market is only free for some:

Some of us would-be humans have thought too that we should not be free at anybody else’s expense. And yet in the phrase “free market,” the word “free” has come to mean unlimited economic power for some, with the necessary consequence of economic powerlessness for others.

Several years ago, after I had spoken at a meeting, two earnest and obviously troubled young veterinarians approached me with a question: How could they practice veterinary medicine without serious economic damage to the farmers who were their clients? Underlying their question was the fact that for a long time veterinary help for a sheep or a pig has been likely to cost more than the animal is worth.

And even if the cost is less, it may be a matter of throwing good money after bad, preserving an animal which will never thrive. In his writings on raising meat animals, Gene Logsdon suggests the most prudent course is usually not to intervene at all. He mentions a rancher who simply put his animals out to pasture in the spring and rounded them up in the fall, figuring that any that were lost over the summer were being culled by nature.

I had to answer that, in my opinion, so long as their practice relied heavily on selling patented drugs, they had no choice, since the market for medicinal drugs was entirely controlled by the drug companies, whereas most farmers had no control at all over the market for agricultural products.

My questioners were asking in effect if a predatory economy can have a beneficent result. The answer too often is No. And that is because there is an absolute discontinuity between the economy of the seller of medicines and the economy of the buyer, as there is in the health industry as a whole. The drug industry is interested in the survival of patients, we have to suppose, because surviving patients will continue to consume drugs.

I would only disagree with the final sentence. I do not think that the drug industry is interested at all in the survival of its patients; if it could find a way to make good money from drugs that killed people or animals, it would do that as well. What the medical industry is interested in is convincing potential customers that the work done by its products and procedures is vital, whatever that happens to be. During our three days in the hospital with Peter there was never a single question raised, by us or the practitioners, about whether a particular procedure was needed. In fact, one particular procedure was clearly not needed, as a nurse happened to say when the doctor who ordered it was out of the room; but it was performed anyway, and charged for afterwards.

Berry contrasts this with an example of what he calls community economics:

Now let us consider a contrary example. Recently, at another meeting, I talked for some time with an elderly, and some would say an old-fashioned, farmer from Nebraska. Unable to farm any longer himself, he had rented his land to a younger farmer on the basis of what he called “crop share” instead of a price paid or owed in advance. Thus, as the old farmer said of his renter, “If he has a good year, I have a good year. If he has a bad year, I have a bad one.”

This is what I would call community economics. It is a sharing of fate. It assures an economic continuity and a common interest between the two partners to the trade. This is as far as possible from the economy in which the young veterinarians were caught, in which the powerful are limitlessly “free” to trade, to the disadvantage, and ultimately the ruin, of the powerless.

In our own situation, the members of the medical establishment were the powerful and we were the powerless. Can we imagine an alternative scenario where both of us shared a common interest and a common fate? Say, paying for treatments of conditions identified (if the patient elects to take them), but not for the identification process itself?

Farm update

  • We’ve been enjoying a wonderful stretch of cooler weather—lows 60 or below, highs in the mid-80s—but it continues to be extremely dry in this part of Kentucky. I doubt that we’ve gotten more than a few inches total of rain since early June. (I suppose I could go add it up, since we keep track.)

  • The dryness hasn’t killed our garden, but it has required a lot of watering, something we aren’t set up well to do. Right now we have drip tape on the tomatoes, a critical crop, and we’re keeping an eye on the squash, which was nurtured through the early stages with hand-watering but now seems to be managing OK with the occasional rain we’ve received.

  • Our crops are late, partly by design and partly by accident. We’ve only just had a few things ready for sale—cherry tomatoes, garlic, some extra onions. But we should have various tomatoes (romas, New Girl, Carolina Gold) from now through the end of the growing season, and the winter squash (acorn, ambercup, delicata, blue hubbard) should be ready in a few weeks.

  • Sliced tomatoes now make a regular appearance at lunch and supper. We eat a lot and never get tired of them.

  • Our freezers were nearly full, and we had seventy-five chickens scheduled for slaughter within a week or two, so we started talking about getting another freezer; we already had one 10 cu ft chest freezer, a 20 cu ft upright, and the freezers of our two refrigerators. We had pretty much settled on a new 20 cu ft chest model, when Debbie discovered that our fifteen-year-old upright was no longer maintaining its temperature. So one new 20 cu ft chest freezer became two. One was delivered today, and the second will come at the end of next week. The second will have to go in the basement.

  • We raise some broilers to eat, some to sell, and some to give away. The original plan was to keep fifty of this year’s seventy-five, give fifteen to one of our pastors (the other raises his own chickens), and sell or give away the other ten. But now we find that we still have twenty-five chickens in the freezer; we ate fewer than we expected, and we slaughtered some unneeded roosters this spring. So we will only be keeping twenty-five broilers, and sell or give away another twenty-five. (And some of those will go to our other pastor, who we learned does not like to slaughter his own flock.)

  • We welcomed home our pigs from the slaughterhouse with a delicious grilled pork chop supper. Earlier that day I took the four hams and four slabs of bacon to a different slaughterhouse where they also cure and smoke meat (I would have liked to had the pigs slaughtered there as well, but it is about fifty miles from here, too long a drive to subject the animals to.) Tonight we will be having pork roast with homemade sauerkraut.

  • We sold one-half of one of our pigs to a neighbor, about sixty pounds of pork. They will also be buying one of the two cows we will have slaughtered this fall.

  • Since both of our calves this year were girls, we will be looking for one or two male calves this fall to raise for next year’s beef. But we don’t want to overwinter a full-sized cow like we did last year (lots of hay eaten without any weight gain), so those calves would be slaughtered at twelve months or so, after a summer of fattening on pasture. Next year we need to find our male calves in the late spring (if we need them).

  • After three years at this, the most important thing we’ve learned to this point is that we’ve barely begun to learn all that we need to know in order to be successful homesteaders. But God is merciful, and it turns out that even the little we’ve learned so far has been enough to feed us well and transform our everyday lives for the better.

Farm update: pigs are done

Last spring we began our first experience with pigs, when a neighbor stopped by in April and asked if we were interested in some piglets. We took two, and kept them in the pasture with the cows. Our field dog Samson took to them right away, and for months they were constant companions. We fed them, hog feed and table scraps and extra milk, but otherwise didn’t pay much attention to them.

We had vaguely expected them to go to the slaughterhouse sometime in the fall, but about a month ago we noticed that they were big—really big, bigger than Samson the Great Pyrenees. Then a couple of weeks they got out of the pasture, through a cattle panel that had come loose. Then they got out again. When they got out the third time, it occurred to us that they may have gotten a taste for getting out, and so the kids went around the pasture perimeter reinforcing the fence panels. Sad to say, not only had the pigs gotten a taste for getting out, they had gotten a sense of their own strength and were now testing the fence regularly. Worse, they were clearly strong enough to push and bend their way through a cattle panel, no matter how well attached.

The good news was that the pigs weren’t interested in roaming far, and always made their way back for evening feeding. But we were worried about them doing damage to someone else’s garden or property on one of their jaunts, so when they got out last night we decided it was time for them to meet their final reward.

This morning Debbie called the slaughterhouse and found out that they could take the pigs right away, so we scrambled to borrow a trailer for transporting them. Loading them ended up being fairly easy; they hadn’t been fed that morning, and were eager to get at the feed Chris used to lure them up the ramp into the trailer. And the ten-mile ride was uneventful; the trailer floor was covered with sweet feed from when it had been last used to haul cows, so they contentedly munched on that all the while. Unloading into the chute at the slaughterhouse was just about as easy.

The pigs were six months old and weighed in at 230 and 232 pounds. This was good news to me, not only because it was a respectable weight, but it is the weight at which Europeans usually slaughter “entire” (i.e. uncastrated) boars so as to avoid the risk of boar taint, an unpleasant flavor that can permeate the meat of a sexually mature hog (the American average slaughter weight is 260-270 pounds, i.e. the pigs tend to be older). I decided after some research not to castrate our own pigs, and I’m still a bit anxious about possibly having doomed a couple of hundred pounds of pork to inedibility. You can be sure that when I pick up the meat on Monday, the first thing I will do is thaw a pack of pork chops and anxiously throw them on the grill.

We expect to end up with meat weighing half the live weight, 230 pounds of it. We asked for the bacon and hams to be kept whole so that we can take it elsewhere to be smoked and cured. And we’re looking around to see if anyone in the neighborhood might be interested in buying a portion of the harvest, since 230 pounds would probably feed us (and take up valuable freezer space) for a couple of years.

We will almost certainly raise one or two pigs again next year. The taste of these will decide whether we castrate them or not. And we will probably try to figure out how to keep them in the woods rather than on pasture.

I.O.U.S.A.

If you are concerned about the rapidly growing national debt and its likely effects on life down the road, you may want to check out the new documentary I.O.U.S.A., which is being given a one-night showing in theaters nationwide on August 21, in hopes of generating enough interest to merit theatrical distribution. Here’s their blurb:

Wake up, America! We’re on the brink of a financial meltdown.

I.O.U.S.A. boldly examines the rapidly growing national debt and its consequences for the United States and its citizens. As the Baby Boomer generation prepares to retire, will there even be any Social Security benefits left to collect? Burdened with an ever-expanding government and military, increased international competition, overextended entitlement programs, and debts to foreign countries that are becoming impossible to honor, America must mend its spendthrift ways or face an economic disaster of epic proportions.

Throughout history, the American government has found it nearly impossible to spend only what has been raised through taxes. Wielding candid interviews with both average American taxpayers and government officials, Sundance veteran Patrick Creadon (Wordplay) helps demystify the nation’s financial practices and policies. The film follows U.S. Comptroller General David Walker as he crisscrosses the country explaining America’s unsustainable fiscal policies to its citizens.

With surgical precision, Creadon interweaves archival footage and economic data to paint a vivid and alarming profile of America’s current economic situation. The ultimate power of I.O.U.S.A. is that the film moves beyond doomsday rhetoric to proffer potential financial scenarios and propose solutions about how we can recreate a fiscally sound nation for future generations.

Pointedly topical and consummately nonpartisan, I.O.U.S.A. drives home the message that the only time for America’s financial future is now!

The critically-acclaimed documentary film I.O.U.S.A. was concieved of, co-written and executive produced by Agora Financial‘s Addison Wiggin. In July 2008, the film was acquired by The Peter G. Peterson Foundation. It will be featured in a Live Premier with Warren Buffet, Pete Peterson and David Walker in 400 theatres around the nation on August 21st, 2008. To find out more visit the film’s official site or click here to locate a theater near you.

And, if you’re interested, here is the trailer: