This will be the last in my series of economics centered posts for a while, but I wanted to finish up my thoughts from the last two posts with a sample business plan that gets me to 40k per year. Without futher ado.
Amazingly, when I started working on this, I didn't set out to hit 40k on the mark, but rather to put together a diversity of operations scaled up to a size that I thought could keep me busy full time while obtaining maximum efficiency for a small scale operation. Whether it be luck or fate, I hit very close to 40k on the first try.
This plan is a scaled up, optimized version of all the things I'm doing right now. I keep the vegetable production at about the same scale as now, as intensively cultivating more than 1 to 1.5 acres is more than I can handle. If I can develop a market for the more easy to grow and harvest vegetables, like squash and pumpkins, then I can probably do a bit more acreage with my labor alone. I like those crops because they store well and can be fed to the pigs (and include a reasonable amount of easily digestible calories) if they don't sell. Honey production is capped at my five current hives, as I'm not sure how many hives my area can sustain. Pigs are expanded to a breeding herd of 2 boars and 14 sows. This has been my target number for a while, as it gives me the security of having two boars while keeping my boar to sow ratio at a relatively efficient spot. I can comfortably house these animals in my current barn space over the winter. I put in a two tiered sales for butcher pigs based on partial direct market and partial wholesale based on my theoretical inclusion in a local meat co-op. I'd also be selling a ton of weaner pigs, which probably would be hard for me to market, especially since they all would be ready in the fall. Lastly, the big money maker is the cattle, which I'm estimating based on 30 head bought in the spring and butchered in the fall. I figure I'd need to rent about 20 acres of land to provide enough grass, which I can probably rent from my neighbor who has a 40 acre parcel. If the buy in the spring-sell in the fall scheme doesn't work out, I'd need to look into the costs of keeping a breeding herd. Thanks for the comments on recent posts which have helped me to fine tune some of these assumptions.
So, what is the big takeaway from this? First, marketing. It's easy to run the numbers and figure out what you can produce, but it's so much more difficult to find buyers for everything. Inclusion in the co-op is key as it allows me to get a reasonable wholesale price for beef and pork. I don't think I could ever direct market 112 pigs. There is still a lot of uncertainty in the marketing, though, which is a major hurdle to scaling up. I want to grow into the demand, not try to chase down buyers. Secondly, I'd need an awful lot of cash on hand to get through the year. I'd basically need twice the amount of my yearly profit to buy all the feed, weaner cattle, insurance, rent, and other expenses. I'd be maximizing my production efficiency by working with the seasons instead of against them, but most of my cash would come in a very narrow time frame (summer to late fall).
So, will this ever become a reality? I hope so, but as they say, I won't be quitting my day job any time soon!
This plan is a scaled up, optimized version of all the things I'm doing right now. I keep the vegetable production at about the same scale as now, as intensively cultivating more than 1 to 1.5 acres is more than I can handle. If I can develop a market for the more easy to grow and harvest vegetables, like squash and pumpkins, then I can probably do a bit more acreage with my labor alone. I like those crops because they store well and can be fed to the pigs (and include a reasonable amount of easily digestible calories) if they don't sell. Honey production is capped at my five current hives, as I'm not sure how many hives my area can sustain. Pigs are expanded to a breeding herd of 2 boars and 14 sows. This has been my target number for a while, as it gives me the security of having two boars while keeping my boar to sow ratio at a relatively efficient spot. I can comfortably house these animals in my current barn space over the winter. I put in a two tiered sales for butcher pigs based on partial direct market and partial wholesale based on my theoretical inclusion in a local meat co-op. I'd also be selling a ton of weaner pigs, which probably would be hard for me to market, especially since they all would be ready in the fall. Lastly, the big money maker is the cattle, which I'm estimating based on 30 head bought in the spring and butchered in the fall. I figure I'd need to rent about 20 acres of land to provide enough grass, which I can probably rent from my neighbor who has a 40 acre parcel. If the buy in the spring-sell in the fall scheme doesn't work out, I'd need to look into the costs of keeping a breeding herd. Thanks for the comments on recent posts which have helped me to fine tune some of these assumptions.
So, what is the big takeaway from this? First, marketing. It's easy to run the numbers and figure out what you can produce, but it's so much more difficult to find buyers for everything. Inclusion in the co-op is key as it allows me to get a reasonable wholesale price for beef and pork. I don't think I could ever direct market 112 pigs. There is still a lot of uncertainty in the marketing, though, which is a major hurdle to scaling up. I want to grow into the demand, not try to chase down buyers. Secondly, I'd need an awful lot of cash on hand to get through the year. I'd basically need twice the amount of my yearly profit to buy all the feed, weaner cattle, insurance, rent, and other expenses. I'd be maximizing my production efficiency by working with the seasons instead of against them, but most of my cash would come in a very narrow time frame (summer to late fall).
So, will this ever become a reality? I hope so, but as they say, I won't be quitting my day job any time soon!
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