Pareto’s Farm

Have you ever reviewed Pareto’s Law?  The 80/20 rule?  The idea that 20% of the things I do around the farm make 80% of the impact is probably true but I find it offensive anyway.  I’m wasting 80% of my time and there’s no way to fix it.  In fact, 80% of that 20% is also a waste of time.  That means that 4% of my labor on the farm accounts for 96% of the impact.  For those of you troubled by percentages I offer the following clip:

For sake of example, let’s say I spend 80% of my farming time raising layers (egg birds), moving netting and houses, hauling water, grinding feed, gathering, washing, sorting and packing eggs and outsmarting the raccoons.  Then sell the eggs for 20% of my annual profit.  Actually, that’s a pretty accurate example so I’ll push forward.  Constrast that with the pigs.  I spend about 20% of my farming time with the pigs and make about 80% of the comparitave farm profit.  Now, I do more than two things with my time but among layers and pigs, 80/20 seems to hold water.

So what do we do with that thinking?  Is it a waste of time for me to keep a layer flock?  I don’t know.  I would guess that 80% of my sales are egg sales.  But 100% of my pig sales are to customers who already buy something else from me…typically eggs.  20% of my revenue gets my foot in the door for the rest.  If I sell off (or make soup with) the layer flock I would have a lot of extra time on my hands each day (80% of my farm time).  My farm revenue picture would immediately go down a bit but not more than 20% even though I would abandon 80% of my customer base.  What percent of future revenue would be negatively impacted?

I don’t know but let’s run with it.  Let’s pretend I have cleared house.  I got rid of the items that I have currently identified as accounting for 20% of the revenue and 80% of the time.  Now what happens?  That’s right, We get to drill into that profitable remainder and cut out the fat.  What else do I do with my time?  Well, I have this job off farm that uses more than 20% of my time but brings in more than 80% of the family revenue.  I guess that means the pigs get cut out too so I can focus more of my energy on my job.

Well, that took an unhappy turn.  Let’s not take Pareto to it’s logical conclusion.  There is joy, purpose and value in inefficiency.  Don’t sweat it, egg customers.  I won’t abandon you.  I do think there is value in evaluating how I spend my time as time is mine to steward as well as family, land and livestock.

7 thoughts on “Pareto’s Farm

  1. Well, this one sparked a lively debate over tea this morning! We’ve referred to PP many times over the years, and like you, have applied it to our farm. The truth is, farming is a lifestyle choice as much as a means to make a living. If we were only in it to make income, then the labour intensive models would go out the window, and we’d all be farming with big blue metal chicken barns and feed lots for cattle.

    • Right. But even within the labor-intensive model you can drive yourself crazy chasing efficiency. Salatin doesn’t make a fortune keeping layers. They are probably his 20% too. BUT they eat 96% of the bugs. It’s too easy to make the mistake of only looking at the dollar signs and missing other important details. Quality of life is the easiest to miss. I really like New Hampshire Red hens on the green hillsides. That’s worth something.

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