After a much needed hiatus from blogging, I'm back in the saddle with a knockdown, drag-out economic year in review for 2012! This is the fourth in a series of quarterly reports that you can find here, here, and here. I'll provide the detail below, but if you want the Cliff's Notes version: we just about broke even, but came out a bit in the red for our first year of production.
The first thing you notice are the three biggest costs: Pigs, Turkeys, and Rent. This shouldn't be too surprising as two of our three enterprises this year were pigs and turkeys, and we needed to rent land to pasture those animals. The land rental also factored into the cost of producing our acre of vegetables. While rent is straightforward, the turkey and pig costs are more complicated. They contain costs for feed, shelters, and slaughter. For instance, pig costs included $4082 for feed, $355 for shelter and water, and $720 worth of slaughter related expenses. The turkeys on the other hand, ate about $2000 of feed, required $1000 for shelters, waterers, and brooder equipment, cost $844 to acquire, and $622 to slaughter. Food plot costs were fairly small, and a third of those costs were capital costs. The bees were a big cost (and we only got a few jars of honey this year), but that cost was a one-time cost for hives. Miscellaneous costs are a bunch of small things that add up. These include a few ill fated costs (like a $100 android device for tracking time that broke after 2 months) and a few really important costs (like $200 worth of work clothes). Overall, $3242 of the $15000 we spent this year was related to start-up costs. The rest was just the cost of doing business.
As for income, the accounting is more straightforward. We sold about 25 Thanksgiving baskets (turkey plus vegetables) and 25 individual turkeys. The turkeys brought in about $4000 and the vegetables about $2000. We only sold four pigs this year for pork, bringing in $3,301, while we sold 9 weaner pigs for $1325. I also sold a bit of surplus hay.
Compare Income to Cost, and you'll see that we lost about $4000 this year. Our goal was to break even, but we came up a bit short. The big reasons:
1. We expected more honey production this year. Losing four of of the five hives we started in the spring put a big damper in our honey plans. We had hoped to bring in $500-$1000 from honey.
2. Feed costs started skyrocketing in the summer, significantly cutting into our profits.
3. We had hoped to sell 50 baskets, but could only sell 25 and had to sell the rest of the turkeys individually. If we had sold all 50, that would have been about $2000 more income.
4. I was expecting the pigs to average 200 lbs hanging weight at 6 months and the turkeys to average 12.5 pounds at slaughter. Instead, our pigs averaged 164lbs and the turkeys 10lbs.
5. Lots of little costs crept in that we hadn't planned for. For instance, I didn't budget for new boots, gloves, and work clothes, but I desperately needed those as my old stuff wore out. Embarrasingly, I didn't budget for fuel (tractors, tillers, and trucks don't run for free).
So, we learned a valuable lesson: be more pessimistic in business planning than you think is necessary.
Compare Income to Cost, and you'll see that we lost about $4000 this year. Our goal was to break even, but we came up a bit short. The big reasons:
1. We expected more honey production this year. Losing four of of the five hives we started in the spring put a big damper in our honey plans. We had hoped to bring in $500-$1000 from honey.
2. Feed costs started skyrocketing in the summer, significantly cutting into our profits.
3. We had hoped to sell 50 baskets, but could only sell 25 and had to sell the rest of the turkeys individually. If we had sold all 50, that would have been about $2000 more income.
4. I was expecting the pigs to average 200 lbs hanging weight at 6 months and the turkeys to average 12.5 pounds at slaughter. Instead, our pigs averaged 164lbs and the turkeys 10lbs.
5. Lots of little costs crept in that we hadn't planned for. For instance, I didn't budget for new boots, gloves, and work clothes, but I desperately needed those as my old stuff wore out. Embarrasingly, I didn't budget for fuel (tractors, tillers, and trucks don't run for free).
So, we learned a valuable lesson: be more pessimistic in business planning than you think is necessary.
Lastly is a look at the amount of time spent on the farm in 2012. About 95% of this time was put in by me, while my dad and Jen helped out for the rest (the 16 hour days they put in during turkey processing time will never be forgotten). Clearly, I didn't reach my long term goal of making $15/hour this year (more like -$0.29 per hour). Most of the time was spent on chores, food plots, and turkeys. The chores included turkeys, pigs, and rabbits, and included bringing food out to the pasture or barn, cleaning and checking waterers, moving shelters, and rotating pastures. They averaged about 1.25 hours/day for the whole year (longer during the peak of the summer when I was moving and feeding a full company of turkeys and pigs). The food plots included both tending the garden as well as processing and cleaning the produce. For instance, the garlic and beans both needed a lot of meticulous work to get them ready for sale after they were harvested. Turkeys needed a lot of time to build shelters, prepare the abbatoir, and finally perform the slaughter. 100 hours of turkey time came in November alone.
Overall, we spent about 1185 hours working the farm this year (a bit more in reality as I didn't account for hours spent blogging). That works out to an average of 22 hours per week. This was manageable with my 20 hour/week University of Washington job, and I could have probably cut the time down a bit cutting out a few projects that didn't make me any money (like the barley project for instance). 60 hours per week is the absolute max I ever want to work the farm, and I'd prefer to stay in the 50 hours/week range. It's important to have time off, and working 12 hour days seven days a week will burn me out in a hurry.
We're going to make some changes next year based on these economics and the big picture things we've learned this year, but I'll leave that discussion to another post.
Overall, we spent about 1185 hours working the farm this year (a bit more in reality as I didn't account for hours spent blogging). That works out to an average of 22 hours per week. This was manageable with my 20 hour/week University of Washington job, and I could have probably cut the time down a bit cutting out a few projects that didn't make me any money (like the barley project for instance). 60 hours per week is the absolute max I ever want to work the farm, and I'd prefer to stay in the 50 hours/week range. It's important to have time off, and working 12 hour days seven days a week will burn me out in a hurry.
We're going to make some changes next year based on these economics and the big picture things we've learned this year, but I'll leave that discussion to another post.
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