Tuesday, June 13, 2017

Effect of Scale & Feeding on Egg Profitability with Heritage Hens by Jeff Mattocks

I have been watching a great conversation surrounding heritage breeds on the APPPAPlus list. It’s a great dialogue surrounding the potential profitability of using standard-bred poultry, an increasingly popular topic. One thing to keep in mind is that the Black Australorps set an egg laying record in the 1920’s of 346 eggs laid in a 365 day year.

According to the Livestock Conservancy (1), “By 1922-23 ‘Australian Laying Orpingtons’ were setting records. At Geelong, Victoria, a pen of six ‘Australorp’ hens set a world record by laying 1857 eggs in 365 days – an average of 309.5 eggs each. At the Grafton contest in 1923-24 an Australorp hen laid 347 eggs in 365 days. Soon after a hen of the Burns bloodline broke the world record, laying 354 eggs in twelve months. Another hen set a new world record when she laid an amazing 364 eggs in 365 days!”

High lay rates are only possible under outstanding management, environment, and feed protocol. As I travel around and meet with producers, I find that simple and cost effective changes to management, environment, and feed would make a huge difference in the profitability bottom-line.

To help figure out cost per dozen, I created an Excel spreadsheet for calculating cost per dozen that calculates the cost of raising the pullet and the feed cost per dozen eggs. The output of sample calculations are included in Table 1. The worksheet I shared on the APPPAPlus list is a live worksheet that you can change numbers according to your production model. It’s demonstrating two management points: scale and feeding.  

Table 1: Cost to Raise 100 Heritage Pullets

Units
Cost
Total
Chick
100
$10.00
$1,000.00
Feed to Production
20 lbs.
$0.50
$1,000.00
Labor
150 hrs.
$12.00
$1,800.00
Misc.
100
$3.00
$300.00
Total
$4,100
Per Bird Cost of Pullet
$41.00

Part of the lack of profitability is scale of operation, especially while raising pullets from chick to point-of-lay. This is why buying replacement pullets is often a better option for operations trying to make money. The calculations in Table 1 demonstrate how the scale of the pullet flock can reduce the cost of production  by making more efficient use of labor.

My challenge to you as a group is to work collectively to raise pullets in larger numbers for your production and to sell excess pullets in your area. Currently most ready to lay pullets are Sexlinks with beaks trimmed because Sexlinks (on paper) are one of the most profitable breeds to raise for egg production. However, the breeding for the Sexlink is for commercial confinement laying operations. 

The Sexlink is a great egg producer. But it is not a great forager, doesn’t have the same predator skills, and it’s not the most weather hardy breed. Whereas the heritage breeds are outstanding in weather hardiness, predator detection, and foraging.
 
I think that the right selection of heritage breed layers with outstanding management, environments, and feed are as profitable as a Sexlink when all things are taken into consideration.

The choice of breed has to fit your production model, management skills, and lifestyle.
Effect of Scale on Cost of Egg Production
Tables 1 and 2 compares a 100 bird and 5,000 bird flock from day 1 to laying age. For each line item, multiply the units x cost to arrive at the total. Then add the total column to determine the cost per pullet. 

Adjust the values according to your input and actual values. For example, these calculations make an assumption that you will use 20 pounds of feed and require 150 hours of labor to raise a flock of 20 week old pullets. The miscellaneous line can be adjusted to account for incidental and overhead costs as needed.

 Table 2: Cost to Raise 5,000 Heritage Pullets

Units
Cost
Total
Chick
5,000
$10.00
$50,000.00
Feed to Production
20 lbs.
$0.50
$50,000.00
Labor
150 hrs.
$12.00
$1,800.00
Misc.
100
$3.00
$300.00
Total
$102,100
Per Bird Cost of Pullet
$20.42

Cost of Egg of Production
Table 3 calculates the average rate of lay percentage for the whole lay cycle by feed amount. Layers should be fed 1 ounce of feed per day per pound of live weight for optimum production. A five pound hen would consume 5 ounces (.313 lbs.) of feed per day and would cost $0.157 per day to feed. If that hen laid at a 50% rate of lay, each dozen of eggs would cost $3.00 in feed (see Table 3 on page 24).

When hens are given free choice grains, they waste more feed and typically consume more feed than they need. An overfed hen weighs too much, which reduces her production.

Calculating a Cost Per Dozen
Let’s assume you have a 70% rate of lay with a feed cost per dozen of $3.22. A 70% rate of lay will yield approximately 250 eggs a year (e.g., 365 x .7).

If the cost to raise a pullet is $41.00, then each egg costs $0.164 or $1.97 per dozen. The cost of production including Feed Cost ($3.22) + Pullet Cost ($1.97) is $5.19 per dozen.

If the cost to raise a pullet is $20.42, then each egg costs $0.082 or $0.98 per dozen. The cost of production including Feed Cost ($3.22) + Pullet Cost ($0.98) is $4.20 per dozen.

Table 3: Cost of Egg Production Per Dozen



Per Dozen Feed Cost by Rate of Lay for Whole Lay Cycle
Feed Amount
Feed Cost per Pound
Daily Feed per Hen
50%
60%
70%
80%
90%
0.250
$0.50
$0.125
$3.00
$2.51
$2.15
$1.88
$1.68
0.313
$0.50
$0.157
$3.76
$3.14
$2.69
$2.35
$2.10
0.375
$0.50
$0.188
$4.50
$3.76
$3.22
$2.81
$2.52
0.435
$0.50
$0.219
$5.26
$4.39
$3.76
$3.29
$2.94
0.500
$0.50
$0.250
$6.00
$5.01
$4.29
$3.75
$3.36

This article was republished, with permission from  APPPA Grit Issue 97 in January/February 2017. Jeff Mattocks is livestock and poultry nutritionist with The Fertrell Company. He serves on the APPPA board of directors.
 
Resources
Livestock Conservancy. “Australorp Chicken.” https://livestockconservancy.org/index.php/heritage/internal/australorp

Tuesday, April 25, 2017

Book Review: Cultivating Customers: A Farmers Guide to Online Marketing by Mike Badger


This review has been republished, with permission, from APPPA Grit Issue 96. Mike Badger is the Executive Director of APPPA and host of the Pastured Poultry Talk podcast. 

 

When Simon Huntley, founder of Small Farms Central, asked me to review his new book about marketing, I was nervous about what I’d find inside. Simon is a computer programmer with a farming background and he founded a successful online website platform for small farms. If I knew anything from my many, many years working alongside programmers, it’s that marketing is not a natural skillset.
Then I stopped myself.

Not only is marketing a teachable skill, but every single time you or I interact with a customer, we’re marketing. Nobody builds a business without marketing. And this transcends industry. It doesn’t matter if you sell food, clothes, equipment, cars, or bytes.

Simon, for his part, has been working with farmers all across the country since 2006 developing tools that help farmers like you market and sell. He’s sustained a technology company that’s geared specifically toward helping farm businesses succeed.

So, after I got my thoughts focused, I dug in to Cultivating Customers.

At less than 200 pages, I finished my first read in a few hours, which is generally how I would read a book like this. I’d read it through one time. And then I’d use it as reference to dig deeper into specific ideas as I implemented them.

This book is not a social media fanboy regurgitation of post it to Facebook and they will come. And I welcome that approach. Simon focuses, instead, on helping you develop a marketing system that engages customers at all stages of the customer lifecycle.

When you read Cultivating Customers, don’t skip the introduction. Many new and struggling farmers need to hear Simon’s words about farming as a business and farming in the context of profitability. Simon says, "The fact is that agripreneurs keep making the same mistakes. CSAs that deliver delicious boxes of fresh produce are going under because they can’t find enough members. Farmers’ markets are barely breaking even. Small farmers just aren’t adequately cultivating the business side of growing. Meanwhile, the expanding local food movement is leaving farmers high and dry." 

What Simon describes is a marketing problem. The fact that you have a great product is expected and assumed. If you’ve got a great product, but you don’t have enough customers, then you need to figure out why. Are you marketing in the wrong place? Are you raising a product that is not in demand?  Is your price out of line? I could keep going, but you get the idea. This is the four p’s of marketing (product, price, place, promotion).

Cultivating Customers is divided into three sections. Section 1 presents a framework from which to market. It covers how you identify, capture and engage your customers at various stages in their buying cycle. One of my favorite takeaways from the section is a simple loyalty program where you offer customers exclusive deals and offers, which is something just about anybody can run with  minimal or no technology. This can be a great way to market to existing customers. Loyalty and rewards programs can get more involved from there.
Section 2 provides tactics based on specific marketing channels, such as website, email, Facebook, Instagram, Pinterest, Twitter, text message marketing and more. Section three dives into selling at specific venues, such as CSAs and restaurants.

If you were able to join APPPA in one of the “Raising Pastured Poultry for Food and Profit” workshops we held around the country in September 2016, then the idea of creating a framework to find customers, engage customers, and sell to customers is familiar. In that talk, I focused the first half of the presentation on pricing for profit and the second half on developing a system from which to market. In Cultivating Customers, Simon unknowingly builds perfectly onto my economics and pricing presentation, which might be why his book is resonating with me. The idea is simple in concept. Find customers, capture customers, and engage them with email or text messaging.

If I had one criticism of the book, it would be that the examples are overwhelmingly veggie oriented. However, that’s not a deal breaker, because Cultivating Customers is not about marketing vegetables.  It’s about marketing. Don’t get hung up on the examples.

The book itself, according to Simon, is targeted to small to medium sized farms who are selling direct to the customer. The techniques outlined in the book won’t be necessary if you’re selling everything you produce through a distributor model. Fortunately, most pastured poultry producers rely heavily on selling through business-to-consumer (farm to consumer) or business-to-business (farm to restaurant) markets.

In an interview, I asked Simon to provide some guidance on finding the kind of person who might buy what you’re selling. He suggested that you talk to your existing customers

Sit down with them in person, over the phone, or at market, and ask them questions about their experiences. Ask them what they like, how they found you, how they talk to their friends about you, and those kinds of questions.  This act of listening starts to teach you about who your customers are and how they think so that you can ultimately use that in your marketing.

As the founder of Small Farm Central, Simon has  a breadth of website experience, so I asked him about the value of a website. He said that people will read about you on your website when they are making a decision to buy. It’s a credibility check. A common mistake, according to Simon, is having too much on your website and not giving your customers a clear  course of action. Don’t confuse them with too much information.

I asked Simon if there’s a right way to do Facebook.  He recommends picking one social media platform and doing it well instead of trying to do all the social platforms in a mediocre way. That’s not to say you shouldn’t do more than one platform, but it does mean be focused on and excel at one. You’ll develop proficiency as you market and understand your customer base more.

In the book, Simon recommends  creating a content creation schedule for your social marketing. Here’s a simple marketing approach that gets you started: “Facebook post on Monday morning. Email on Monday afternoon. Three tweets throughout the week.” If you’re currently feeling lost in your marketing, it’s a good plan to refocus your efforts. That simple marketing recipe can be tweaked and developed as you go. For example, you might substitute Pinterest for Twitter or a second email instead of a second social media platform.

When it comes to content of Facebook, compelling and authentic are two words that stood out to me when talking with Simon. Pictures work well.

Just remember this when you’re developing Facebook marketing. Any post you place on Facebook will be seen by five to ten percent of your following, according to Simon. That means if 200 people like your page, each post organically reaches 10 to 20 people. It can go higher, of course, if you create something that people share or if you boost the post (pay for views).  This is why it’s very important that Facebook is only one part of your marketing and not the totality of it.

One of the components of a well-rounded marketing plan could be text message marketing, which Simon introduces in Cultivating Customers. This is a relatively new concept for many, and it’s well suited for use in very specific contexts, such as last minute reminders. For example, on market day, you can text your customers a reminder to visit the market.

Simon has developed an application that makes text message marketing possible, called Farm Fan, but there are other solutions in the marketplace. In the book, he covers how to use and how not to use text message marketing. Texts have a very high, immediate open rate, and it’s  a personal medium.

Bottom line, I think Simon hit a winner with this book. I’d recommend it, especially for new producers or producers with lagging sales. Marketing, like raising great poultry, is a craft that needs to be curated. Even if you’re an experienced marketer with some growth and success, there will likely be some gems inside Cultivating Customers that you can use in the context of your existing marketing plans.

You can find Cultivating Customers at Amazon or smallfarmcentral.com.


Monday, April 3, 2017

Profile of a Large-Scale Mobile Layer Shelter by Mike Badger



This article was republished, with permission, from APPPA Grit Issue 96. Mike Badger is the Executive Director of APPPA and host of the Pastured Poultry Talk podcast. 

Other members have written about the large-scale, daily move broiler shelters that can hold up to 600 broilers at one-time. And I’ve heard stories from the field of people building $50,000 egg mobiles—luxurious proof of concepts but not practical. Then Cliff Stoltzfoos of Stoltzfoos Layers in Kinzers, Pennsylvania, caught my attention with his mobile shelter for layers. He has some of the same efficiency improvements you might expect to find in a larger-scale commercial operation, but his shelters are moved through the pasture every day.

I thought it would be reasonable to share and profile one of the most innovative egg mobiles I’ve seen on pasture. 

Mobile layer shelters at Stoltzfoos Layers. They are covered with a green house plastic with a heavy duty curtain material on the shelter. A shade cloth can be added in the summer. Shown with metal sides to protect the shelters from cattle.

Daily Move with Small Equipment
Stoltzfoos Layers manages 4,000 layers on pasture in batches of 650 birds. Each day, the shelter is moved ahead by 100 feet. The 100 feet, according to Cliff, is the distance required to get the birds into fresh pasture for the day’s foraging; this allows the hens to graze in front and back of the shelter on fresh pasture.

His early pasture shelters were constructed of wood and would flip over in the high wind storms, which causes a host of problems, including death, destruction, and dropped hen productivity. The shelters evolved to a hoop house or green house design on a custom fabricated trailer frame that’s low to the ground.  The design includes a tandem axle in the rear, and has a footprint of 12’x25’.

The result is something that is stable and easily moved with a side-by-side vehicle, such as a Gator.

Solar Powered
Supplemental lighting evens out the egg production throughout the year. And on pasture, the most efficient way to do that is with solar, which is where Cliff’s design ultimately ended up. Before solar, he tried to use a 1,000 watt generator to power the lights. This worked until somebody forgets to start the generator or it runs out of gas or experiences other problems.

In the current design, the solar panel charges a battery bank that not only powers the lights, but it also powers the automated feed augers and the nest box timers.


Each shelter includes a one ton feed bin. The hose hanging out the back is a fill line for the water tank located inside the shelter.
Clean Eggs
Nest boxes open and close on timers, which is Cliff’s way of preventing hens from lounging in the nest boxes. Add in roll out nests boxes, and the eggs stay clean, which was his solution to dirty floor eggs in previous designs. By keeping the eggs clean, Cliff can sell unwashed eggs to his many customers who demand them. As an aside, many APPPA members have been able to keep eggs clean and hens from lounging in the nest by using curtains in front of the nests.

When the eggs roll out of the nests, they land on a conveyor belt. When collecting eggs, a person can stand on the outside of the shelter and hand crank the eggs from inside the shelter to the egg collecting station. The person collecting eggs can pack them directly into cartons or flats. 


Inside the shelter showing a 150 gallon water tank, automated feeders, nipple drinkers, roosts and nest boxes. The floor is slatted poultry floor.

Feed and Water
Each shelter has a one-ton feed bin attached to the rear of the shelter that feeds an automated feeding system. A sensor detects when the feed drops below a set point and automatically delivers more feed to the feeders.

On pasture there are a lot of humidity changes which can cause problems for the switching systems found on automated feeding systems. There are no moving parts in the sensor system, reducing the chance of a sensor failure.

Each shelter has a 150 gallon water tank inside that gravity feeds a nipple line. It can be filled through a fill line. Cliff uses a 500 gallon tanker to deliver water in the field, capable of filling a tank in less than 40 seconds.

The payoff
Cliff’s egg production is currently averaged out at 80% from the time he gets his ready-to-lay pullets. That’s up from the roughly 50% yearly average he started from. He attributes the efficiencies in shelter design to the improvement in management.