Sunday, June 1, 2014

Non-GMO Conversion

We polled customers this spring and they said overwhelmingly that having a non-genetically modified (non-GMO) ration for the poultry was very important to them. We listened to your feedback and talked with the farmers that mix our feed and together we set out to build a ration that is free of GMOs (the most common GMO soybean is also known as Roundup Ready).

Customer Survey Results

Until this year, our ratio has been primarily composed of open pollinated non-GMO corn and purchased soybean meal. Although it is possible to buy non-GMO soybeans, it is much much harder to find non-GMO soybean meal. The real problem with soybeans is that you can't just throw them into a grinder-mixer, you have to roast them. Soybeans have to be heated to break down enzymes that make it hard for mono gastric stomachs (Chickens, Turkeys, Pigs, Humans) to absorb the protein in them. This roasting process is usually done at very large facilities and creates a system where farmers sell their beans on the open market and buy back this generic roasted product. In the US, 85 percent of of soybeans are GMO, so it is easy to see that most of the soybeans in the purchased meal was likely GMO.

Chickens on Pasture in Recently Constructed Pen

To get around this, we will be using soybean meal that is made from food grade soybeans for human consumption. There was an exhaustive search done to investigate where a roasted non-GMO soybean product could be located and that list was very very short. The resulting change is not a cheap one. Generic soybean meal used to run $450 per ton and the non-GMO version comes in at over $1000 a ton. In other words, our feed has gone from $0.20 per pound to $0.33 per pound.  Our birds are eating right around four pounds of feed per pound of gain, resulting in a cost increase to produce the birds of $0.52 per pound. With high chick prices and a bump in locker fees, we must raises prices to try and preserve the small margin that already exists on our birds.

The change resulted in a $.60 rise in chickens per pound, a $0.50 rise in turkeys per pound. Our eggs have been sold at a loss for over a two years now, so we moved to correct the price and roll in the added feed cost with a $1.00 increase per dozen eggs.

Whole chicken: $3.90/lb
Cut up chicken: $4.10/lb
Large eggs: $4.50/doz ($4.00/doz with return of our clean container)
Medium eggs: $4.00/doz ($3.50/doz with return of our clean container)
Whole turkeys: $4.25/lb
Smoked turkey halves: $7.00/lb

Cattle and lamb prices will not change, as their diet is already GMO free and they do not eat grain. Demand for lamb has been very soft and we are strongly considering phasing out lamb over the year. 

Despite what the customers and my wife were telling me, I must admit that I am terrified by this price change. It is a massive shock to our system financially on the front-end of this process. I can understand that some customers might want to retract their orders. They are welcome to do that, and I would not hold that against them. As I see it, this is a leap of faith. We are taking the first step. 

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