Farmers Market Season Begins

Today is the first day of the Menands retail farmers market. The Menands market starts so early because we do a really big spring plant business. There will be very little, if anything, in the way of local produce. There might be some asparagus, spinach, and/or rhubarb, and maybe some of the last of the storage crops like potatoes. Mostly it will be plants (flowers and vegetables).

I will have pork, but I am sold out of lamb and chicken. I will have a couple of my neighbor’s lambs slaughtered in a few weeks to carry me through until I have the first of my own slaughtered in July. I was going to buy them from her and bring them over here for a few weeks so that they were “mine,” but that is kind of silly, I think. Why stress them out by moving them to another farm for just a few weeks and add to my labor by needing to manage a pen of just a couple of sheep? The reality is that if I took possession of them with just three weeks to go, my neighbor raised them anyway, not me. Calling that lamb mine would be like shipping in a cow from Mexico, then feeding it on US soil for a few days, and then labeling the beef from that cow as “Produce of USA,” which you can do under the current COOL regulations. It’s a ruse, a farce. Instead, I’ll skip the BSing and just let my customers know that the lambs were raised by my neighbor. I would be shocked if a single customer had a single bad word to say about it. It is not a producer-only market, so there is no problem with that plan market management-wise.

I love going to the farmers market, although it will be interesting to see what my stamina is like this year compared to last year. I started the market mid-season last year, in July, I think. Last year I attended for fourteen weeks. This year it will be twenty-five. Market days are long long days. They start with chores at 5:00am and end when I get home and unloaded about 3:30pm, during which time I am constantly on my feet, other than when I am driving, and after which I need to immediately do a round of chores. The thing I like most about the market is talking to people that are as excited about local food as I am. I am especially interested in those people that are just making the transition from industrial to local food. When selling directly, I can see much more clearly the contribution my farming makes to people’s lives than when I sell wholesale. I see my pork in the freezer at my friends’ store, but I have only a vague and abstract sense of it as my own. It pleases me to see it in the case, of course. I just don’t feel as strong a connection to it and sense of purpose because of it as I do when I hand the packages directly to people at the market.

 

Affording Health Insurance

I am ready to move on from the discussion about the need for local-regional farmers to scale up if we are ever going to make local-regionalism anything more than an exclusive niche for a tiny minority of well-off people. However, I would like to directly address one final issue, health insurance, as it is extremely important.

Over the course of the discussion about scaling up — which unfortunately has had almost nothing to do with the idea about the need to scale up and everything to do with establishing just how much it costs to raise a pig — one thing that has been repeatedly hurled at me is the need for farmers to be able to afford non-subsidized health insurance, which should therefore be included in the cost to raise a pig.

Note that for the purposes of this argument, I leave out my desire to have the health insurance issue resolved by a single-payer national health care system (“socialist” health care for all you red baiters out there). I accept the current and near future reality that health care is either subsidized by employers or the state or is privately purchased, and the numbers below are for privately purchased health care.

I briefly pointed out in a comment that as it relates to low-volume farmers the health insurance argument is something of a red herring. I say this because I don’t see how a low-volume farmer could possibly justify foisting his health insurance bill onto his customers when that bill needs to be paid for by just thirty pigs (at $3.50 per pound at 150 pound hanging weight), forty lambs (at $4.00 per pound at 45 pound hanging weight), and 500 meat chickens (at $3.50 per pound at 3.5 pounds).  I have repeatedly used $12,000 as the cost to cover a husband and wife with no children, and it has not been challenged, so I will use that here. That health insurance covered by thirty pigs (54% of total gross income) would cost $216 per pig ($1.44 per pound hanging weight), by forty lambs (25% of gross income) would cost $75 per lamb ($1.66 per pound hanging weight), and by 500 meat chickens (21% of gross income) would cost $5.05 per bird ($1.44 per pound). On the above low-volume farm, $12,000 per year for health insurance would amount to 41% of gross income, and so therefore if prices were set high enough to make health insurance affordable for this low-volume farmer, they would need to be increased from the current going rate by 40% across the board.

Charging enough for low-volume farmers to be able to afford non-subsidized health insurance would therefore make local meat much more expensive than it already is, putting it even further out of reach of even more people.

However, there is no better argument for scaling up, especially given how insistent people have been that farmers be able to afford health insurance. On a farm scaled-up to Amish scale as I have recommended, the $12,000 per year health insurance numbers would be as follows:

• 300 pigs at $2.00 per pound hanging weight (66% gross income) = $26.40 per pig ($0.18 per pound)
• 150 lambs at $3.00 per pound hanging weight (15% gross income) = $12.00 per lamb ($0.27 per pound)
• 3,000 meat chickens at $2.50 per pound (19% gross income) = $0.76 per bird ($0.22 per bird)

At $12,000 per year, health insurance on an Amish-scale farm would amount to 9.0% of gross income, meaning that incurring it as a direct cost of production would require an increase in prices paid by the customer of only 9% across the board.

The difference between 9% and 40% is 350%.

 

What it Costs to Raise a Pig: A Full Accounting

[Note: I initially published this with an error in my land rent, mortgage, taxes calculation. This re-published post corrects that by adding an additional $4.50 per pig over the originally published post]

So, here it is, the much requested full accounting of what it costs me to raise a pig (when I raise 300 pigs).

Note that I am happy to discuss these numbers. However, what I will not discuss is whether they are real and/or accurate. They are both.

Note also that I am fed up with the nasty abusive personal attacks that I have received over the course of this discussion, so any such comments will be deleted.

The total cost per pig when I raise 300 pigs is: $240.75

• My original figure of $225 was therefore off by 7%
  • Let’s maintain some perspective by recalling that some people were saying it easily costs twice my $225 figure
• I currently spend practically zero dollars on marketing. If, however, you want to add a marketing charge, I would be happy to go as high as $5.00 per pig ($1500 total, which seems like an awful lot to me), which would make the total cost $245.75 — or 9% higher than my original figure.
• Even if you include a death/nonmarketability loss of 2%, on top of the cost that includes the marketing charge, which I refuse to do — if you are losing 2% of weaned pigs, you are doing something wrong, I think — my costs would still only be $250.75, or just 11.5% higher than my original figure.
  • I e-mailed a pastured pig farmer that finishes 1,000 pigs per year and he said that while it might be worthwhile to include a couple percent loss for budgeting, the reality is that loss “is not going to drastically change the bottom line.”  He also said that non-death loss is not an issue as even pigs that have stalled out and don’t grow well can be marketed in the direct market. Let me re-iterate, he finishes 1,000 pigs per year. He knows what he is talking about.

Notes:

• All fixed and shared costs are currently charged to the pigs at 70%
  • When the sheep scale up to 100 ewes and the thirty feeder cows are added, this percentage will drop substantially, meaning there will be a drop in the cost to raise a pig
• All depreciation is according to MARCS
• Land is rented at $50/acre/year. Owned land amounts to 25% of the monthly mortgage payment according to our tax bill

Feeder pig = $70

Feed cost = $275/ton delivered

Feed per pig from arrival (35-50lbs) to slaughter weight (220-250 lbs liveweight) = 750-800 lbs. x 0.1375 = $110 (at 800 lbs) per pig

Supplies, including fencing, shelter, feeders, waterers, and misc. = $20 per pig (which is extremely conservative as the actual numbers came out to $12/pig)

Equipment (tractor and trailer) = $9.30 per pig

Equipment fuel, fluids, and filters = $1.16 per pig

Equipment repairs = $1.16 per pig

Truck = $9.80 per pig

Mileage = $8.50 per pig

• If I could convince the non-commodity wholesale buyer that I sell to to use the slaughterhouse fifteen miles away from me instead of the one that is seventy miles away, that mileage charge would drop all the way down to $2.125 per pig
  

Land Rent, Mortgage, and Taxes = $8.50 per pig

Insurance = $2.33 per pig

TOTAL per pig = $240.75 per pig

Avg. hanging weight = 150 lbs. = $1.61/lb hanging weight

Sell at 30% profit = $2.09 per pound = $313.50 received = $72.75 per pig, less a minimum 10% reinvested in the farm (to replace machinery, supplies, expand, etc. – at 300 pigs per year this equals $2,175 per year) = $65.475 per pig ($19,642.50) that pays for my labor to provide my living expenses, pay the mortgage on the farmhouse, save for retirement, etc. (Another $10,000 from a flock of 100 ewes, and another $10,000 from thirty feeder cows makes $40,000 per year [Note: Don’t forget that when I get up to 100 ewes and thirty feeder cows, my pig costs will be even lower because their share of the fixed and other shared costs burden will go down]).

Note that the plan is to bring fifty pigs onto the farm every other month, which makes six batches of fifty pigs in a twelve month period. Therefore there are only going to be 100 (two out of every three months) to 150 (one out of every three months) pigs on the farm at any given time.