We raise our laying hens on a pasture based model. During the warmer months the birds are out on pasture and are moved every day to fresh grass. We love the quality of the eggs and the quality of life for the hens. My budget is just one way to create a budget and it will only get more accurate over time.
To download the excel file:
If you would like a copy of the Excel file that I used for my 2015 budget then you can put in your name and email on the form at the bottom of the post to subscribe to my newsletter and I will send it to you. If you are already on the newsletter then you will already be getting a copy sent to you in your inbox.
Egg production efficiency:
It is no secret that chickens don't lay eggs well all year long. Depending on a multiple of factors they either lay really well, or they don't lay at all. Getting your chickens to lay at least semi-consistently all year is a riddle that every farmer attempts to solve. The truth of the matter is that it is not healthy for a hen to lay at 100% efficiency all year long. It takes a lot of effort to poop out those eggs all year. Some of those those factors that contribute to a different level of efficiency are:
- The age of the bird (old hens don't lay as well as young ones)
- Hours of daylight
My numbers are already proving to be better this year than the original budget I created. That is a good example of two things: plan for the worst and hope for the best, and keeping good records so that each year you can be more accurate with your budgeting because you will have more solid numbers to go from.
Actual egg production numbers:
To get the number of eggs produced during the year and from that the number of dozens produced I created the equation:
number of birds x days of the month x production efficiency percentage = eggs produced
This gave me a number, by month, of how many dozens of eggs I would have for sale. Knowing what I charge for a dozen eggs will give me my gross sales numbers by month. That's as simple of the dozens produced x the price I charge = total gross sales. As time goes on and our record keeping gets more organized, more accurate, and based on actual numbers vs. my best guess based on past sloppy records we will have a better and better view of what this specific operation is going to look like on farm.
On farm we count eggs a few times to make sure we're accurate. We start with counting them at the coops when we collect. Then we count the dozens for sale after they have been cleaned. Both in the nesting boxes and during cleaning there will be cracked and deformed eggs and we want to know where they are breaking so we can figure out what to do about it. Also a little redundancy never hurt anyone.
Chicken Feed Costs:
I feed certified organic, non-GMO feed to all my hens on farm. That's super expensive. At any given time it costs between $0.45-$0.51 per pound of feed. I went on the higher end of the spectrum for calculating my costs. Again prepare for the worst. If I can get my feed costs down by finding a new supplier, finding a quality supplement, or whatever I'll have saved myself some money that I will then have the option of reinvesting back in the farm.
I typically choose to go with pessimistic so that I don't end up anticipating having more money than I am going to have, and then spend more money then I am able to, and then I end up in debt. That make sense? A for instance here. I would like to install more water hydrants around farm. That's going to cost me money. I can feasibly live without it, but it would make a big difference for me. If I create my budget and see that I cannot afford it then I won't spend the money right away and I'll deal with the annoyance over the debt. If I end up with more money I'll hang on to it knowing that I can re-invest it back into the farm because I had originally anticipated not having it, it's like a bonus at the end of the year.
Cost Of Goods Sold (COGS):
Feed is the major expense when producing eggs, that and labor. There are creative ways to save in other areas like shavings, egg cartons, etc... But those two are always going to cost you. Raising chickens for eggs on a small scale is a tough row to hoe. It's hard to make money as the margins just aren't there. One wrong move and you lose the profit really quickly. I'm not saying that I condone it, but if you spend a few years raising chickens out on pasture you start to see why people started raising them in barns. It takes a lot of time, a lot of skill, and there are a lot of predators. Everything eats chicken.
Taking labor out of the equation:
Since the publication of my broiler budget I have taken labor out of the math of my COGS. Tracking the hours an operation takes is smart, but then putting a dollar amount to that on this document is not the way to go. Here at Camps Road Farm I am a hired Farm Manager. We have other employees on salary as well. That salary number has to be accounted for out of the gross profits and not necessarily the COGS. Every time you do work on your farm it won't necessarily cost you the same amount of money. Labor calculations are such a tricky thing to try and share because everyone's situation(s) are going to be different.
We now factor labor into a different part of the budget as an HR item. I had actually counted to twice by accident and having found that mistake my numbers are looking better this year than originally anticipated.
Cash flow statement for eggs:
Cash flow statements are good to have in general because it lets you know if you are going to be able to pay your bills at any given time. That and it lets you see when times are good and when times are tight at a glance. Winter is both a blessed and a rough time on farm. There's more time to update paperwork, work on marketing, update your website, and most importantly spend some time with your family. It is a rough time because (as I'm writing this) it is 10 degrees outside and there's limited sunlight. Nothing is growing and everything I do outside takes twice as long as in the summer.
Knowing when the bountiful times and when the lean times are on your farm will help you prepare for what's to come. You will have a better idea of the numbers as you go through the years if you keep up with your record keeping. Eggs are no different than any other operation on our farm. We need to know when we're really making money and when they are losing money so we can either prepare for it or adjust our practices.
Things I hope to improve this year:
There are so many things that I want to improve on the farm this year. If you are not constantly improving then you are just choosing to ignore something. For eggs I want to get our Cost Of Goods Sold down and get the whole process more efficient. Our care and management of the hens is pretty good though we know what we need to improve there, that was our focus in 2014. Now in 2015 we hope to make it a more profitable part of the farm. To do that we:
- are adjusting the scale at which we operate
- potentially have a less-expensive but still high-quality feed supplier lined up
- making micro adjustments to our management methods
How I raise chickens for eggs on pasture:
Now, that is a big title. This is meant to be a brief over-view and not an in-depth "all questions answered" explanation. If you want more detail ask me in the comments section below or subscribe to our FMS YouTube Channel for more "how-to" information about our practices.
I will never say that what I am doing is the "be all end all" of methods. I am here to share what I am doing whether or not I find it successful. If you find something I'm doing wrong or have questions let me know because I am always looking to improve.
In the summer:
In the summer all of our birds are out on pasture. They live in mobile chicken coops that are on wheels and are moved on pasture every single day. We surround the coops with mobile electric poultry netting and move the coops around inside that netting until a new area is set up. In the summer our chickens are:
- moved every day to fresh grass
- kept in mobile coops
- given certified organic non-GMO feed and scratch grains
- given vegetable garden scraps
For the playlist of videos on how we raise chickens check this out:
In the winter:
In the winter our birds share space in one of our greenhouses. We are keeping them on a deep bedding system with wood chips and straw. The wall of the greenhouse rolls down which allows the birds outside. They are fed the same certified organic feed as in the summer but we stop feed restriction because of the added stress of it being cold out. We give them lights from 4-9pm and we never give them supplemental heat. For more on our winter chicken situation refer to the above YouTube playlist.
Farm Finance Challenge
At the publication of this blog post we are merely weeks away from launching the Farm Finance Challenge. My farm and 12 others from around the country are going to be publicly posting our production and financial numbers on Farm Marketing Solutions in order to keep ourselves accountable for our record keeping, share the information with other farmers, and support small scale agriculture.
I cannot begin to tell you just how excited I am going into 2015. This year brings a lot of promise for my farming and farming in general. If you are interested in hearing more about the FFC then click this link to visit our HUB page.