Egg Prices, Corn Prices and the Value of My Wife’s Time

What does it cost to produce a dozen eggs?  This is important since we’re staring down the barrel of a regional total crop failure.  Corn prices are rising and my dad’s tenant indicates that only about 1/3 of the stalks have ears and those ears aren’t filling out.  There’s hardly a bean in the soybean fields around me.  If this is true on a wider scale, we could be in some trouble.  How much will this affect the price of the eggs we produce?  Let’s break it down a little bit.

Averaged out, I get around 60 dozen eggs each month.  Each dozen needs its own, new egg carton (Illinois law).  When I ordered cartons in Feb. they were $0.32, now those same cartons cost me $0.56 each.  They have another paper carton that’s $0.36.  I don’t like it as much but two dimes saved is two dimes earned.  Eggs will taste just as good and the cartons are just as recyclable.

My flock of 40 birds eat 200 pounds of feed each month.  If corn costs $6.50 (what I paid last year for my dwindling supply of corn), it costs me $12.89 for the ingredients to grind my own bag of feed.  That doesn’t count the equipment cost or time involved in grinding that feed.  If corn stays at $8.00, each bag will cost $13.57 before grinding.

What other costs are involved?  Each morning we have to fill the drinkers and feeders and move the houses.  Each evening we have to gather the eggs.  Every other day we clean, sort, weigh, candle and pack the eggs.  Every few days we build fence.  What is that time worth?

It takes 5 months to go from chick to egg and those first eggs each pullet lays are quite small…too small to sell.  So, even though they start laying at 5 months, they are 6 months old before I can begin selling their eggs.  That’s 6 months of feed, water and care that I have to pay for with eggs over the next 18-20 months of productive hen life.

I have to pay for their housing.  I have to pay for the fencing that surrounds them ($0.04 per length per day).  I will lose some birds to predation and weather.  How much do I pay myself for sitting in a field all night holding a gun when predators get a taste for chicken?

I have to fill out the paperwork for our egg license and meet with our inspector annually.  He checks our fridge temperature, validates our scale and egg quality then hands us some promotional items.  At least he comes to our house so we don’t have to make a trip to some testing facility in Timbuktu but it still takes time.  We have to get a license from the king to sell our own eggs.  That license costs $15 each year plus we pay an inspection fee of $0.11 per 30 dozen eggs…to pay for our inspector to drive here once each year and say, “Hi”.  That takes away from our profit also.  One day, if we work hard enough, we can pay income tax too.  Oh, to dream!

So what do I charge?  It would appear that I could make a little (only a little) money selling eggs but the income is limited by the number of hours in a day.  I have to handle every egg.  The costs above indicate I am paying $1.28 just for feed and egg cartons plus a few more cents for inspection and licensing (you know, because consumers can’t judge for themseves if cartons are clean or if eggs are any good).  The fencing and housing are spread over 10 years and the chick and brooder time are spread over 2 years then we harvest and sell the bird as a stewing hen.  We charge $3.50 for our eggs and get an average of 60 dozen each month.  That means we make something like $3 each day from eggs before accounting for our time.  Either we need to increase our egg production, raise our prices or close up shop.  Salatin says he makes $12 over the life of the hen.  I think he’s right.  It’s a lousy primary enterprise but they do sanitize the pasture and keep the family entertained.  At $8 corn I’m under some pressure to lower my entertainment cost or find feed alternatives but the real pressure comes from labor costs.  It takes a lot of time to feed and water the animals then gather, sort and peddle the eggs.  Compared to our labor costs, the price of corn is insignificant.  My prices have to go up, not because the price of corn went up, but because I’m learning about business the hard way.

That’s not to say food costs won’t rise because of the bad crop.  They will.  60% of the corn produced in this country is fed to animals.  It’s in most dog and cat foods…not just what we feed pigs, chicken and (unfortunately) beef.  Corn is in everything…including your gas tank.  Soybeans are in everything too.  Producers are going to have to determine the marginal utility of each compared to substitutions.  I may feed potatoes and milk to pigs…if I continue to raise pigs.  But, as a consumer, you need to consider marginal utility as well.  Just because corn products cost more doesn’t mean you have to buy them.  What substitutions can you bring into your kitchen?  I’m afraid there is little substitution for a good egg.  I’ll do my best to make appropriate substitutions on my side as well as streamline my labor to encourage you to continue to buy my eggs.  I believe you will continue to find my products to be a good value even in the face of rising prices.

—UPDATE—

Dad pointed out a couple of things not factored into my equations above.  75 layers generate 15-21 pounds of manure each day or a maximum of 115 pounds of nitrogen, 65 pounds of phosphorus and 42 pounds of potassium per acre, not to mention the trace minerals I put in their feed ration.  That has value.  They also eat bugs.  That has value.  I don’t mean to say my chickens are a drain on our budget, I’m saying, in terms of farm cash flow, economies of scale work against me trying to generate income from a small flock.