Pasture Raised and Grass Fed on Stony Brook Farm

I guess I am in a crusading mood because I am going to go on another rant this morning, based again on something I heard at the Cornell Swine School this past Saturday.

It is widely known and becoming something of a cliche that industrial food prices “don’t reflect the true cost of raising food,” for a number of reasons: because a lot of those costs are shunted onto the public in the form of externalities like pollution, and because of low wages paid to farm workers and low prices paid to farmers, and subsidies, to name a few. For example, nitrogen run-off from industrial grain farms is one of the largest sources of water pollution in the country. If industrial farmers were forced to use nitrogen fertilizers that are less water soluble and/or that are formulated to be more completely absorbed by the plants, their costs would be substantially higher, and therefore food prices would be higher. In addition, rapaciously low wages on industrial farms keep costs down. Just wages paid to pickers and packers would substantially increase the cost of industrial food. (For information on picker wages, see the Coalition of Immokalee Workers) Also, rapaciously low prices paid to farmers, especially factory livestock farmers, help keep industrial food prices low. Finally, industrial farming is heavily subsidized with public money. It is clear, therefore, that the cost of food is higher than what we currently pay.

However, I believe very strongly that the current cost of local food, primarily meat, poultry, and eggs, is as dramatically and artificially high as industrial food is low. Note just for the sake of being thorough that people think that local vegetables (and fruit) are a lot more expensive than industrial, but, on average it is actually not the case. In August, for example, you can usually get a cucumber at my friends’ — who are full time farmers — farm stand for less than you can at Wal-Mart. When local vegetables (and fruit) are more expensive, it is usually by less than 50%, and very often less than 25%. Part of the problem is that many supermarkets charge by the pound for things like lettuce whereas farm stands generally charge by the piece for things like that, so on their face supermarket prices seem lower. The reality is that a big head of supermarket romaine at $0.69/lb is actually more expensive than a big head of local romaine for $1.50. Local meat, poultry, and eggs, however, are dramatically more expensive than industrial, often two, three, or even more times so. Are these dramatically higher prices legitimate, in the sense that they reflect the true cost of raising that food?

No, they are not, for a number of reasons: local farmers are unwilling or unable to scale up to reasonable production levels, so they compensate for low volume by charging exorbitantly high prices to get their cash flow up, local farmers demand extortionist profit margins (but, remember, their volume is low, so they are still barely making it), and the local niche premium is very high and is rooted very firmly in the b.s. rhetoric of the “true cost of raising food.” This is not to say that raising meat, poultry, and eggs on a small local scale is not more expensive than on an industrial scale. It is, and no matter how streamlined, no matter how efficient, it always will be. Livestock farming is one area where economies of scale and industrial efficiencies are incredible.

The next time you talk to your livestock farmer, ask him or her what their production volume is. You might be surprised to find out just how many local farmers are finishing just a dozen or two pigs (or even a few dozen), a few hundred chickens (or even a thousand), and/or a couple of cows (or even a dozen) per year. Based on reasonable prices, cash flow on that volume is extremely low, and the cash flow requirements of fixed costs especially like land, buildings, and equipment is very high, so those low-volume local farmers charge outrageous prices to bump up their cash flow. Also, farming needs to be worth it for the low-volume local farmer, so in addition to charging high prices to get cash flow up, he also demands what amounts to an extortionist profit margin. The going rate for a whole or half pasture-raised pig in my area is about $3.50/lb hanging weight (you will find even higher prices). At my current cost of production ($1.50/lb hanging weight), at that price I would make $300 per pig, or a 130% profit margin. With that per pig profit, it makes it worth it for a part time farmer to finish only two dozen pigs a year for a net of $7200. A 130% profit margin, however, is totally unreasonable, it is, as I said, extortionist.

Furthermore, consumers of local food have been totally swept up in the rhetoric of the “true cost of raising food,” and so they are willing, and some even happy, to pay substantially higher prices for local meat, poultry, and eggs. They unflinchingly believe that the prices they are paying are honest prices, not extortionist prices. Wake up consumers! The model you have bought into, based as it is on extremely low-volume farms, is not priced honestly and it is not fair, especially to people with limited means, who would very much like to purchase local meat, poultry, and eggs, but cannot afford it. The price you pay is not at all rooted in the cost of raising those animals, it is rooted in the cash flow and profit needs of low-volume farmers. Let’s use my current cost as the “true cost” to raise a pig — $225. If the “true cost” to raise a pig is $225, and the price charged to customers is supposed to reflect that true cost, what are farmers doing asking those customers to pay $525? I don’t know how long it takes other people to raise their pigs, but last year, when I only raised a dozen pigs, on average, there were nine hours of my labor in each finished pig, and last year I was hand feeding the pigs three times per day, a labor intensive way to raise them. At a $300 net per pig, therefore, I would have made $30 per hour. If I raised two dozen pigs, like the hypothetical farmer hanging around this post, it would have required no additional labor, so I would have made $60/hr!

I believe very strongly that farmers should make a good living. I think they should be comfortable. I don’t think they should struggle financially at all, although that does not mean they shouldn’t have a budget they need to stick to. Farming takes skill, lots of hard work, and involves substantial risks, both financial and physical, and farmers should be amply rewarded for those things. I think it is not unreasonable to ask that a full-time farmer be paid $40,000 per year for her efforts. Note that, contrary to our popular impression, this salary is actually quite good in our economy. In 2004, thirty-five percent of all New Yorkers in a two adult, two child family could not meet their basic family budget — about $43,000 per year in my area — according to the Economic Policy Institute. Most of those families have two working adults, so what that statistic means is that a substantial percentage of people living in New York earn half or less than half of what I think farmers should make. I think a couple farming together should make at least $60,000.

What I do not think is that farmers should get to this income level by charging extortionist prices. I think the small-scale local farming model should be based on a maximum average profit margin of 30% — not 130%! — which, as far as businesses go, is a very good profit margin. I know a lot of business people that would love to have such a margin. At a 30% profit margin, we should be charging closer to $2.00/lb hanging weight for a whole pig, a far cry from $3.50. What this 30% profit-margin based pricing model means is that small-scale local farmers are going to have to scale up. Instead of two dozen pigs, they’ll have to finish 300 or more, which on a pasture-based farm would take at least twenty to thirty acres. Six hundred pigs at a 30% profit margin given the above cost of production would result in a net income of $45,000 on forty acres in use. Three hundred pigs plus a nice sized flock of sheep, a good sized beef herd, and/or a few thousand meat chickens will get the farmer to $40,000 in net income.

Note, however, that at these numbers, a substantial percentage of the marketing on farms of this type will have to be wholesale — “non-commodity” wholesale — and it is likely that in the wholesale market — even the non-commodity wholesale market — consistently  getting a 30% profit margin will be difficult, if not impossible. Therefore, to maintain a 30% profit margin on average, a premium for direct sales will need to be added back in. For the time being, I have settled on $2.40/lb hanging weight for my direct sales, a 20% premium over the 30% profit margin, which I believe is about equivalent to where prices for meat coming out of the non-commodity wholesale market would end up, after taking into consideration profit for the wholesaler and the retailer.

When the model matures, I think meat, poultry, and eggs will certainly be more expensive than our current industrial prices, but the extortionist prices of the early 21st Century “Buy Local” movement based as they were on extremely low production volume farms will be a distant memory. Meat, poultry, and eggs in this mature model will be broadly affordable, not an exclusive niche for the well-heeled. I think when things shake out and the paradigm shift from our industrial import-export model to a local-regional model is complete, the small farm will look a lot like it used to (and on Amish farms still does), eighty to 100 acres with one full-time and one part-time adult with additional labor provided by family (children) and/or part-time (or full-time if it can be afforded) hired help. The production volume will be in the hundreds and/or thousands per species depending on the species and the mix of species on the farm. A substantial percentage of the farm marketing will be wholesale, but there will be a significant amount of direct sales, at farmers markets, on farm, and via CSAs.

Local meat is more expensive than industrial and always will be, there is no doubt about that, but I think it is time for a little honesty about just how much more expensive it really needs to and should be.

Yesterday I spent an uncharacteristic full day away from the farm at Cornell University for an all day “swine school.” I left at 6:00am after feeding the animals in the dark with the assistance of my trusty headlamp, and I got back exactly twelve hours later. I double fed everybody, so Jen didn’t need to feed any adult animals at lunch time, but she did feed the bottle lambs a couple of times and checked water.

The content of the swine school was excellent, but the most amazing thing about the day was the attendance. There were over 150 people there.  Tro Bui, the Cornell professor that organized the event, called the level of attendance a “miracle.” Two things are clear from the level of attendance. The first is that more and more people are getting into raising hogs (one recurring conversation during the day was that people have had more calls for feeder pigs this year than they ever have before) and those people really want practical information on how to raise them — a lot of people drove quite a long way yesterday to get that information.

The primary reason that I went yesterday was to participate in the open discussion in the afternoon because one of the planned topics of that discussion was the pig marketing cooperative that I am trying to get going in order for NY (and local out of state) farmers to be able to collectively meet the needs of larger buyers. I am very glad that I made the trip to Ithaca. I really enjoyed the three formal presentations, and I really enjoyed the open discussion, but the coop idea is dead in the water. It is clear that that is not the right place for me to invest the considerable time and energy it would take to get it going. The cooperative spirit is sorely lacking in our culture. However, I have not yet given up on the idea of gathering together and organizing the pigs of local-regional farmers for sale to large buyers. My focus now is on another idea I had, the rebirth of wholesale meat markets, but in this case with strict local regional-only sourcing rules. Such an infrastructural choice will mean that the return to the farmer will be substantially lower than if that infrastructural choice had been a coop, but it will nevertheless get local-regional pigs into the hands of those large buyers, thereby substantially bolstering our burgeoning local-regional farm and food system.

While driving home from Ithaca, I thought for a long time about pig farming, primarily pasture- and hoop-building based, specifically in New York, but also more broadly in the northeast. Within the pasture-based pig farming movement, there is a strong preference for heritage breed pigs. They do better outside and they taste better than modern production hybrids. The heritage breed pig story also fits better with the pasture and hoop-building based models than does that of the modern production hybrids. Those models are about less than maximum production; they are about less than total control.

One thing that I thought of while driving was something that I have been thinking for the past few months, since the day after Christmas when I devoured Kelly Klober’s Dirt Hog that Jennifer gave me as a gift. I was extremely frustrated by Klober’s descriptions of buying pigs, either feeders, gilts, sows, or boars. Klober farms in Missouri, which is very much “pig country.” He states at one point that there were three or four purebred pig breeders on a just a few mile stretch of his road. In Klober’s world, when you buy feeder pigs, you go to the breeding farm and select your pigs out of pens, taking only those you want. Similarly, when you buy a gilt or a sow or a boar, you have options. For example, Klober talks about choosing a gilt that is in the top third of her litter, size-wise. Well, here in the Northeast, we don’t live in Klober’s world.

The Northeast, New York, specifically, is very much not pig country. Yesterday at the swine school I learned that in 2007, there were a total of 96,000 pigs (including breeders and feeders) in New York State. One of the presenters yesterday pointed out in response to the size of the New York pig population that there are at least, if not more than, 96,000 pigs in his and the neighboring county alone in Iowa. The statistics also showed that the vast majority of those 96,000 pigs live and die in the confinement system. Only a very small percentage of those pigs are purebred, and of those only a very small percentage are any of the “classic” heritage breeds such as Gloucestershire Old Spot, Large Black, Mulefoot, Poland China, Berkshire, etc., which are currently so much in vogue (and rightly so).

In New York, generally speaking, when you buy feeder pigs or breeding stock, especially heritage breed (purebred or crosses) there is no choice. You don’t select your pigs out of a pen of pigs for sale. You take what you get. If you want two purebred gilts, you don’t choose those gilts, selecting them from the top third of the litter size-wise, or selecting them based on other traits you might be interested in. You just go to the farm and pick up your two gilts when they are ready. You might not even be given the chance to see the sow or boar of your gilts, let alone their litter mates. Why are things done this way in New York? Because there aren’t any pigs in New York. Why pretend there are options when there aren’t any? We aren’t actors, we are — trying to be — pig farmers, and the reality of pig farming in New York is that there is no pig “industry” to speak of as there is in Kelly Klober’s world. There is a smattering of farmers, many of them, like me, new farmers, who have a hodgepodge of pigs that are not being bred or raised industriously, that is, with “systematic work or labor,” with an “energetic, devoted activity at any task,” with “diligence.”

One of the most frustrating realities of heritage breed pig farming in New York (again, also the Northeast, more broadly) is the way purebreds are handled. In this, there is literally no industry at all. Nearly every breeder of the most critically endangered though “popular” heritage breeds — Gloucestershire Old Spots, Large Blacks, Red Wattles — that I have spoken to considers every pig that pops out of the back end of a sow as breeding stock. There is literally, or pretty damn near it, zero selection for quality, either in terms of maintaining a breed standard or in terms of production. If the sow weans eight pigs, five gilts and three boars, then the farmer sells the five sows and the three boars as breeding stock. None of them are culled out to be raised for slaughter because they don’t make the grade. I have even seen runts sold as breeding stock. Can a runt grow up and breed? Sure, of course. Should it? No. I know of one breeder that has a sow that for two litters in a row has eaten half of her piglets. When I asked if the sow would be culled, the breeder said no, that she was still getting four pigs from her. When I asked the breeder if that sow’s pigs were being sold as breeding stock, the breeder said yes. There is no surer way to ruin a breed than by breeding the way we are right now. At some point, we are going to need to wonder after generations of this willy-nilly every pig out of the sow breeding if the breeds are even worth saving — although because pigs are so prolific even a breed that is quite far gone can be quickly recovered with industrious breeding.

On my way home, I decided to embark on a new crusade, a crusade to cultivate a New York heritage breed pig industry, to cultivate industriousness in New York heritage breed pig farmers. Doing so will require infrastructural development. It will require breeder networking. It will require importing animals from other parts of the country and other parts of the world. It will require focused and sustained educational programming.

The number of pigs and pig farmers in New York is on the rise, and many of those pigs are heritage breeds and many of those farmers are heritage breed pig farmers. If this increase is to be more than a fad and less than a disaster, we need to cultivate a cultural commitment to a heritage breed pig industry — to care, to thoughtfulness, and to diligence.

There are just a hair more than 19,000,000 people in New York State. Per capita pork consumption in the US is about fifty pounds per year. That means that on average, the people of New York eat 950,000,000 pounds of pork every year, just shy of one billion pounds, or about 9,000,000 pigs worth — a bit shy of 100 times the current number of pigs we have in the state. If we were to capture just one single percent more of that market for New York raised pigs, the number of pigs in New York would double. With no industry, however, such an increase in market share will be impossible to achieve.

I had my neighbor over yesterday to finalize our lease agreement and to discuss my future plans. The good news is that he has agreed to lease me twenty acres of pasture land for five years with the option to add an additional fifteen acres on a five year lease next year. All together, the good news is that I have access to thirty-five acres of pasture for the next five years. At ten pigs per acre, I can raise 350 pigs. If I push the stocking rate to fifteen pigs per acre, I can raise 525 pigs. There are also about ten acres of woods in between two of those pastures that I could lease as well, although I am less interested in raising pigs in the woods than many people are. The bad news is that my neighbors are ready to move whenever a buyer comes along. Luckily, they are asking for an osbcene amount of money for the place and they are not yet budging on the price, so I don’t think a buyer is coming along any time soon.

However, such uncertainty makes it very hard to plan for the future. For example, if I knew that I would definitely be able to use the land for five or ten years, I could spend the money to install permanent fencing on the leased land. As things stand, I could invest thousands of dollars in fencing only to have my neighbors sell the land six months later to new owners that do not want to continue the lease. Similarly, with a reliable long term lease, I could invest some money in working on the drainage of a couple of the fields, but again, as things stand that money might go right out the window if my neighbors sell the place. I am, therefore, in the classic position of being unwilling to make improvements (and to benefit from those improvements) to leased land.

In addition, during the course of the conversation, there was a further more troubling reality check. I have been living in a fantasy world where the housing market collapse has brough my neighbor’s head out of the clouds in terms of how much money he and his wife would want for the agricultural land on their property (set back, non-road frontage). In this fantasy world where land values have fallen back to earth the cash flow and profit from the scaled-up farm would make it possible for me to buy 100 acres of land (about sixty in pasture, forty in woods) from my neighbors and pay it off in five years while I continued to work my day job (extending the time I work that day job by two years, to 2015). That fantasy was shattered yesterday when my neighbor threw out $4,000 per acre as the ballpark figure on the land that we discussed, about 40% of which is worthless steep wooded hillside that I have to buy to maintain the balance of woods and open fields on the remainder of my neighbor’s farm, that I could use to run my numbers to see if buying the land might be feasible. End of story. End of fantasy. Very likely the end of Stony Brook Farm at a full-time scale.

The only option remaining is to move. However, Jen and I are very happy hear. We have a beautiful house, a beautiful barn (the exterior needs sprucing up), beautiful views, what little land we have is also very nice, and we live just a few minutes from two nice villages, and while Jen is willing to entertain the idea of moving, she is not really willing to sacrifice any of those things to do so.

So, in this fantasy crushed, reality checked world, the big questions that weigh now heavily on Stony Brook Farm is, will a farm that satisfies us both come along before my neighbors sell out, and will I be able to get the farm where I want it to without being able to make the infrastructural investments that I had planned in my fantasy (a hoop house for raising pigs in the winter, for example)?

Land is the lynch pin in the resurgence of small- and mid-scale agriculture and just yesterday I was royally buggered by it.