Friday, March 11, 2016

Farm Profitability in 2015 & 2016 Plans

Sorry it has been so long since I have posted. The lack of Internet in our home has put a real damper on blog posting. 2015 went pretty good for us. Janice already posted about this already, but I think it is important to discuss. We did our taxes and posted only a $200 loss on the year. In eight years of farming, this is the closest we have come to showing a profit. Before mileage, insurance, power, and water, we made $6,000 last year, with total sales around $18,000. This is an increase over the last several years by around $4,00 to $3,500. Sales by product looks like 40% beef, 35% chicken, 25% turkey, and less than 1% eggs. We did this without any lamb sales, since we phased that product out, and with a 25 percent reduction in the number of meat chickens.

2016 Production & Delivery Schedule

Chicken production was cut back for several reasons. With the move last year, our production season got started about 4 to 6 weeks late. This cutback on the number of deliveries we would normally have done by cutting out June and the first half of July. This meant a lot less cash coming in early, and not enough cash flow to afford to raise 90 more chickens late in the season. I hope to move our chicken production back up to previous years levels. As of right now, my availability of chicken in the freezers is close to running out. Profitability on chickens went up as we started be able to offer individual cuts and I would expect us to continue to do that in the future. We may offer chicken breast as two per package instead of four, and offer chicken drumsticks at six or eight per package instead of for.

Turkeys treated us well. We had some of the best mortality rates we have had in years. I think that 50 birds may be just about right for us. We did not do Pickett Fence Creamery Thanksgiving Sample Sunday for the first time in seven years, but added turkey delivery to Farm to Folk in Ames. With the switch to GMO-free feed and subsequent price increase to cover that change, it would seem that our turkeys are just too expensive for that market to bear as we saw a massive drop off in sales there in 2014.  I have been very pleased with our smoked turkeys, since they are now sodium nitrate and nitrite free, but the big challenge has been getting the locker to let me bring them in. This has been very frustrating to me and I have customers who want his product, but I can't get the locker to do the job. Putting poultry into the lockers smoker, precludes red meats, and requires the smoker to be completely cleaned out once complete.  I will continue to work on this and look at other options.

I want to see improvements in our egg sales. We have demand for eggs, which we are not meeting. Right now we have the same old seven hens that we have had for years. The big bearer is building a new poultry structure. I am working on plans to build a nine-foot by thirteen-foot structure this spring and summer. The odd size dimensions are because that is the largest structure we could squeeze into the desired space. The building will accommodate 30 to 35 layers and will place the access doors in the cattle lot, which should help reduce fly numbers. I currently have chicks scheduled to arrive in June, which means we won’t really start to see eggs until around Christmas. The process of ramping back up on eggs is unfortunately a slow one.

Beef has finally really come on in 2015. We processed 4 animals and sold two older bred cows. We are now to the point where we are creating a pipeline that will let us process four animals a year, and sell a small amount of breeding stock each year. I am looking at selling off at least two young heifers this year to keep out cattle numbers inline with our available forage.

Calf Born Today

Calf Born Five Days Ago

Part of profitability is also watching costs. We spent too much on hay this year, having to stop grazing and feed hay in the summer is killer. In the short term, I have been clearing brush and “weedy” trees from the pastures and broadcasting clover seed on the pastures in an attempt to frost seed. It has been very warm here this spring and we have not been seeing freezing temperatures at night in March, which is unusual. In the longer term, I am looking at the possibility of trying to “reclaim pasture ground” across the road from me that is so badly overgrown with “weed” trees that some locals call it the “Jungle.” I am still searching for cheaper ways to get the protein side of our GMO-free poultry ration, but I have yet to find something that I am confident will no reduce product quality. I would love to be able to reduce the price on our poultry and I will keep looking for a solution.
I am exited that the house construction is largely behind us and that we get to start a year on our new farm. I want to try to improve our communication with our customers. This has definitely suffered with the move, the uncertainty, and lack of reliable Internet at home. I am excited to see all of you again and wish you all a happy spring.

One of ManyBrush Piles Cleared This Winter

Post Burn