Oh, the joy! The fulfillment of a lifelong dream!
I liked my grandma’s house so much I bought it.
But now that I have it, how do I pay for it? Land isn’t exactly cheap right now…nor was it when I bought the farm a few years ago.
Let’s leave the dollars out of this. Let’s talk in terms of production. What do I have to produce each year just to service the debt I hold on my 60 acres? Ready? I have to produce all of the following:
- 2,000 dozen eggs
- 5-7 calves
- 20 pigs
- 1,200 broilers
All that just to make the farm payment. Now, maybe that’s not such a high hurdle…especially since the math involved has already accounted for income tax. But it is a hurdle. 1,200 broilers at our scale chews up the whole spring and fall. 3 batches of 6-8 pigs are no big deal but forces us to keep pigs all year. Eggs are a year-round deal too but 100 layers really aren’t hard to manage. That said, the income from that small flock only accounts for about 12% of the farm revenue as presented above. Layers are more about fertility and bug control than revenue but maybe we should increase the flock to account for a full 25% of revenue. Yikes! Mr. Henderson would say yes but…Yikes!
So that’s what it takes. Sure I could pay the payment with 20 calves but I don’t have 20 calves. And I’m not sure I want to ONLY have cattle anyway. I have exposure to a number of markets this way. Many customers buy eggs. Fewer buy chicken. Fewer still buy pork. The marketing pyramid works very well. So we produce a variety of classes of livestock. The good news is we already have everything we need to produce these numbers. The bad news is all of that production ONLY SERVICES THE DEBT.
What about the fencing we need to build? What about the trees we want to plant? What about the buildings that need to be repaired? How can I afford to buy a tractor?
I don’t know. I guess I need a couple more pigs. And another 300 broilers. And another calf or three. And another 100 layers.
But Julie is already tired (as I frequently write). How can I double my livestock numbers without negatively impacting my job or our family life? I don’t know. Maybe I should quit my job.
But if I quit my job we’ll still need some form of income. Remember, to date we are only servicing the debt and producing enough to make small infrastructure investments. Now we’re talking income. You know, money. The kind you need to slap braces on the kids and pay for books and plan for college and…you know…what happens when I’m 70? Will I be able to relax on the farm I have served my entire life, harvesting the abundance of my decades of labor or will I have to sell my beloved land and move to town?
Happens all the time.
Well, that’s no hill for a climber. Maybe if we got to 300 layers. That would give us 15 dozen eggs/day to sell. And maybe we could raise 15 pigs at a time. And sell 25 calves every fall. And heck, the kids are growing. Maybe we can handle 2,400 broilers. Maybe even 3,000! Would that be enough?
What does enough mean? How much is enough?
How much is too much?
I don’t know. Dirty Harry warned that “A man’s got to know his limitations.”
Do I know my limitations?
Do I believe I am immortal?
Did I pay too much for my farm?
What is this dream costing me?
Don’t read regret into this post. Please don’t think I’m being pessimistic. Quite the opposite. After spending a few years learning how I’m finally making this thing pay.
So. Be sure to sit yourself down with a couple of sharp pencils and do the math before you buy land. Try to sell something. Just try. Your boss may enjoy eating pork chops but does he have freezer space for half of a hog? Will your co-workers continue buying from you if you change jobs? Can you sell a dozen eggs at a profit? Start small. Learn as you go. Grow when you have to. Move slowly. Always do the math.
Always do the math.