I've been thinking about money a lot lately. This shouldn't be too surprising as I'm managing a small business. It's also not too surprising as I've always been a bit (or perhaps more) neurotic about the green-turned-digital coinage. I've never had to worry too much about money, even though I've never made that much, because I hardly spend any at all. The farm requires me to spend, and I don't like it.
I'll start out with some accounting. Here are the expenses for the first half of the year.
Revenue is already starting to pick up now that we've opened the Chuckanut Farmstand and attended our first farmer's market--but it's coming in slowly. With only one deposit received thus far for 1/2 pig, our path to profitability for 2013 is looking overgrown. It doesn't help that I tend to get discouraged very easily.
Taking a step back to look at the big picture raises another idea that I've been grappling with lately. Namely, can a small, single-family farm with no more than a few employees (not volunteer or unpaid interns) make enough money to provide a living wage to the farm owner/operators and all employees. Coming up with a living wage figure is always going to be debatable, but this website provided a reasonable estimation. It gives different values for different family situations (single with 3 kids requires a higher wage than married with no kids). The lowest wage is $8.55/hr for a single person with no kids. This is assuming 52 weeks of employment at 40 hours per week. A married person supporting a spouse and 2 kids needs $18.56/hr. These wages are assuming zero luxuries like internet, cable tv, cell phone, and vacations. Federal minimum wage is $7.25, and small farms can pay less in wages due to an exemption.
If I want to hire an employee, I would feel uncomfortable paying them anything under than $10, and I would prefer $15-20 (I'm sure there are taxes and other costs to having employees that I haven't researched yet and don'te even want to know). For my own salary, I need a minimum of $30,000 year to cover my 1/2 of our annual expenses and would prefer $40,000/year to make sure I can cover my medical insurance, take a vacation, and potentially even save money! To get to that level, I'd need to make $16/hr with an average 50 hour work and two weeks of vacation. That's not unreasonable to me.
The problem is how to get to that earning level. One problem is the seasonal nature of agricultural work. Anything vegetable or crop related has to occur between March and late October. Hoop houses can extend the season a bit, but there is still a big chunk of time when it's going to be difficult to find 50 hours of money-making work to do. In order to balance that out, one will likely need to work more than 50 hours/week during the peak growing season. This isn't unreasonable, but it can veer into burn-out territory in a hurry once those workloads start going up. I know some people who are into the triple digits. Animals need care year round, though, although this farm is focused on keeping outside winter work to a minimum to avoid stress on the animals and on the farmer. Worrying about workloads is an academic exercise, though, if you can't actually make/grow/raise and sell enough valuable products to earn that 40k, and it's still hard for me to see how a single farmer can get there on his own.
So, I want to keep pursing that question I posed above. Can a small-farm farmer make a living wage? Right now, this farm isn't, and the future is murky, but I'd love to hear from those of you who are succeeding.