Numbers involved in egg production surprising to small Colo. farmer — perhaps to others
March 8, 2014
Cost Per Dozen Eggs
Buying, raising a chick $0.56
Shelter and yard $0.67
Mobile tractor $0.33
(With packaging) $12.07
Source: Bill Hyde
Percent of Budget for Food and Health
1950 1970 2010
Food 19% 11% 6%
Health 4% 7% 18%
Total 25% 24% 26%
Source: Calculated by the Economic Research Service, USDA, from various data sets.
I'm an old new farmer.
With no family or personal background in farming, my wife and I bought a 7-acre property just north of Denver four years ago, when I started raising chickens for their eggs. We added turkeys and ducks, pigs, and goats and sheep, as I fenced some fields.
I decided at the outset of my farming experience to keep detailed records of my farming costs.
The most comprehensive data I have is on egg production. I considered ten cost items: buying and raising a chick to egg laying age, shelter and yard space, food, mobile tractors, utilities, labor, packaging, transportation, land and supplies.
I have between 70 and 100 chickens at any time.
For each item I calculated the cost of producing a dozen eggs. I amortized expenditures where appropriate, for example, building the chicken sheds.
By way of illustration, the first cost item in Table 1 is buying a chick and raising it to egg laying maturity, which is six months. The total cost then is distributed over the eggs that the hen is likely to produce. The calculation is as follows:
I buy 25 or 50 day-old chicks at a time for a price of $3.20 per chick — the feed for six months is $10.80 per bird, so, the cost so far is $14 per bird.
Mortality is about 20 percent. For me, it is generally higher. Some operators have lower rates of mortality. So adjusting for mortality ($14 x 120 percent = $16.80), the cost for a ready-to-lay chicken is $16.80.
I can expect 240 eggs (30 dozen) during its one-and-a-half to two-year productive life. So the $16.80 amounts to $0.56 per dozen eggs. Similar calculations are made for the other items.
The overall result of about $12 per dozen eggs is surprising.
The biggest cost is labor.
I imputed a value of $10 per hour. That may be a lot if an 8-year-old boy is collecting the eggs, but it is modest pay for a farm hand, and hardly exorbitant if you want a reliable, independent worker who is responsible to do these chores every day. The person needs to open the shed and coop, move and open the mobile tractors if in use in the early morning, collect the eggs in the afternoon and clean and package them, and close the chicken structures at dusk. These tasks take about an hour and a half per day, which amounts to $15 in labor for about three dozen eggs or $5 per dozen.
The second biggest item is feed.
I buy non-corn, non-soy, organic feed in bulk from a Nebraska farmer, which costs three to four times as much as conventional feed.
Mobile tractors are used during the growing season to allow the birds access to fresh forage every day. I used to have them run free, but after a fox attack in which I lost 30 chickens, I had to come up with a better plan.
The entry for land often prompts questions. People will say that I use the property as my home and that I shouldn't treat it as an expense. Others will say that my land will appreciate, which it may, but it may depreciate. My ultimate answer is that I certainly could have bought a house with much less land and paid a lower price. The money I would save by doing that could be used for something else. I impute a 3 percent return on land priced at $30,000 for one acre. The issue could be argued on both sides for a long time, but I did feel that it was important to at least have some conservative number entered and to recognize that the birds need green space for foraging. The annual amount is $900 divided by 1,050 dozen eggs.
The chicken sheds are priced at $6,000 apiece. They are 10-feet by 12-feet cinder block structures with Solexx paneling to allow sunlight and heat in. Attached to each shed is a 400-square-foot or larger area enclosed with chicken wire on sides and top (to keep owls, hawks, and raccoons out). Each shed houses 30 birds comfortably, and I amortize them over 20 years.
There are a few things missing from the cost table above.
I have no item for marketing. With a great product, word of mouth is more than adequate. Once a few people know about the eggs, word spreads.
The packaging item is in brackets because my customers recycle the cartons although it is against Colorado law to re-use a carton.
Transportation is understated. The cost includes only the cost of driving into town to pick up restaurant food waste twice a week — it does not include delivering the eggs to a CSA or elsewhere.
Another missing item is an entry for profit. Every business, if it wants to remain in business, should generate a profit. Since I am subsidizing the cost of my eggs by 50 percent (I sell them for $6 per dozen), profit is a long ways off.
OPINION: Where does this leave us?
Some people will say that they can't afford to pay $12 for a dozen eggs. Yet, people in the U.S. pay far less for their food than anywhere else in the world.
In the U.S. an average of 6.9 percent of the household budget is spent on food. That is far less than most places. If we doubled all food prices (including paying $12 for a dozen eggs), we would pay about what the Japanese people pay for their food, and they don't seem to be particularly malnourished or poverty stricken.
So, as individuals and as a nation we need to consider what quality of food we want to consume and if we are willing to prioritize for it. If nutrient-dense quality food costs a lot more than we conventionally have thought, many of us will have to make compromises elsewhere, in housing, transportation, recreation and employment to afford real food. ❖
Bill Hyde writes from his small farm — Happy Farm, LLC — in Colorado.