Sustainable Economics– Starting with Chickens Isn’t Sustainable

If you’ve spent any time in the world of sustainable farming folks, you’ll hear tons of stories about raising chickens and/or their eggs.  A lot of people into this type of farming love them some chicken-raising.  However, it’s just not sustainable at the medium level of several hundred birds/dozens of eggs a week.  This is a pretty interesting postmortem for a chicken-centric operation, Soul Food Farm, that is now at hobby/homestead levels of production.

A huge problem with Soul Food Farm was starting with chickens.  From there numerous other problems flowed.  Starting with chickens is absolutely fatal to a small-scale operator. I am distinguishing backyard chickens from small-scale farming efforts here.  Having a few backyard chickens is fine and generally pencils out ok for most people.  The problem comes in scaling up.  Like vegetable farming, people get excited about the high per-unit profits (wow, 20/25/30 dollars a chicken!!!) and fail to understand the economics coherently.

Chickens are tiny, all current models of production for wider sale are industrial to some degree, and the labor to profit ratio is pretty poor until you are producing thousands of birds per week or so.  At that hundreds of birds per week where most sustainable types get to and crash hard, you’re generating a decent cash flow, but you’re suffering the worst ratio of labor to effort and also have most of the same high fixed expenses as the people with 10k+ chickens for sale each week.  But because those small farmers start with a few chickens, they get into buying more and more birds and doing a lot of the care inefficiently and not really catching up to the problems until they are overworked, exhausted and unable to afford to stop when disaster hits.  

Whether it’s free ranging pastured eggs or broiler production, chickens are the kind of livestock where you really have to go big or go homestead/hobby level if you want to still be in business at the ten year mark.  Fifty chickens to clean up after your family cow is manageable.  Five hundred, not so much.  And it really seems to be an artifact of starting with chickens, not so much having chickens around.

In the specific case of Soul Food Farm, the high labor requirements of focusing so much on chickens left them unable to deal with issues like arson and non-animal predation.  In one of the articles mentioned in the postmortem up above, another chicken-specializer mentions losing 25k of cash value in chickens to theft– given the arson that destroyed much of Soul Food’s production animals, it is very likely theft was a potential obstacle they had to cope with as well.  That is of course another reason chickens are bad to start with at this level.  Petty theft of a dozen here, fifty there and suddenly you have mysterious 25% or 30% losses, destroying your margins.  And again, chickens are tiny, and the pasturing model makes it just difficult enough to keep track of hundreds of birds that it would be quite possible to miss small occasional thefts that added up over time, separate from animal predation issues that are also potentially margin-wrecking at that scale.

Where we live there is, for example, occasional theft of firewood where people live off busy main roads, to pick something that is also easy to run off with small amounts of, but which adds up to a problem for the families losing it over time.  With thousands and thousands of birds, those losses aren’t either as damaging or as likely due to how one has to manage that volume of birds.

My husband and I were discussing the postmortem for Soul Food Farm, because there was a lot going on there and it really did seem to us that it kept coming back to starting with a high-labor, low-margin animal that is hard to protect.  And we were thinking of examples of people who started with chickens and everyone we could think of scaled back or went big.  Chickens are a great add-on animal, but they don’t seem like they work out so well as a primary farm product unless you go into some high-volume model.

 

Duck Math, Lessons Learned

The ducks are past 18 weeks and now laying 1-2 eggs a day, so we don’t have to buy eggs right now and may not have to through winter.  We are ok with moderating our intake to what they lay and next year storing any excess when we get our first full laying year.

The big lesson for us was that at this little homestead level, there is no point in buying ducklings.  It was great to learn how to raise them and go through the basic process, but the cost of starter for just a few ducks is more expensive than buying someone else’s grown ducks who specializes in selling adults.  Freshly hatched from the feed store, each duckling ran us 9-10$.  We could have bought three or four guaranteed laying adult females for 15-25$ each in late spring and already had eggs for months.  And the cash value of a dozen duck eggs is pretty high, so it would have penciled out within a few weeks.

I am not sure it will pencil out this year, it depends on if we start getting 3-4 eggs a day and if the ducks will lay through late fall and early winter.  It is no loss, though, the ducks will have paid for their costs of purchase and feed by spring.

I think it’s just surprising sometimes that there is a justification for letting others specialize even at relatively low levels.  But then again, specialization has always been a part of homesteading, farmsteading and farming.  It’s just hard to remember with the media promotion of mixed-use farming as if it doesn’t also require some specializing.

Sustainable Economics– Asking the wrong questions about organic food production

The Atlantic brings us an example of industrial agriculture setting the agenda.  It is completely true that you can get higher yields with GMO crops using industrial production methods versus going organic or sustainable with those same crops.  GMO corn, soy and wheat are not the only things humans need for complete nutrition, yet we are expected to embrace industrial production because it is still producing high yields of those crops.  Industrial production doesn’t work so well on potatoes and other root vegetables, or perishable vegetable crops.  Industrial organic is obviously not going to be as good as specially subsidized, cheap-energy fueled industrial non-organic.  And the much-praised industrially produced ‘golden rice’ is not yet proven in its task of supplementing a crucial vitamin.

Genuinely sustainable production is mostly regional, mostly adapted to the climate of the given region, can include organic methods, but it’s not mandatory, and is often more labor intensive. This can be limited to ramp-up with many things, though, and then it can be much less labor-intensive on an ongoing basis.

Energy is already a lot less cheap, and those much-trumpeted industrial yields are not as reliable as they once were believed to be.  And when you account for soil fertility issues, runoff damage, lower nutritional value and a complicated subsidy environment propping up farmer incomes in wealthier countries whether they actually produce or not, those absolute yields look very different.

I can’t figure out why people keep getting suckered into this trap.  It is a trap, because you can’t win if you are playing on the industrial field, with industrial help.  It’s obviously not going to get the same results.  But humans are not corn/soy/wheat machines, we need to eat other stuff, and industrial agriculture is not conclusively better or higher yielding for much of that more essential stuff.  People supportive of organic and sustainable alternative agriculture methods and practices really shouldn’t be allowing the industrial standard to predominate the discussion.  It’s just so insidious.  Diversity is key, not building up an ever more elaborate edifice of one-crop agriculture.

Getting past an entitlement mentality in sustainable farming

Courtesy of that farmer I mentioned yesterday comes yet another grist special about farm financing.  I dunno, I see these articles around and about a lot and what it boils down to is that people seem to expect tens or hundreds of thousands (or more) for business models that aren’t likely to pan out.  Like, there is a 5 acre ‘farm’ mentioned in the comments that had trouble getting farm financing.  That ‘s not really a financially viable farm size.  It is fine as a homestead or a hobby, but not a working farm, as a solid rule of thumb.

I do think there is some valid critique about lenders not being open to mixed-use, more diverse farming models, but it’s hard to see past the entitlement mentality.

My husband and I are getting a little homestead together and if that goes well, we’ll try to farm for real, but we worked really hard to save up some reserve to buy equipment, stock, etc. and I never see anyone mention that. It used to be (at least where I grew up) that a farmhand (which is what ‘farm manager’ means in practical terms) who wanted their own set something aside over years until they had some kind of down payment or reserve for equipment/seed/etc., even if they were mostly living off room/board and very small wages. They didn’t go around crying that the USDA wouldn’t lend them the money. But, that was a couple decades ago. Now nobody thinks you need savings to do anything, I guess.

Local Foodshed Spotlight– A Successful Everett Area Pig Farmer

Sustainable farming has many more successful, thriving farms than just Joel Salatin’s.  There are lots of farms making enough profit to keep going and pay down or even pay off infrastructure, and some of them are local to me.  Yes, even in the regulatory nightmare that is Puget Sound, there are farmers making it happen.  One of them is a local pig farmer, Bruce King.  He is on my blogroll, and writes the most fabulously cool posts about the nitty gritty details of farming and navigating the regulatory maze in Snohomish County.  His latest post as of this writing is about wetland regulations and how they have placed local farmers in a Kafkaesque bind.

When he’s not writing about regulations, he’s writing about his very clever methods of squeezing revenue out of the unlikeliest places, like being able to make money off the pallets he uses to feed his pigs grocery store delights such as slightly bruised produce and excess dairy.  That sort of round-the-corner thinking is pretty important for a farmer.  A certain inventiveness tends to separate the successful small farmers from the ones who work hard but ultimately go out of business.  It indicates adaptability, which is absolutely crucial for smaller-scale farming.  By all accounts, his pork is good stuff and I hope to actually succeed in buying a pig from him one of these days.  I tried while pregnant with my latest child, but pregnancy hormones, moving out here to the country and various other stuff conspired to have it not work out.

But dude has a lot of pigs to sell, as his operation has grown and matured over the years into a steady, going concern.  I feel that one will turn up when we’re ready to get a pig or two for the year.

Cool farmer, awesome blog, happy animals.  What more could a locavore need in a regional foodshed?

Changing the language– new terms for animal husbandry

One thing I think sustainability advocates need to move away from is the false dichotomy of CAFO vs., say, “free-range”.  In terms of sustainable farming, the focus should be on husbandry, and whether a given practice is good or bad.  We need farming operations covering hundreds of acres (like, you know, beloved Joel Salatin’s operation) to actually feed everyone without resort to 100k acre industrial farms.  And we also need to accept that confining animals is not necessarily harmful or unhealthy for them, *in the proper context*.  For various reasons, many breeds of livestock are pulled from pasture into stalls in a barn to birth.  This is not actually bad if done with an eye to good husbandry.  There are good ways and bad ways to provide a birthing-place for an animal, and sometimes an operation with hundreds or thousands of animals can have excellent husbandry practices and an operation with a dozen animals can have absolutely awful husbandry practices.

But resorting to the term “CAFO” to mean “large farm operation, probably with bad husbandary” doesn’t allow customers and would-be farmers the opportunity to understand that you can have lots of animals and still treat them well.  It instead paints the false picture that you have to have a micro-farm to offer good husbandry to your livestock.  That’s not real and is a big obstacle to helping would-be farmers gain the tools they need to sort out good practice from poor practice.  I am sticking with good and bad husbandry, and moving away from a reliance on terms like “CAFO” to represent farms with bad husbandry practices.  I can only hope others will do the same.

 

Sustainable Economics– When farmers fail math

I don’t know how often I will do this, but I’d like to start an occasional series on the nitty gritty economics of sustainable production.  I think a good start is noting some of the problematic aspects of current models of sustainable farming.  Today is looking at a bit of math fail from a sustainable farmer.

This farmer complains about “suits” at banks not advancing financing while admitting they don’t have the cashflow to cover a conventional loan’s terms and that they rely on customers for “loans” which are really gifts or agreements for deep discounts.

There’s some more in the linked article, but the valid points (that farming, being cyclical, needs to have that cyclical nature considered in financing models and lending small sums is sometimes loss leading even in fairly small regional/local banks even if the loan is repaid on schedule) are a bit lost due to the whining and refusal to be professional on the part of some farmers when this issue comes up.

Lending with repayment on a quarterly or trimester schedule is not exactly way out there in terms of business lending, but works pretty well with the cyclical nature of farming and is not quite as overwhelming to the farmer as semiannual repayments would be.  And local banks could band together and create a farm loan pool for all farms in a given region to slash their servicing costs.

But you’ll note neither of these things is in the article, despite it being an article about small farm financing difficulties.  This is altogether too typical when the topics of small farming, sustainability and economics are discussed in the media.  The article also doesn’t discuss the craziness that is borrowing from your customer base.  Here’s a hint– if you have to borrow from your “customer base”, you aren’t charging enough in actual prices to cover your expenses at a minimum, much less enough to cover your expenses and then draw a salary to live upon.

Having said that, it is not beyond the pale to have investors who started out as customers, or to work out some kind of communal-ownership arrangement.  But the article isn’t really dealing with unorthodox, inventive, or alternative business structuring.  It’s trying to argue that sustainable farmers shouldn’t have to worry about crazy things like profits and returns on investments.  But they should, like, be able to get loans on any terms that suit them and customers should both buy their products and give them money, just because.

If you support the “sustainable” in “sustainable agriculture”, it’s important to demand that farmers treat their enterprises as real businesses with real business obligations.  Professionalism matters.  Sloppiness kills, not just animals, but economies too.  We can’t get away from the industrially centered agricultural economic model so long as customers support sloppiness and laziness about the financing details from small, sustainable producers.  It is quite simply not sustainable, lasting, or real.  And more than farming techniques, the economics need to be there for sustainable agriculture to be a feasible alternative to industrial agriculture.  And that means dealing with the hard math and working to turn a profit and cashflow enough to justify financing support.