Friday, April 18, 2008

Price Elasticity

We have been selling eggs at the street for a week now, and things are looking good. At $2.50 per dozen, we have been selling eggs faster than we are producing (we had a little bit of inventory built up). I want to watch sales for at least a couple more weeks before drawing any firm conclusions.

Thursday, April 10, 2008

Path to Profitability?

I have been carefully analyzing our chicken expenses. And things don't look too good. Our current calculation shows a cost of $2.04/dozen (including the carton) if we amortize the cost of raising the chicks to laying age over a 20 month production lifetime.

Many of the local flocks are selling eggs for $2.00/dozen. Of course, some of them don't have very good eggs. To quote my lovely farm wife Catherine, "They have icky whites." At least she has not become an egg snob...

Based on my decades of experience in business I am thinking we need to reduce expenses and/or increase our sales price. Smart, huh?

We stopped by Clark's Grain Store and I chatted with The Guy about volume discounts, etc. It turns out that we want to stick with Blue Seal Layer feed, because it gives the best and most consistent nutrition. It turns out that volume discounts start at about three tons of loose (not bagged) feed. With our current flock, it would take us about two years to use that up. And I have no place to store it. For bagged feed, we can get about 10% discount if we buy at least one ton. That would take about 40 weeks to consume. I bought five bags and saved about 1%. Yay.

So we have raised the price for our eggs to $2.50/dozen. Our eggs are great quality (because we are feeding the good stuff), and they are distinctive because of the Araucana "rainbow" eggs. Time to do some marketing.

Friday, April 4, 2008

Predators Solved?

We have had no more problems with predators. All the girls are happy, healthy and laying like crazy. The one remaining rooster struts around the coop like big man on campus.

Everyone is anxious to get outside - each time I open the coop door, everyone starts to make a run for it. We still are buried under a few feet of snow, so I have been keeping everyone inside. We have had been having some warm weather the last week or so and have had some good meltage. Of course, it has been snowing all morning. Ugh.

We have been selling lots of eggs, mostly to friends and family. We have been charging $2 per dozen, which is what most of the small flocks charge around here. I have also been tracking expenses. Unfortunately, it looks like our expenses are more than $2 per dozen. We have some work to do on marketing/pricing. In addition, we need to see if we can get a better deal on feed (our primary expense).