Falling Prices on Chickens and Eggs!
I was watching a documentary the other day about a woman who has developed a new method of purifying water by lining a water container with a liquid that contains live bacteria. The bacteria work to clean the water in the container, ultimately rendering the water drinkable. A visit to India, where she witnessed many people in abject poverty carrying absolutely filthy drinking water home to their families, inspired her to develop this new approach to water purification. As you might guess, sickness and disease are rampant in these areas, so clean water is essential to life.
This woman had a great idea, but I could not help but think: Why not just clean up the water? Of course my naivete quickly gave way to the realization: Of course, it will take years of coordinated effort by local leaders, citizens, business interests, etc. to clean up the polluted waters. Thus, there is a need for clean water now while the wheels of change and improvement move slowly forward.
There are similarities between my realization about the water issue to our farming journey. I have a desire to see our soil stressed property returned to lush, green pastures. We are making progress, but it will take time. That goal ultimately will be the result of the four principals of our farm:
- Use our animals to regenerate the land.
- Encourage all of our animals to get at least 50% of their food source from forage on the land.
- Maintain a pricing model that allows our products to be affordable to a large segment of the population.
- Provide the best, freshest meat protein for our family and our customers.
None of our goals happen without our loyal customers. Sales provide the resources to purchase animals and feed. The animals, in turn, help put life back into the soil. At these beginning stages, though, our chickens and pigs rely primarily on grain feed purchased off the farm. It will take awhile before we can realize Principal #2 for these animals. (I should note that our cattle are all grass fed on our farm and on local property leases.) As such, in an effort to make our grain-fed products more affordable, and thus be able to grow our supply, we are transitioning from our retail purchased organic feed to buying feed directly from a Colorado mill which sources only non-GMO grains.
A Peak Behind the CurtainWithout going into too much detail, let me note that that our fixed costs - purchase of a baby chick, feed, and processing fee - for raising one meat chicken on organic feed was about $19.00 last year. Our desired margin on each bird is about $3.00 over our costs. Thus, we need to sell our birds for an average of $22.00 each to make that margin. With our pricing structure at $5.25 per pound, we failed to cover our costs, much less make our margin, on most of our chicken sales last year. Further, simply raising the price did not seem to be the answer. While we have some very loyal chicken customers, our birds did not exactly "fly" off our shelves at that price. Something else needed to give.
[NOTE: I should mention that our chicken sales have increased significantly since we reduced our prices recently. Let me give a big shout-out to the invisible hand of market forces!]
While we have no control over the pricing of baby chicks from our supplier, nor can we influence (yet) the cost that our processor charges for dressing, labeling, and freezing our birds, we do have some control over feed costs. Because we do not support the race-to-the-bottom mentality that drives conventional feed production, we will not switch from organic feed to cheap "commercial" feed. We were pleased to find a supplier that sources all non-GMO grains from Colorado farms. Jason of Farmstead Supply is our new supplier. While he has a good base product line, and he has been willing to modify our feed to our specific requirements for mineral supplements and some grain variations. Our new association with Jason will lowered our feed cost by over 50%, or about $4.50 per bird. Further, by switching our layers to the new feed, we will be dropping our egg prices a bit, as well.
This switch in no way changes our commitment to providing our animals, and ultimately our customers, with the cleanest feed possible. To ensure that we are buying "clean" feed, we started sending samples to an independent lab in Kansas for testing. Thus far, we have been please with the results of the preliminary tests. Specifically, we have been testing for the herbicide glyphosate (Monsanto's Roundup). While glyphosate is thought to not be used on non-GMO grains, some farmers use glyphosate on these grains to speed up time to harvest. We want to ensure that this is not happening to our feed. While it is increasingly difficult to eliminate the ubiquitous chemical from grain supplies, we want to ensure that - at most - only trace amounts are detectable. (For an interesting read on the increased use of glyphosate in some organic farming, click HERE.)
Will We Offer Organically Fed Products in the Future?The plan is to offer some of our products raised on organic, non-soy feed in the future. I say that it is a future plan because all of this is based on volume. Even to make the pricing of our non-GMO feed work, we need to purchase about 3 tons of feed every 4 to six weeks. For this reason we have added our laying chickens and pigs to the non-GMO feed diet. Once we drive consistent sales of these products, with the specific goal of increasing the fertility and growth of our pastures, we will then look at adding an organic, non-soy line of products into the mix.
All of us from the Adams Family at Viresco Farm want you to be exceptionally pleased with the meat and eggs that you buy from us. And while we will always be a small farm (by industry standards), we do desire to be more than a micro farm. To do that, we need to make some adjustments that we hope will be beneficial to both your family and our farm.
If you have any questions, please do not hesitate to call us at the farm.