Egg ‘profits’

A couple of years ago I asked one of our local grocery store managers (there are two grocery stores in the valley)  how many dozen eggs per week the store sold: the answer was 1500 dozen. That means  our community spends annually at least $312,000.00 on eggs, and likely twice that considering the second store! We are a remote, economically depressed community. Imagine if all that money kept circulating in our valley instead of the majority (the local stores keep a small percentage  of that money in retail mark-up) going to an anonymous corporation  a thousand kilometers away.  If we could develop a local food system, this money would be used to support small family farmers, who could farm in an ethical manner as I do. Then, our community would  not be supporting which treats animals inhumanely, raisies eggs of questionable integrity,  and polluties the environment with long distance egg travel–and let’s not even start on the idea of freshness!

Why am I on about this? I was recently crunching the numbers to see if I could make my farm economically viable through the egg business. Here are my preliminary calculations:

  • I am trying to build my flock up to 99 laying hens and am almost there. Hens only lay well for approximately 40 weeks per year(industrial producers might achieve 46-50 weeks by confining the birds in artificial conditions, stimulating them with artificial light, mutilating them,  and feeding them antibiotics and hormones). So:
  • 99 hens x 1 egg per day (almost) x 6  days per week = 594 eggs per week;
  • 594 eggs per week divided by 12/dozen = almost 50 dozen per week;
  • 40 weeks (to give the benefit of the doubt) x 50 dozen x $4.00 per dozen (average cost based on local grocery store)= $8 000 gross income.
  • That doesn’t sound too bad until you factor in the feed cost (which has increased dramatically recently) and the costs to build a henhouse, buy the chickens as day-olds, transport them to the farm, provide electricity for lighting and/or heating to raise them and keep water from freezing during the winter, provide bedding material (including trucking it to the farm), and pay the occasional vet bill. Oh–and factor in the mistakes, blunders, ice storms and power outages (e.g. 47 new chicks and no extra room in your bra to keep them warm!). How much is left of the gross income? It doesn’t take a sharp pencil or further detailed calculations to realize there will be next to nothing left over at the end of the year!
  • Other expenses that must be factored in if you are to make a serious ‘go’ of it include: the up-front cost of the building to house the hens, nesting boxes, roosts, waterers, feeders, and special lights for heating the chicks as newborns; egg cartons and their labels (legally you can’t re-use cartons!); and annual taxes –which are not lessened unless you obtain farm status, an increasingly difficult thing to achieve.
  • Additionally, there are labour costs. Like many small farmers, I have chosen to work on my farm rather than develop a career (for which I am well qualified) which would give me a good wage, full benefits replete with life and disability insurance, a pension plan, unemployment insurance and paid leave. Instead of selling my time to an employer, I choose to spend it conscientiously:  caring for my birds; checking their feed and water daily; letting them in and out twice daily; changing their bedding regularly; collecting and cleaning eggs; putting them in cartons daily; delivering them to customers; doing the specialty chores (which take an inordinate amount of time) like giving them greens or conducting the Poopy Bum Patrol; creating an ecologically sustainable farm; contributing to local food security; practising local economic development; increasing my community’s social capital; advocating for food sovereignty through meetings, discussions, educational workshops, and writing this blog; researching, reading and learning from mentors and trail-blazers.

In fact, as I write, the powers that be are considering upping the amount of money which a small farmer like me needs to make on a farm of 2 to 10 acres from $2500 per year to $10 000.

That increase in requisite gross sales volume will put many small farms in British Columbia, Canada,  out of business. According to Statistics Canada (2006) there are 19 844 farms in B.C. 9466 of them make less than $10 000 gross sales each year. In other words, if the powers that be have their way, nearly 9 500 family farms will go out of business!

The increase in required gross sales revenue, coupled with the Egg Producers Marketing Board’s ceiling of 99 laying hens, make it impossible to keep a two acre farm in non-industrial egg production alone.

Ah, you say, what about economies of scale? Why not get bigger? Why not have more hens? Because I’m not allowed to, that’s why.

Here is the British Columbia government’s regulation:

The British Columbia Egg Marketing Board (BCEMB) issues egg layer quota to registered egg producers. An egg producer is legally required to obtain quota from the BCEMB if they have more than 99 layer hens. Registered producers with quota are bound by the BCEMB’s Standing Order to produce eggs according to provincial and federal legislation.

The BCEMB Standing Order defines a layer, applied to chickens, as a laying hen, layer, and any class of a female chicken hatched for the purposes of egg production that is aged nineteen (19) weeks or older.

[See BC Egg Producers Board for more information; but be forewarned, it is difficult to wade your way through to understanding the rules and regulations–I’m still wading.]

The British Columbia Egg Producers Board governs how many laying chickens anyone is allowed to keep, without getting ‘quota’ (say, 10,000 or more). This legal exclusion of chicken numbers between say, 100 and 9,000, severely limits the ability of a ‘would be’ farmer to grow and develop a sustainable, economically viable, environmentally-more-sustainable-than-the-system-we-are-locked-into, local business.

Somewhere in these pages, there seems to be a window of exemption for  a flock of 99-399 flock limit, but I have yet to be able to find out how this is achieved. The next  stage up is 1000-3000, the ‘Small Lot’ farm. There is an application form on the website; however, it is not as easy as filling out the ‘Small Lot Authorization’ application form. You cannot simply grow your business the way you you see fit: if you want to be bigger than 99 or 399, you must decide which of the categories–Free Run, Free Range, Organic, Certified Heritage Breed (along with requisite mountains of paperwork, reporting, etc.)–you wish to comply with, and the mountain of paperwork you are willing to submit yourself to.

Here is a sample of the less-than-crystal-clear legal requirements:

Small Lot Authorizations – The Board has established a Small Lot Authorization program to a maximum of 10,000 layers.  A person who wishes to keep or maintain more than ninety-nine (99) layers but three hundred and ninety-nine (399) layers or less, must apply annually to the Board to be exempt from: the requirement of obtaining a licence, registering as a Registered Producer and paying marketing licence fees if they do not market their eggs through a Federally Registered grading station. The following conditions apply: (i) No person shall keep or maintain, in concert with another person or persons, such layers in facilities contiguous to or a part of each other, such that in aggregate, the number of layers kept or maintained, would if kept or maintained by one person in such facilities, require that person to obtain a licence and register as a Registered Producer. (ii) No Registered Producer shall permit a person exempt from the requirement of obtaining a licence, to keep or maintain layers in the Egg Production Unit of or in facilities contiguous to or that ordinarily would constitute a part of the Egg Production Unit of the Registered Producer. (iii) The producer is certified organic, certified heritage breed, certified free run or certified free range by an agency meeting the criteria contained in SECTION 7(p). (iv) For certified heritage breed flocks the applicant must demonstrate that 99 birds is too few for the maintenance of a viable heritage flock. (v) If the producer direct markets their eggs ungraded at the farmgate the producer must be in compliance with the Agricultural Produce Grading Act, Shell Egg Grading Regulation.  Should a producer decide to market eggs as Canada Grade “A” the producer must also pay Marketing Licence Fees on product marketed through a registered grading station. (vi) Priority for entrance into the Small Lot Authorization program will be given to applicants producing specialty eggs, including certified organic, certified free run and certified free range in regions outside the Lower Mainland. (vii) Persons currently holding laying hens that may qualify for a Small Lot Authorization have until December 31, 2006 to complete and submit an application for Board approval. (viii) If required, a waiting list system will be established for the Small Lot Authorization program.

This is not the end. You must meet the ‘New Entrant’ requirements. What are they? Ah, well … all is on hold, and has been since June 13, 2007 when the Egg Producers Board put out the following letter:

June 13, 2007

To : New Entrant Applicants

From : Mike Gillanders, Operations Manager

NEW ENTRANT WAITING LISTS

At their meeting May 30, 31, 2007, the BC Egg Marketing Board (BCEMB) reviewed the BC Farm Industry Review Board (BCFIRB) decision on eligibility for New Entrants and addressed the waiting list process that has occurred over the past several years while the BCFIRB reviewed the New Entrant policies. Due to uncertainty of how waiting lists would work and who would be eligible, the process has been very confusing for everyone involved.  The BCEMB Directors therefore resolved to replace the New Entrant selection by waiting list with a New Entrant selection by lottery. As a consequence, the Standing Order will be revised to remove the sections dealing with Waiting Lists and a new section will be drafted to detail how a New Entrant Lottery will operate. Once the new policy is approved, the details will be posted on our website and you will receive a copy.  Any persons who have paid the Waiting List fee will receive a refund.

Despite the fact that I don’t have inordinate material aspirations, the limitations imposed by the BCEMB are painfully prohibitive to my aspirations of working from home and increasing our community food security. It’s no wonder there has been a mass exodus from the rural communities and family farms, and a concomitant burgeoning of cities and their environmental issues. Why would anyone want to try to develop a farm and raise food for their communities when the profits are too low (or non-existent), and the barriers are too high?

When you cannot grow your business as you wish (build your chicken flock up to a reasonable number–beyond the allowable 99 but in keeping with your farm size and sustainability–without having to jump major ‘exemption’ or ‘special status’ hoops that might provide you with an actual profit at the end of the year), what is the incentive to farm? How can a small egg producer in BC avoid throwing in the towel and working off the farm, returning to the city, and becoming part of the unsustainable urban flock?

 

Advertisements

8 Comments

Filed under Animal issues, Chickens, Ethical farming, Food Security, Locavore, Politics of Food, Sustainable Farming

8 responses to “Egg ‘profits’

  1. Crazy! $10 000 gross a year is way too high. I cannot imagine. That’s backwards thinking for these times.

  2. EJ

    Plus the eggs must meet CFIA standards.
    You could fly under the radar, buy feed as Clint Eastwood (lots of people do here in se BC), sell you eggs to friends and neighbors for $5. But its pretty bleak out there for farmers.
    Don’t forget to take no commercial hatcheries in BC left into consideration, either…

  3. The more I learn, the more I think the regulations just about everywhere are absurd. I feel lucky that in New York State, you’re legal if you stay under a few thousand birds (!). Only if you sell direct to consumers though. No wholesaling or restaurants. I found similar though – The regs are fairly easy … as long as you are a tiny operation. Once you’re talking about an actual small farm, it gets complicated. Very complicated.

  4. Big business runs the government! It’s the same the world over, that’s how they get so rich and why we are left with having to buy cr*p food.

    Sadly there aren’t enough of us I feel to be successful at lobbying and the majority of people will just opt for cheap food (especially in this economic climate) without questioning it’s origin and production. It would take a extraordinary shift away from centralised government (ie the practice of revolving doors*) to help local economies.

    * think the Monsanto effect; their employees get into the FDA jobs and FDA people end up on their board – but they do insist there is no conflict of interest!

  5. Great post. This is one of the things that make your blog as good as it is.
    SBW

  6. Pingback: Egg Marketing Boards | Strocel.com

  7. Rob

    Thanks for your post. Do you know if farmer’s have to buy an existing quota to produce eggs like milk producers do?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s