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.

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What Pigeonhole do you fit in?

Is your farm organic?  Is your farm free-range?  Are you just conventional farmers?

We hear these questions frequently from prospective customers.  Let me answer the question.  No.

I don’t look down on my friends who produce organic products.  I also don’t look down my nose at my conventional farming neighbors, though I do hope they don’t go broke.  I really try not to look down at anyone.  I just do my very best to bring a quality product to market that will enhance the health of my land and the local ecosystem and nourish your family.

Our animals are healthy, happy and normal.  Our pigs and chickens are allowed to be omnivores and given regular doses of fresh grass and forbs.  They are expected to contribute positively to our pasture management to earn their keep.  We don’t have chickens for the sake of having chickens, they are a tool that we use carefully.  Similarly, our goats and cows are expected to be herbivores.  They have to eat a wide variety of plants.  Each of our herbivores perform a different function, either mowing and crushing or trimming.  Both add manure.  The milk we receive is a wonderful but secondary goal.  The primary goal is enhanced microbial activity in our soil leading to increase fertility, dense swards, healthy trees and non-eroding waterways.  Again, we accomplish this by keeping the right animals in the right places for just the right amounts of time and allowing them the opportunity to fully express their unique talents.

So, what do you call that?  How about orchestrated, choreographed, local, respectful, ethical agriculture?

How do you, the customer, verify that we actually do what we say we do?  You come see for yourself.

There is no man behind the curtain.  There is no curtain.

We don’t desire third-party verification at this time mainly because we want relationships with our customers.  We want customers who will come and see how things work here, customers who will ask questions and make suggestions and challenge us to continue improving.  We want customers who will partner with us.

What about GMO-free or organic grains?

We’re just not there yet.  I have been in contact with a vendor who can provide me a complete non-GMO feed solution for my stock.  He’s in Ohio.  At this point, we think it’s better for us to buy corn straight from the field that may be GMO and certainly is not organic but is grown within 100 yards away from our house than to buy grain from hundreds of miles away and uses unknown quantities of petroleum to get here.  We buy local.  I am working to influence the local farmers I buy from to take the next step in environmental and ecological stewardship.  They aren’t there yet.  But, together we’ll get there.

I’m buying local, working with what is available here, now.  I’m doing the very best I can to bring a locally produced, quality product to market that was not only humanely raised but humanely processed.  Not only humanely processed but locally processed.  I don’t ship my birds 200 miles for processing just to bring them back again.  We do the work here.  We use local sawdust, local straw, buy local corn, and buy locally produced animals whenever possible.  Sure, there are things I buy that are not local but I try to buy them from local vendors.  For example, I buy coco coir from a vendor close to where I work, though it probably comes from Sri Lanka.

I’m working to be as local as I can.  I’m also working to make it better.

To be honest we aren’t where we want to be on many of these issues.  Please partner with us, join us on our farm, encourage us to continue working and participate in the local economy.

What about antibiotics?

When a cow or horse gets sick we’ll take steps to heal it using whatever technology is appropriate.  We don’t use subtheraputic levels of antibiotics or medicated feed to help the chickens survive until slaughter date.  Our management style makes that unnecessary and we feel that is an inappropriate use of medication.  Though we have never used antibiotics on our animals, even our willingness to use an antibiotic to heal a sick animal would prevent us from achieving organic certification.  I want to care for my stock.  I’m willing to use whatever means are appropriate.  While I’m unwilling to allow my animals to suffer to strive for an ideal, I take precautions to maximize our animal’s immune system function by providing a varied diet, allowing the animals to select the most palatable and nourishing food and providing minerals free-choice.  We minimize their need for immune response with multi-species grazing and long periods of pasture rest and recovery.

Again the best thing you, the consumer, can do is to come see what’s going on here.  I hesitate to quote Regan but I’m asking you to trust, but verify your farmer.