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March 06, 2013

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Mac

We are mom and pop organic egg producers selling eggs wholesale as members of a producers’ cooperative. We do not grade, pack, nor market the eggs. They are packed in bulk as nest run eggs to be trucked to a processing plant. The cooperative handles the rest.

We buy ready-to-lay pullets at 18 weeks old, keep them in production for 50 weeks, and then depopulate, creating a 52 week cycle.

Our income and expenses per hen for 2500 hens:

25 dz eggs (300 eggs in 50 weeks) @ $2.00 / dz = $50.00 income

Pullets cost $8. Less $1 for the spent hen = $7.00

Feed 95 lbs @ $0.315 = ~ $30.00

Depreciation, insurance, utilities = ~ $5.00

This leaves $8 per hen profit.

For 2500 hens that’s $20,000 per year for about 1000 hours labor per year.

This varies slightly with feed price and pay price, but we have maintained a $7 - $9 per bird profit for the past five years.

Tys

just wanted to chime in more agreement. I have just a hobby hen house, with what was 5 birds (given to me!) and just keeping track of all expenses as I went, now 5 months in, I have just gotten to .44 cents an egg, or $5.28/doz, and more feed costs are on the horizon and low production over the winter.
raising your own eggs for your house does not make financial sense. it is a pleasant hobby, I guess, and nice to know where your eggs come from...

Rebecca Thistlethwaite

Bethany- thank you for taking so much time to respond with such detail. I like how you look at their 2 year life span instead of just 12 months- that certainly makes more sense. However, I disagree that most large, commercial egg operations (over 500 birds) can hatch their own chicks affordably and efficiently (equipment, electricity, death loss, poor breeding etc.) It is really hard to do the large batch sizes of even age groups when you are also breeding and hatching. I have seen too many small farmers trying to add this to their complex list of daily chores with not very successful results. Poor breeding will lead to poor egg production. But if you enjoy that aspect of chicken husbandry, then by all means do it. Likewise, buying whole grains (or growing your own) can be more affordable but usually if you don't factor in the increased labor, trucking, etc. I met a farmer recently who told me they paid .23/lb for their chicken feed. I asked how much $ they spent on labor. Ended up that feed cost much closer to .30/lb. after factoring in their time, which is comparable to buying it pre-mixed.
Pasturing birds doesn't really reduce feed costs, unless you are raising a very small amount that can take advantage of the insects, worms, etc. Once you get over a certain population of birds (maybe 50), the foraging pressure of the birds is too much for the pasture life to support them adequately AND keep your egg production up. While some people like to suggest that birds can forage up to 25% of their diet from pasture/bugs, scientific studies have not shown that to be the case. When I find the links, I shall add them here. About 5% is all you can hope for.
As for adding overhead, your farm enterprises must support that overhead (unless you always want to work an off-farm job to support your farming habit). If egg production is one of those enterprises, it must pay a proportion of the overhead. Not paying for overhead is one of the reasons I have seen many farms struggle or go under. They just can't pay for the depreciation of farm infrastructure, property taxes, liability insurance, etc. My article is encouraging farmers to run their egg enterprise like a business instead of loosing money with each dozen that they sell. I your prefer to pay your overhead some other way, that is your choice, but it is not sound business practice.

Bethany - Rural Living Today

Your numbers are off - you have calculated 25lbs of feed for the first 22 weeks, but then you've also added in 12 months of layer feed, but you are using those numbers to calculate a year's worth of expenses which is incorrect. It should be 22 weeks to laying age, and then 30 more weeks to finish out the year, not 12 months. You also need to average in year 2 costs, which will be different since they don't include the cost of the chick. SO what you really need to be doing is adding up the costs for the first TWO years and then using those numbers.

So even using your numbers it should work out to be the following:
Hatchery chicks ($2.75 average, sexed)
Feed until laying age (25lbs from day-old chicks to 22 weeks x .32lb. is $8)
Feed for 82 weeks of production (.27lbs a day most efficient x .32lb. is $49.59)
Bedding material, oyster shell, grit, diatomaceous earth ($4 a bird)
Electricity for brooding, supplemental lighting, egg refrigeration ($4 a bird)
Chicken coop, waterers, feeder, egg washer depreciation ($8 a bird)
Egg cartons, labels, ink for labels ($6 a bird)
Labor (.10/day x 730 days per bird is $73.00)
Overhead (insurance, prop taxes, etc. is $7.20 a bird)
Total Expenses per Bird (2 years): $162.54
Total Expenses per Bird: $81.27/year
Assuming 400 eggs (2 years): $4.88/dozen

Also - take into account the price of the hen at age 2 being sold as a stewing hen. I'll use Polyface Farm's price which averages $12 per stewing hen. In my local area, if we pay for a hen to be processed that costs $3, so we would then net an additional $9 on each hen at the end of her life which would be an additional $1800 for a 200 bird flock.

Costs can be significantly reduced on the most expensive portions by hatching your own chicks and sourcing local grains for feed, if available. We are able to source our own local, non GMO grains and using a small grinder, we are able to make our own soy-free fresh feed for under $.20/lb including labor. Pasturing them will reduce the need for the bedding, grit, DE, and will also further reduce feed costs.

With a small incubator and the cost of feeding a rooster or two, you can also save the cost of hatchery chicks as well as the increased mortality rates from shipping & transportation. You can even have a special flock of broody-breed hens to do the incubator work for you, which would in turn reduce mortality rate.

The other thing to consider is that many of the overhead expenses such as property taxes, etc. are already being paid by the farmer regardless of if they run chickens or not. While it is a very real cost to calculate in, it does make the numbers seem skewed if someone who already has the land in place looks at them and thinks they cannot make a profit. They are already paying the taxes and mortgage payments anyway, so it isn't as if it will be an additional cost they incur because of the poultry business.

Bruce King

I've cultivated a market for live roosters and spent hens and don't get much price resistance at $15 a bird, live.

Selling them live means no permitting, no processing costs or equipment, and is generally a much better deal for me.

It's interesting because you can get a packaged cornish cross at the local big-box retail store for about $3 each -- the customers who choose to buy these birds from me prefer the parts of the chicken that they cannot get in the bag (feet, blood, entrails) the security of knowing the health and look of the chicken that they are buying, and they know that the processing is done according to their preferences, traditions and personal safety guidelines -- as they do the processing themselves.

it's difficult for most americans to understand, but there actually is a pretty good market for these birds. We raise around 500 roosters a year and sell them all at the farm gate, usually in batches of 50 to 100 birds 2 weeks apart.

We do heritage roosers because we get them from a local hatchery at $0.25/each, put $8 in feed and not much labor into them, and sell them for $15. Labor is at a minimum because they're all raised in one flock, free-range, so one feeder, one waterer. Customers choose their birds out of the flock. Some want lighter, some heavier, some prefer red or black (almost no one wants a white bird), etc.

...Because of cultural differences we always ask for $20 to allow the customer room to haggle. Surprisingly enough, we get $20 sometimes, but our average sale price is pretty close to $15.

Rebecca Thistlethwaite

Garth- great questions. First off, I think you should raise age groups in flocks so you can cull them as a group. One way to do this is by breed specific flocks. So one year you could do Rhode Islands, next year black sex links, etc.. then you can age them by breed. Next is to periodically check them all for egg production. A quick, imprecise way is to pick each up while sleeping and flip them over the measure the distance between their pubic bones. My husband's rule of thumb is 2 or more fingers wide between pubes and 3-4 between pubic bone & keel bone means she is still laying. In addition to individual checks every six months or so, we would cull systematically after two full laying cycles, selling them live to Mexicans or dead at farmers market as stewing hens (usually $10 live or $15 processed). I did not factor in selling the birds at end of life into the equation above because I know that doesn't work everywhere, but you can probably credit yourself $10 a bird for that.

garth

How do you track hen productivity? Do you have multiple flocks for individual management or just band each new batch and cull based on age? I've visited one farm that managed four flocks, each started six months apart, that would cull at two years of age.

Any further specifics that you can share? And have you had any success selling culls for meat? One farmer I know sells his cull hens for $10/each live to migrant workers who lack refrigeration but do not lack the ability to cook a hen. My personal plan is to sell spent hens to a French restaurant that wants to run a special on coq-au-vin. (Of course, then there's marketing time, processing equipment, and labor costs... Farming is spreadsheet intensive.)

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