Tuesday, June 13, 2006

Challenges of small farms

Last Thursday, we took 28 young roosters to the processing plant in Arthur, IL. That sounds more elaborate than it is -- it's a little white building that looks like a house from the outside. It's run by the Amish and inspected by the USDA. Inside, it looks like a commercial kitchen. We drop off crowing roosters in the morning and pick up chicken in plastic, shrink-wrapped packages in the afternoon.

My oldest daughter and I took the chickens down there last week. While there, we had to fill the truck with gas. Suddenly it dawned on us that it had cost us $1.50 for each chicken to drive them down there! That's a huge chunk of profit out of chickens that are being sold for $3.25 a pound for whole or $3.50 per pound for cut-up. Heritage chickens don't weigh as much as commercial breeds. These averaged 2.5 to 3 pounds each. The purchase cost of the roosters as day-old chicks was $1.39 + processing cost of $2.50 per chicken + the gasoline = more than $7 per chicken before the cost of feed! (And no, that does not even include anything for labor, so we worked for free all these months raising the chickens.) Since these chickens ate a lot over the four months it took to grow this big, we were really depressed for the whole drive home. It wasn't this bad a few years ago. We weren't buying specific breeds. If you are willing to take whatever heritage breed the hatchery has left over, they can be as cheap as 40 cents each. The cost of gasoline has doubled in the past four years, and the cost of processing has increased by $1 per bird.

Commercial chickens grow to this size in only six to seven weeks, so how can we possibly compete? Forget competing! How can we possibly make a profit with slow-growing chickens? We obviously cannot take them to the processor unless we have at least 100 at a time. That would cut the cost per bird to around 50 cents per bird for transportation. If we could process the birds on the farm, we could eliminate the entire transportation cost and the processing cost. If we didn't buy chicks from a hatchery, that would save even more. Right now we only have a few new chickens raised on the farm each year because our hens don't set that much. We'd have to use an incubator for hatching eggs if we wanted to raise a lot. Then half the chicks would be hens, so we couldn't hatch 500 chicks unless we wanted 250 new laying hens every year. (Hens are even smaller than roosters, so aren't really practical for butchering when they're young.) Processing chickens on the farm is not practical since it takes us 45 minutes to butcher a single chicken. It would have taken us days to process 28. Plucking is what takes so much time, and a mechanical plucker costs close to a thousand dollars, which we can't afford.

I can understand why our customers say they can't find products like ours anywhere else -- no one can stay in business doing what we're doing. So, what do we do? Obviously, we need capital to buy a commercial incubator and a mechnical plucker. We'd also need a commercial kitchen to process the chickens. We're researching incorporating as an S-corporation, an LLC or a not-for-profit. I was surprised to learn that agricultural business in Illinois can be not-for-profit. I guess they know how little small farms can make. If we incorporate, we can sell stock. If we become a not-for-profit, people can buy memberships. There is a lot to research and a lot to consider, but one thing we're discovering is that the farm of the 1800s cannot survive in the 21st century.


june in florida said...

Deborah i cant give advice about raising chickens but i sure appreciate free range chickens and eggs. I do not want anything in my body that can grow a bird to maturity in 5 weeks.Could you go with just eggs, have'nt seen an egg you had to pluck yet.Your having a heck of a bird week. Hang in there.

Deborah said...

It gets back to money again. The hen house is only so big. We had to butcher our 2-4 year old hens this winter because we were expecting about half of our 100 chickens to be hens. (Most chickens don't lay much after they're two years old anyway.) Now that we've moved the new pullets into the hen house, it's looking pretty crowded. We had about 20 hens age 2 and under, so 70 is about the limit for that house. I think it cost us about $1,000 to build. I wouldn't mind having more laying hens. We certainly have the room for them to run around on our 32 acres, and the eggs sell themselves. It's just the darn money thing again!


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