I’ve been working this morning on scheduling and planning. It never fails to astonish me how much difference it makes.
Let me explain a little.
Everything I do is carefully researched and planned. Including pastures, budgets, expansions, improvements, time management, and even butchering and sales.
Each year about this time, I start thinking about my following year and following years after that. I start building budgets and looking at income sources. Maybe it’s a new venture or maybe it’s just different marketing options.
Today, I’ve spent some time with pen and paper researching variations on ways to roast pigs. I wanted to explore additional options for exploration into a new value added process. With two sows, I want to explore options on what to do with piglets and where MY best income options could potentially be.
So here I sit. Estimating the number of piglets (the number is 20 at 10 per each sow). Now here are my options: selling weaned piglets for others to raise, raising them for pork and/or supplying roasters pigs for pig roasts.
As a direct marketer, I know it’s better for me to direct market to the consumer. I won’t be tied into the commodity markets and gives me the ability to deal directly with my consumer.
This thought process also made me consider using a farmers market as an outlet.
With my options lined up, I created a roll call list of inputs and listed income.
Example 1: Raising and selling weaned piglets at 8 weeks of age.
I know I need to house, keep and feed the sow. She’s going to take LOTS of feed to keep her producing good milk for the little ones, up to 25 lbs per day. I started with that number at tallied up how much feed she would need.
Then I added in the feed for the piglets, the water, the set up needed (prorated by length of time I think it would survive). Eventually, after factoring in a small amount to pay myself at $10/Hr and electricity I need for fencing, I came up with a total input cost of roughly $55 per piglet. That number is based on 10 piglets. Any less means higher input, any lower number means they are more expensive.
If I sell them as weaned piglets, the farm will generate $100 income selling at $75/each. $450 selling at $100 each.
Armed with this information, I went and did some research into current market price for a direct sale on piglets. That $75 range end up being the median average. I found some recent sale barn data that said they were selling between $45 and $60 per head.
I would get MAYBE break even price if I sell them at auction and would run the risk of losing money too. If I sell them at $75, I would make a little for the farm. If I tried selling at $100, I better have justified reasons on why they were worth that high end market value.
My safest bet to sell them in a fair amount of time at a decent price is direct marketing. Less fuss but also much less income.
Sometimes you have to weigh in and factor the pros and cons. In a direct market system, it means you need to take time to advertise. You spend time negotiating the sales. You need to talk to buyers, arrange pick up times and be available for the acual sale.
Now I have to build timelines. The first sow is due December 1st. That means the earliest time I would have piglets available would be March 1st. When do I advertise and sell, when do I want them gone by. If they aren’t gone, then what are my options.
Here’s how I’ve laid out a timeline:
- Born December 1st
- Market/Advertise February 15-28th
- Pickup and sales March 1st-15th
- Reminders will transition into feeders and butcher hogs
For me, it’s not a big deal if piglets don’t sell. I can raise them to feeders or roasters and if they don’t sell there either, I can butcher them as hogs for pork.
Here’s a run down of how I planned out those 10 piglets based off current farm demand:
- 4 piglets sold at $75 each – $300
- 3 roasters $450 each – $1350
- 3 butcher hogs for pork $600 each – $1800
- GRAND TOTAL SALES: $3250
I’m not making a fortune by any means but the farm is making roughly 15% of that total sales income. In six months, the farm will make just shy of $500 or $50/head average.
Sure, I could try to make more but would the market demand and consumer demand take to those higher prices. I will advertise at higher values and have the ability for some wiggle room.
The whole point of doing is now is so I will know exactly where my income level will be and be watchful for ways to reduce input costs.
Every little bit helps me stay in business and plan for profit. Planning now secures my future and eliminates the losses of having to send animals to the sale barn. It decreases my risks and increases profitability.
Today is all about black and white and red. I’m planning to stay far away from the red zone! The further away I stay, the longer I stay in business.
Next time you buy local, ask a farmer about how they price their goods. I think most will gladly share this type of information. We want you, as consumers, to understand that we aren’t price gouging. We want to produce a solid, good quality product, but we also want to generate profit enough to stay in business and grow.
My $500 in profit may end up going to a new barn and nicer facilities or it may end up in goats. It doesn’t matter where it lands, it will be used for profit and expansions.
If anyone has any questions or needs more information, please let me know.