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[RSS] <http://feeds.feedburner.com/goodeaterorg> Backyard Chicken
Economics: Are They Actually Cost-Effective?
<http://www.goodeater.org/2010/05/10/backyard-chickens-running-the-numbe\
rs/>
Mon, May 10, 2010
Farmers <http://www.goodeater.org/category/farmers/> , Sustainability
<http://www.goodeater.org/category/sustainability/>
Line Break
Author: Joshua Levin <http://www.goodeater.org/author/joshua-levin/>
(29 Articles)
[http://www.gravatar.com/avatar/1b061fd20ca8790bc933915960561f70?s=50&d=\
http%3A%2F%2Fwww.gravatar.com%2Favatar%2Fad516503a11cd5ca435acc9bb652353\
6%3Fs%3D50&r=R]
Joshua Levin is a consultant to non-profits and their corporate partners
in sustainable agriculture business development and sustainable food
markets. Joshua holds an MBA from the NYU Stern School of Business,
where he was a Catherine B. Reynolds Fellow in Social Entrepreneurship,
and a BA from Harvard University. He lives with his wife in Brooklyn,
NY.
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If you haven't noticed, there's a nation-wide underground craze
for backyard and urban chickens, to which I too have fallen prey. Yet
the farmer in me has not yet smothered the MBA. The following is an
objective analysis of whether or not the output of backyard chickens can
ultimately "re-coop" the costs. The answer was surprising, and
I have produced 5 key recommendations for economically raising backyard
chickens.
Friends frequently ask me whether or not raising my hens is
"cost-effective". Everything I've read on the subject in
blogs and books says NO. Instead, enthusiasts emphasize personal
satisfaction and pet-potential. These are no doubt the true goals of
backyard chicken-raising. Yet I am weary of deflecting this common
question, and I am happy to further study my birds. Not to mention that
my personal flock serves as a wonderful test case. I raise two hens
(the minimum flock size) in New York City (the most costly and crowded
environment). If I can do this cost-effectively, anyone can!
[IMG 54832 225x300 %organic food]
<http://www.goodeater.org/wp-content/uploads/2010/05/IMG_54832.jpg>
I'll address assumptions as we go, but it is important to note that
I have sought to save money whenever possible, using found objects and
substituting my labor for fancy equipment. The most significant example
is the chicken coop itself. Good wooden chicken coops for small flocks
sell for $300-450. Yet it would take a long time to recoup that money.
I was about to join those ranks, until I found, the dresser. . .
Returning home from a night on the town, I came across a solid wooden
dresser down the block. With a weekend of work, I turned her into a
chicken mansion NYC-size. The first drawer is filled with bedding
material. The second drawer is a perch. The top right drawer is a
nesting box. Everything else is hollowed out. And after several
iterations, I put the whole thing on stilts.
Enough fluff. Let's populate the model:
Up-Front Costs
* 3 rolls of Chicken Wire ($17 ea): $51
* 2 Chickens ($15 ea + $20 gas): $50
* Feeder: $4.50
* Water Bottle: $4.00
* Poultry Grit (5lb, will probably last forever): $8
* Shipping for above items: $3
Total: $121
Freebies [IMG 54531 300x225 %organic food]
<http://www.goodeater.org/wp-content/uploads/2010/05/IMG_54531.jpg>
* Coop: Built from curbside dresser
* Twist-ties: Stole from supermarket
* 2 more rolls Chicken Wire: Neighbor found in trash
Note: It may seem unfair that I acquired 2 rolls of chicken wire for
free. However, I used a lot more wire than most urban chickeners, as I
built a large yet narrow U-shaped run all the way around my garden.
Variable Costs per month
* Organic Feed in 25lb bag ($46; used 3/4 of it) + Shipping: $42
Note on Bedding Material: What about pine shavings for their bedding and
nesting box? This is a significant cost of raising chickens and can run
up to $7 p/week for two hens. Then, I discovered that one can use
shredded paper! All my office paper now spends its purgatory on the
floor of my chicken coop before its final resting place as the main
carbon source in my compost bin.
Future Variable Cost Options per month
* Organic Feed in 50lb bag + shipping (3/8 of $83): $31.50
* Non-Organic Feed in 50lb bag + shipping (3/8 of $36): $13.50
Note: I bought my first bag of organic feed in a 25lb size, as I had no
idea how much these ladies eat. In the future, you need not repeat my
mistake. Based on the lowest price-points I could find online for home
customers, and including shipping, I consider the two "future
variable cost options" to be the two selections above.
Value Produced per Month
* 40 eggs: $20
* Fertilizer: $7.66
Total: $27.66
[IMG 54711 e1273466289227 %organic food]
<http://www.goodeater.org/wp-content/uploads/2010/05/IMG_54711-e12734662\
89227.jpg> Note on Eggs: I calculated the egg value based on the fact
that the best eggs I can buy at the market are about $5.50 p/dozen. As
mine are slightly better, I'm assigning them a value of $6 p/dozen.
Seems reasonable, as I would probably pay my neighbor that much for
super-fresh backyard eggs. My hens are producing 5-6 eggs p/week each.
It's summer and egg-laying is seasonal, so we'll assume 5 eggs
p/week. Furthermore, this all assumes a steady rate of laying across
the chicken's lifespan, which is not accurate. But let's see if
we can recoup the costs in the first 2 years anyway, during which time
laying is at its peak.
Note on Fertilizer: One hen produces about 45lbs of manure p/year. I
assumed 5lbs are lost in the dirt, so we get 40lbs p/annum, or 3.33lbs
p/month. This volume is then reduced by approximately 50% during
composting. At the best price-point for home consumers, you can buy
chicken manure fertilizer online for $3.67lb equivalent. I then assumed
that homemade is 25% better quality, because it's all natural and
more diverse ingredients, as opposed to factory farming. I therefore
value my composted chicken manure at $4.58 p/lb, which, at 1.67lbs of
composted manure p/month, comes to $7.66.
The geekier ones among you may have already noticed that we face a
serious problem. The value produced by two hens comes to $27.66 p/month,
while the cost of organic feed alone is $31.50! We're losing $4
p/month, and will certainly never recover the up-front costs.
[urban chicken eating kitchen scraps lobster e1273466176124 %organic
food]
<http://www.goodeater.org/wp-content/uploads/2010/05/urban-chicken-eatin\
g-kitchen-scraps_lobster-e1273466176124.jpg>
courtesy BackYardChickens.com
[trans %organic food] Chicken feed turns out to be the real cost
driver. Unless you are willing to use non-organic feed, the key to
solving this dilemma turns out to be substituting some percentage of
chicken feed with local organic matter. I am referring to a combination
of free-ranged food (insects, seeds, and plant sprouts) and kitchen
scraps. If you have a nice backyard, the former is a great option.
With careful management and a lot of space, chickens can in fact be
almost entirely grass-fed. And the following post on
backyardchickens.com details what kitchen scraps chickens will eat
<http://www.backyardchickens.com/web/viewblog.php?id=2593-Treats_Chart>
.
If you can manage to achieve an ambitious 40% feed replacement with
local organic matter, the following is the result of my break even
analysis (how long it will take to recover all your costs, including
up-front costs) using the input data I described above:
[Break even point and cost of backyard chickens1 e1273464969475
%organic food]
<http://www.goodeater.org/wp-content/uploads/2010/05/Break-even-point-an\
d-cost-of-backyard-chickens1.jpg>
As you can see, using non-organic feed, the break even point is 6
months. Using organic feed, you can actually break even with your two
backyard hens in 14 months. This is great news for urban
chicken-lovers.
However, 40% use of local feed material is pushing it for most busy
urbanites in small spaces. I therefore performed a sensitivity analysis
to determine how much the break even point changes depending on the % of
feed you replace with locally available materials:
[Cost of Backyard Chickens sensitivity of break even point to feed
replacement1 e1273465023908 %organic food]
<http://www.goodeater.org/wp-content/uploads/2010/05/Cost-of-Backyard-Ch\
ickens_sensitivity-of-break-even-point-to-feed-replacement1.jpg>
What we learn from this sensitivity analysis is that the % of feed
replacement doesn't matter as much for non-organic feed. But for
organic feed, it makes all the difference. At 50% feed replacement, you
recover all of your costs within a year and you will almost be on par
with using non-organic chicken feed not to mention you will have
tastier eggs. Around 18-19% feed replacement is the tipping point, at
which time it will take you over 5 years to recover your costs, yet your
hens will have stopped laying eggs. That's when you know you should
have bought Apple stock instead.
In conclusion, I find that it is indeed possible to raise only two
chickens in urban environs and recover your costs within 1-2 years.
Furthermore, based on these analyses, I offer the following 6
recommendations for economical backyard chicken-raising:
1. Reduce up-front costs. Whether you build or buy your coop may
determine if you ever recoup your [IMG 5489 300x225 %organic food]
<http://www.goodeater.org/wp-content/uploads/2010/05/IMG_5489.jpg>
investment.
2. Organic chicken feed is the primary cost-driver. Free-range and
serve kitchen scraps in order to replace at least 20% of your
chickens' food intake. 50% replacement is ideal, after which cost
savings become more marginal. Furthermore, chicken wire is expensive.
If you completely free-range, you save both this fixed cost and feed
costs.
3. Using non-organic feed while this may be completely contrary
to your mission changes the numbers significantly and ensures cost
recovery within a year.
4. Adding another chicken doesn't really matter. Because your
gross margin (both # of eggs and cost of feed go up by 50%) remains
about the same, it will still take roughly the same amount of time to
recover your costs.
5. Collecting and composting your chicken manure is a game changer.
For example, at 50% feed replacement, harvesting your manure reduces
your break even point with non-organic feed from 10 months to 6 months,
and with organic feed from 28 months to 10 months!
[IMG 53352 e1273465077234 %organic food]
<http://www.goodeater.org/wp-content/uploads/2010/05/IMG_53352.jpg> At
the end of the day, it would be completely irrational to decide whether
or not to acquire backyard or urban chickens based on this financial
analysis. For example, in the first month alone I spent something
approaching 70-80 hours setting up their coop and run, chasing them
through neighbors' yards, and just watching them, none of which I
included in this calculation. Obviously, no one would perform such an
analysis in order to determine whether or not to get a dog and
they don't even lay eggs! But given that you may be coming down
with a case of chicken fever, this analysis can help us to better
understand our own practices and where our energies are best spent when
trying to contain costs.
