27 January 2015


I normally eat two chicken eggs each day for breakfast, so I mainly buy the sixty-count packs of eggs since bulk buying stuff like this gets the best price.

Or at least it did.

Recently I walked into one of the grocery stores near where I live to get one of these packs and discovered that the price had gone from $8 to nearly $12 since the last time I had purchased one.

As far as food prices go, .20 cents per egg still isn't bad, but a sudden fifty percent jump in price did give me a jolt. Then when I discovered with the help of the calculator on my cell phone that the price savings per egg of those sixty-count packs versus a one-dozen carton was only .0076 cents per egg, I foamed at the mouth a little.

I went home and put the question to my friends and acquaintances on Facebook: what happened to egg prices? Chicken Armageddon? Egg trucks crashing on icy roads? A poultry general strike?

Then I got the answer I was looking for: blame California.

"The state that consumes the most [eggs] is California, where new animal-welfare laws concerning egg production kicked in on January 1. From now on, all eggs sold in California must come from hens that live with enough space to stand up, fully extend their limbs, and turn their bodies around. That translates to at least 116 square inches of floor space per chicken, according to NPR.
The vast majority of egg-laying chickens in the U.S. do not live in conditions like that." -- Svati Kirsten Narula
The California egg market is so big that changing the law in that state drove eggs prices higher across the U.S. due to the response it necessitated on the part of commercial egg producers: make capital expenditures to give their hens more room, reduce their flock sizes to create room, or both.

I sensed opportunity!

For some time now I've been wanting to get my own hens and produce my own egg supply. I had it in mind to keep just a couple, enough to keep up with my typical egg consumption. My thinking was to keep three hens around for this. That would likely cost me more per egg than just buying them at the grocery store, but if you've ever eaten farm eggs, you know that in terms of flavor the store bought eggs just cannot compete. Add in the increased food security of having a renewable protein source right in your back yard and it's easy to justify the added cost.

It has been my intention to "pasture" my chickens, to let them have open ground to forage on in order to reap the benefits of giving the birds a varied diet, improve soil quality on my land, keep insect and weed pests somewhat in check, etc. Various sources I've read on keeping chickens in this manner inform me that weekly access to at least ten square feet of open ground per bird in paddocks that you rotate them through is plenty to keep the chickens, the soil, and the available vegetation all healthy and happy. For three birds, I could accomplish this with just four 5x6' enclosures, totaling one hundred-twenty square feet.

But here's the thing: I have over twenty-six thousand square feet of land at my disposal, almost two-thirds of which is pasture, and right now I'm not doing anything with it (except for mowing in the summer - ugh). Three hens set up as described above would require just .0075% of that land area. What a waste of space!

I began to think that perhaps in addition to feeding myself, chickens could become a small side business. Curious about this possibility, I surfed over to Craigslist to see what farm eggs go for in my area. At present, the most common asking price is $3/dozen.

From there, I looked up the regulations in Washington state on selling eggs, and I found that small producers (with flocks under three thousand birds) selling direct to consumers are basically exempt from regulation (and the business fees that go with that). A quick check of county codes revealed that Walla Walla county is pretty much only concerned with licensing of dogs and not allowing livestock to run wild.

This began to look more like a gainful possibility!

I started looking up going rates for the breed I'm interested in, Rhode Island Reds, feed costs, and packaging (egg cartons), with the aim of establishing an approximate weekly cost to operate this little business. I had it in mind to acquire fourteen hens, enough to supply me with my two daily eggs and a further dozen per day to sell (roughly, because chickens won't lay eggs every single day of the year). I looked at an online seller, eFowl.com, and discovered that I could save a significant amount on my order by buying just one more hen for a total of fifteen. Thus, I arrived at the following numbers:

Cost of hens: $4.76 per bird for fifteen sexed chicks, including shipping. Since laying hens typically are most productive during their first two years and are frequently replaced at that point, that works out to .05 cents per bird per week during their peak productive years, for a total of .75 cents per week for the flock.

Cost of feed: On average laying breed chickens will take six months to mature. Their food needs change during their different life stages, both in composition and quantity, and the needed amount of provided food is variable depending on the time of the year (due to availability of forage). Price of feed changes, too, of course, so I've gone with a high-end assumption of 1.5 pounds of feed per bird per week, at rounded up local feed prices of $12 for a fifty-pound bag. Rounded up, that is twenty-three pounds of feed per week for the flock at a cost of approximately $5.52. I decided not to bother averaging in the cost of feed per week during their maturation phase since I'm also not attempting to discount their reduced feed requirements during the summer when forage is available.

Packaging: Reusing egg cartons when selling eggs to consumers is frowned on, but fortunately they're not very expensive. I also found these at eFowl.com for fifty cents each in packs of ten. If my hens were to produce an egg per day each, after consuming my two eggs daily I would have ninety-one eggs per week, requiring seven egg cartons. Since that would leave some eggs left over, it's easier to extrapolate this cost over two weeks of production, which would get closer to an even fifteen one-dozen cartons required, for a total of $7.50, or $3.25 per week averaged.

Thus, I have a total estimated weekly operating cost of $9.52. I haven't included the capital cost of building the chicken coop and the paddocks because a) I don't have the information handy and b) these will last many years and can theoretically be amortized down to almost nothing if the operation carries on long enough. Typically, the breed of chicken I am considering will produce two-hundred fifty eggs per bird per year,  so roughly sixteen weeks out of each year they will not produce. This lowers packing costs by $52 per year, or one dollar per week, bringing their approximate weekly operating cost down to $8.52.

During the roughly thirty-six productive weeks each year the birds will have, at current local farm egg prices the flock could bring in revenues of $21 each week, for an annual total of $756.

Therefore, $8.52 x 52 = $443.04 annual operating cost; $756 in revenues - $443.04 = $312.96 profit; $312.96 / $443.04 = 70.64% net profit margin!

But, it's actually better than this, because the part I left out is the two eggs per day that I would eat. At twenty-five cents each, I would get fifty cents of eggs per day, or $3.50 worth per week, for approximately thirty-six weeks, for a total of $126 per year. With current grocery store prices costing me roughly $144 per year for eggs, and since I don't have to buy eggs from myself, my actual cost of feeding myself two eggs per day all year long could drop to around $48 (since I might have to buy eggs for four months out of each year, at the current cost of $12 for a sixty-pack purchased each month). I would thus recapture the difference, adding $96 per year to my overall cash flow, putting the annual total profit at $409.

There are lots of variables here, things that can't be predicted, costs that I've deliberately estimated on the high-end, etc. However, given the margins here I can be reasonably sure that I would have to work very hard at making this venture unprofitable to flip these numbers into the red. Looking at it in terms of my original plan to just keep enough hens to feed myself, the operating costs of keeping the birds plus buying eggs to make up for their unproductive weeks ends up costing about eleven percent more per year than just buying eggs from the store. Since I want to keep chickens anyway, I might as well put a little more effort into them and make a profit while I'm at it.


20 January 2015

"Mining" For Silver On My Couch

Yesterday while I was having a slight cabin fever attack (I'm home a lot since this time of the year slows pest control to a crawl at my latitude), I decided to take care of a gaping hole in my home defenses: I needed a safe. Going forth and hunting around the area for one got me out of the house in a constructive way.

What I mostly found was either way beyond my needs (huge safes priced in the thousands), or metal cabinets so pathetically flimsy that an intruder could pry open the door of one and escape with its contents long before myself or another could arrive to respond with lethal force. 

But at one location, almost the last one I visited, I found a real, fire resistant safe with a dial combination lock that was marked down hundreds of dollars from its MSRP because of a few scratches. I saved big because of something I can fix with a few pennies worth of paint (if I could be bothered to do so). Somewhere, there is a shipping insurance company that is hating life. 

With my new safe loaded up, I started on my way home, which included a stop at one of my banks to empty my safe deposit box of the silver I've had stored in it for a few years. This was a big part of the reason I sought out a safe: events can transpire that lead to depositors not being able to access what's theirs, be that because of massive banker and .gov incompetence, natural or man-made disasters, or even outright theft of safety deposit box contents and other accounts by chronically indebted, criminal governments

While I was at it, I decided to take out some rolls of U.S. half dollar coins to see if I could locate any that contain silver. The branch had $90 worth available, so I took them all. This is something that I've done before with success, and similar to my relatively new hobby of collecting big gains simply by hanging onto pre-1983 U.S. pennies. I need to have some cash on-hand at home in case disaster strikes and my bank accounts are not accessible, so if I failed to find any silver coins, I could simply hang on to the rolls for that purpose.

I haven't done this much since the first time I tried it and blogged about doing so back in 2012, today being only the third time that I can remember. Perhaps I should try it more often though, because just like my first attempt at it, this time there was another silver coin hiding among the fiat junk: this 1969 piece, which at the time of this writing has a melt value of $2.65. That's a 430% gain with zero risk simply for finding the coin. 

It has now joined my other silver holdings, including the 1967 half dollar coin I found a bit over two years ago. This is fun to do, and always worth it when you manage to find one of these coins, but it is only going to get harder and harder to do so: lots of other people have been sorting through these coins for years and taking them out of circulation just like I have. For building security with precious metals, this is not the way to do it, simply because you won't find enough of them to acquire a meaningful amount of silver. Instead, you should buy it from dealers like I also do and treat this kind of acquisition as supplemental only.

10 January 2015

Unwind Social Security Or Face The Wrath Of Ida May Fuller

In a Facebook group I recently learned of and began following, Natural Rights Libertarian, I saw a post the other day the admin created that briefly told the story of Ida May Fuller, the first person to receive payouts under Social Security. Ms. Fuller worked for three years after payroll taxes had been instituted to fund SS before she retired at age 65.

Ms. Fuller's total contributions into the system, over three years, amounted to $24.75.

Her first monthly check was for $22.54. 

Uh oh.

Ms. Fuller went on to live another thirty-five years to the ripe old age of one hundred.

Oh crap.

Ultimately, Ms. Fuller ended up collecting $22, 888.92.


Now, there's absolutely no way that returns from any sort of investment could have turned such a pittance into such abundance, especially when the funds are in the hands of .gov morons. The only way this was possible is due to the true nature of SS, that it is a "pay as you go" system in which funds stolen from today's workers are paid out to workers who were stolen from yesterday. 

Sometimes this can result in a surplus of funds, say if there are more workers today than there were yesterday, retirees die before they receive back from the system an amount at least equal to what was stolen from them, etc. 

But if it's all going the other way, more retirees than workers, people living long enough to collect far more than was ever stolen from them, etc., any surplus that might exist is going to be exhausted, and in the absence of one the inherent problems with the scheme will become apparent that much faster. When there's no surplus and also not enough funds coming in to pay the full amount of what has been promised, the real fun begins.

It's funny how the first recipient of SS turned out to be an extreme "canary in a coal mine" example of the flaws built into the system from the get-go. And it's too bad that the warning wasn't heeded.

On top of that, start adding in recipients who never even contributed anything to the fund and you've thrown gasoline on the fire.

So that's why when .gov gave us working stiffs a 2% SS tax holiday during 2011 and 2012, I put all of that money aside into a retirement account. It's growing, steadily increasing the income being generated from the equities I have those funds invested in. The SS tax holiday has been over for several years now and is unlikely to ever return, so for now the account is growing only under its own steam; I am not contributing any more to it at this time.

On that note, within the thread on the Natural Rights Libertarian group that inspired this post, and what is ultimately the topic here, is this:

This is one of many proposals that are out there to officially and permanently do with SS what I did personally and temporarily. You can click the link to read the full details, but in short, it proposes that the system be split between its present state and an arrangement similar to what I've done, with individual worker choice being the deciding factor in which of the two options comes to dominate. Based on the experience of others, it's highly likely that most would join the private system, and attrition would wind down the old, dysfunctional system over time.

Something of this sort needs to happen, otherwise the millions of Ida May Fullers appearing on the horizon are going to ruin us.

08 January 2015

The Attack on Charlie Hebdo

Gun ownership in France: http://www.gunpolicy.org/firearms/region/france

From the above, under the section entitled, "Right to Possess Firearms":
"In France, the right to private gun ownership is not guaranteed by law."
Translation: In France, private gun ownership is hindered by state authorities.

Problem: People who don't follow laws are not hindered by laws.

Result: "It's A Butchery" - 12 Killed In Terrorist Attack On French Satirical Magazine Charlie Hebdo: Live Webcast 

How yesterday could have turned out if the French state had not been putting good people at a disadvantage against bad people:

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