Image by cindy47452 via Flickr
Sounds too good to be true, doesn’t it? Well, here is the back story.
My husband and I were delivering eggs this morning (we supply some really great local restaurants) and happened to drive down a different street than usual. We saw a new sign out from a neighbor selling eggs.
I am always excited when I see another farm stand here in Napa as we have focused on wine grapes to the exclusion of anything else (or so it seems). I would really like for this area to get a reputation for fresh farm goods and can see the day when mom, dad and the kids will pile into the car to go farm hopping for their fresh goodies.
That being my goal, I stopped and introduced myself and welcomed them to the business. I did want to know how they came up with the price for their lovely eggs though. If you are one of the fabulous readers who follow my blog, you will know that I did an article not too long ago on how to know how much a dozen eggs cost to put into the carton.
Well, the woman I talked to was just delightful and was eager to show off her operation. Really nice- they are doing a fabulous job with their chickens. But she told me that they had no idea what to charge for their eggs, so they just set a price for the eggs at $3.00 a dozen.
Since I am not known to be bashful, I gave her my opinion- that she is pricing her eggs too low and is losing money. So- I thought I would put my money where my mouth is, so to speak, and go over the basics on how to calculate what eggs should be priced at if you need to break even (or make a profit that may even provide a low minimum wage for your efforts).
Let’s start at the beginning. Your chicks cost you money to buy and probably get shipped to you. Next, if you have your chickens vaccinated (we don’t do this for reasons that I will explain in another article) you need to add that in.
You will need to feed those chickens for about 5-6 months before they start laying eggs. Also, I don’t know how you do it, but we use a lot of straw to keep things sanitary around our coops so we add that into our cost calculations.
We also use a lot of diatomaceous earth both to deal with chicken pests (chickens get worms and external parasites just like your dogs would if you don’t take proper measures) and to keep the flies down in the yard. But, we do need to worm our chickens on occasion and that stuff is not cheap. AND we have to throw away all the eggs for a couple of weeks when we do it for food safety reasons.
Oh yeah- we also need to put out a lot of fly traps that we wouldn’t need if we didn’t have the chickens so we will add those in as well.
A much harder calculation is housing costs (coops, watering systems, food storage bins, feed delivery systems, etc.)- some people skip it and others just amortize the cost over the time period they expect the housing to last. The point is, though, you did have to spend that money and the egg sales need to reimburse you for it over time.
Another factor that you need to consider is chicken losses. You can lose chickens for many reasons and it is especially common when your chickens are allowed to free range. You need to realize that living that healthy and free lifestyle means that not only are they foraging for their dinner- but that they can also become part of the food chain. Those chickens cost you money to raise and must be accounted for in the cost of doing business.
Don’t forget that chickens get hurt and require medical attention. Even if you can provide it yourself for the most part the supplies will still cost you money.
Alright, if you analyze the above information, you get an idea of how much it cost you to get that chicken to laying age. If you read up on your variety of chickens, you will see where someone says that your chicken will lay, say, 200 eggs a year.
What they mean by that is once your chicken starts to lay eggs, the first 365 days she will lay 200 eggs (if you are lucky). This includes a period of time at least once a year where your chickens will molt (replacing their feathers and getting recharged). So, for about a month or so a year, no eggs from those girls!
That figure also takes into account the drop in egg production that comes with shorter days. Chickens naturally cut back during the winter as it is not a great time to start a family.
After the molting occurs, your chickens will not lay as many eggs as they did before- on an average of up to 20% fewer they say.
Here is the bad news: They still eat as much as they did before and the cost of keeping them doesn’t go down. The number of eggs you will get just keeps going way down after that. After 2 years it costs more to maintain a chicken than you can make from selling her eggs. So you have a decision to make about how long you can keep these chickens and not lose money.
Did I mention that about 5% of the eggs we get we cannot sell because they get cracked, pecked or are too dirty to clean safely?
Now let’s tie all the above information together in a way that will help you decide how to price your eggs. Using the above facts, guess-timate how much it costs to keep a chicken from the time of purchase for a full two years. Figure out how many eggs you can expect for the first and then the second year. Divide the costs of keeping the chickens by the eggs they should be laying.
The figure you get will probably surprise you. We see eggs at the farmers market and around town at $6-7.00 a dozen. Although our prices are much lower, after you do the math and pay for someone to help out you can see that the profits are pretty low even at that price!
I don’t mean to discourage you from selling your eggs. But if you have a business, you really need to know how much your true costs are going to be if you want to stay in business very long!