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.
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.
Therefore...
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.
Therefore...
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