Monday, December 9, 2013

A real live cost analysis of poultry

Firstly, this post is meant as an example, just to give folks a little idea of how we operate. Folks know that we place the care of our animals and our environment first, and believe that our methods promote sustainability. Aside from that, we'll put our products up for a taste test against a grocery store chicken any day.

We try to be as transparent as possible, and sometimes we forget that not everyone is as familiar with the costs of agriculture as we are. So in an effort to really, really talk about how much it costs to raise any of our livestock, we present you with this post- a boring but honest run down of numbers related to just one of our favorite efforts- chicken.

120 baby chickens at $1.20/chick (we get a discounted price because of our bulk orders)
$144
Shipping on the 120 chicks: $25

6-8 bales of bedding to keep chickens dry and clean for the first 4 weeks of life/brooding: $35-45

Heat lamps, bulbs to keep chicks warm for the first 4 weeks- $10 each (need at least 2, probably 3 or 4)(plus electricity to run them, about $15) $35-75

Small chicken water container (4)- $6/each
Gallon chicken water container (2)- $6/each
5.5 field water container (2)- $30/each

Estimated cost for water containers- $66 (yes, you can re-use them, but for our purposes let's assume we need to replace them at least once yearly, as they do break)

Materials to build a move-able chicken pen- $80-$100 (pvc pipes, chicken wire, hardware cloth, tarp, screws, cement, primer, zip ties)

Estimates for at least 1 repair from predators, weather etc for the 12 week growth period- $15

*note this doesn't include the cost of the tools to build the movable pen.

Feed:

50lbs of high quality feed- 18-32 dollars, depending on the time of the year, supplier and shipping charges.

Amount of feed by week:
Week 1- 50lbs
Week 2- 50lbs
Week 3- 75lbs
Week 4- 75lbs
Week 5- 100lbs
Week 6- 150lbs
Week 7-12 225lbs or more
Approximate amount of feed needed: 2,000lbs

Total feed cost estimate:  $720-$1280

Processing Fees- These vary based on your equipment availability, but let's use our equipment from last year as an example.
Rental of a chicken plucker- $50
Gas to transport plucker from 45 minutes away- $45
Knives and a good knife sharpener- $140 (let's rate it at $25/each usage)
Propane- $15
Large Pot- $30 (rate it at $5)
Disposal vessels- $75 (rate it at $10)
Stainless tables/work surfaces, sinks- $80 (rate it at $10)
120 freezer seal bags- (27 cents each) - $32.40
120 staples to seal bags (2 cents each)- $6
Shipping on bags/staples- $15
Free chicken to 2 assistants for a full day help- $30
Ice, Bleach, Apple Cider Vinegar- $20
Butchering Costs Estimate- $293.40

Before Labor from farmers- total costs using the LOWEST of the ranges: $1413 or 11.78 per chicken. Chickens at about 3lbs would cost $3.92/lb without any labor, and with no additional mark up for any kind of profit. It's not easy  (as much as we enjoy it) to keep chickens healthy and happy. 

Labor Costs:

2 People, at 20 minutes 2X daily for 120 chicken care- 80 minutes of labor (not including labor for day of butchering) per day.
80 minutes/day for 12 weeks (84 days) = 6720 minutes (112 hours)

112 hours at NYS minimum wage of $7.25 = $812

(we do think we are worth more than this per hour and we still don't really take a pay check yet, but for our purposes, let's pretend)

$812 in labor for basic care plus 10 hours per worker for butchering (20 hours total) $145 = $957

$957 labor + lowest possible costs for materials/etc $1403 = $2360 per 120 birds or $19.66/chicken

Average Weight of each chicken- 3lbs 
Price per lb in 2013- $5
Total cost to consumer: $15

Obviously, we charge less than the labor costs. Essentially, Kim and I are paid 50 cents each, per bird we grow for 12 weeks of labor, to keep costs lower for customers. If we are paid $120 for a batch of chickens, for 132 hours of work is 91 cents per hour for us both. 

That works out to be 45.5 cents an hour. 

This is before we factor in transporting the chickens to customers, and/or the farm insurance fees (substantial) to allow for on site butchering. It also doesn't factor in water usage, cleaning supplies, electrolytes, all the fuel, extra time, tools and some other small things (that do add up).

We love chicken, and we do think they are worth raising, even at a loss. And not all of our animals pay so little, or else the farm would be unsustainable. But we still think it's sobering to share the costs of raising chicken ethically and with real flavor!

So how do big farms and agriculture keep prices so low? Well, there are other scholars and farmers who have covered this much more than we have, but- here is a bright 11 year old giving just a preview of some of the reasons...

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