Economics of heritage breeds

Allow me to start off by stating unequivocally that chicken should not be cheap. Or rather, more precisely, good chicken should not be cheap. (That trash that litters supermarket shelves most certainly should be cheap; its price reflects its quality.) Problem is, we live in a culture that treats chicken largely as a throwaway commodity, as something whose mere purpose is to fill our bellies until the next round of food comes by. (This is, one might rightfully argue, the way we treat our food as a whole, but in the world of meat it applies most precisely to chicken.) I like to think that many of us suffer from something we might call “cheap chicken syndrome,” a thankfully curable malady that nevertheless poses problems for small farmers.

The primary reason for this syndrome, it seems to me, is the simple fact of vertical integration in industrial broiler (meat chicken) production. In the United States, Tyson and Perdue are two of the biggest players. Don’t expect much better from the likes of Smart Chicken and such. From a business perspective vertical integration is viewed in a positive light, as it allows one company to reap the rewards—namely profits—of controlling production from the top down. But we must ask who the real beneficiaries of this production system are. Is it the farmers–if we may refer to them as such–who go into massive debt to build massive confinement chicken houses requiring elaborate waste processing systems (and often enough still polluting the groundwater and stinking up the neighborhoods), who are in essence treated as feudal serfs and who may or may not be granted the “privilege” of raising more birds next year, all for the “privilege” of making enough money to pay the interest on the confinement houses and a little more besides? Not likely. Is it the rural communities whose aforementioned groundwater and air quality are compromised for the sake of cheap food? Probably not. Is it the many underpaid and overworked undocumented immigrants along the line who can be so abused precisely because they are undocumented and, in the eyes of those who make such decisions, expendable? Doubtful. Is the consuming public who must wonder with trepidation at each package that’s opened if the contents therein will be laced with illness-causing forms of E. coli or salmonella or perhaps foreign matter such as bits of plastic and such, or blithely go on pretending that stuff could never happen to them? I don’t think so. Is it the small local farmers who must charge what to the general public seems an exorbitant amount for food that is unquestionably better, with hopes of actually making a bit of a hard-earned profit in the end? Again no. Is it the corporate executives who manage such companies? Aha! They’re the ones—the only ones—stuffing their pockets and making do from vertical integration. Well that’s one mystery solved.

The second reason for this “cheap chicken syndrome” is, as I see it, the intensive breeding efforts that have created a chicken capable of growing at an unnaturally fast rate and using an unnaturally small amount of feed to do so. In farmer terminology this is generally referred to as “feed efficiency” or “feed ratio” and describes how many pounds of feed it takes to produce one pound of meat. For industrial chicken production that figure is currently down to about 2.1:1. In other words it takes 2.1 pounds of feed to add 1 pound of meat to a bird. (This results in a bird that reaches butcher weight in as little as an astonishingly short 5 weeks.) Because feed is the most expensive input in chicken production it is clear why breeding with the goal of increasing feed efficiency (and thereby lowering the feed ratio) is paramount for those whose purpose is producing cheap food. But as a result of this freakish production model consumers have come to expect cheap birds—indeed, most have never even seen a properly raised chicken—and they often experience sticker shock upon seeing the price of a chicken with a proper feed ratio from birds who grow at a natural rate without the physical defects of their industrially-bred brethren. (The feed ratio of our heritage chickens depending on breed is in the ballpark of 5:1.)

(As an interesting aside you may enjoy watching the video titled “The Chicken of Tomorrow” which documents the advent of industrial broiler production in the 1940s, though its amazing to see how benign such production was then and how corrupted it has become since.)

And the third major contributor to “cheap chicken syndrome,” which is to say another reason we have come to expect cheap food generally, is the much-documented notion that industrial food does not accurately include all costs of production. Others have articulated it better than I can—I assume the idea comes up in multiple Michael Pollan books; Joel Salatin the Virginia farmer highlighted in Pollan’s best-selling “The Omnivore’s Dilemma” is a writer himself who clearly describes such practices—but in short what is the cost of repairing environmental degradation resulting from industrial food production? What is the dollar amount of damage done to local communities, both in terms of groundwater and air pollution and overall quality of life? How much would a Tyson chicken cost if all of the laborers along the supply line were documented and paid a living wage?

In short, cheap chicken is only artificially cheap. There is nothing inherent in chicken production that requires that it be cheaper than say beef or pork. That is, there is nothing about the species Gallus gallus domesticus that necessitates that its retail price be lower than Bos taurus or Sus scrofa. So, to be honest, it is more than a little frustrating when consumers will gladly fork over $25 or so for a 3 lb. beef chuck roast but will balk at the mere thought of spending $15 or so for a chicken of the same size. “That much for a chicken?” is not an unheard comment (with the word “chicken” being spoken with a tone that implies disgust.)

So what is the true cost of raising a chicken that has a proper growth rate and proper feed ratio, one that is raised with care outdoors rather than in an intensive indoor system and which is processed on-farm where quality is the utmost concern, rather than a factory where birds processed per minute is the primary concern?  What follows is a breakdown of our own production.

Costs per bird, on average:

  • Day-old chick from hatchery: $0.75
  • Mileage (fuel, oil, vehicle wear-and-tear, etc.) to pick up chicks from hatchery: $0.10
  • Feed cost to raise chick to butcher age: $7.00 (20 lb. at $0.35/lb. for non-GMO grains)
  • Mileage to pick up feed from local mill: $1.00
  • Processing (equipment depreciation & propane use): $0.30
  • Freezer bags, clips, and labels (for on-farm processing): $0.40
  • Shelter depreciation: $0.50

That’s $10.05 for a chicken that averages around 3 lb. dressed weight, or a production cost of $3.35/lb.  So if we charge $3.35 per pound we cover our expenses and make not a dime of profit.  And honestly, that’s really bad accounting; I haven’t included labor, marketing costs, electricity usage to keep brooder lamps on and freezers running, opportunity costs, or probably a host of other little things whose omission would cause any good accountant to bury his face in his hands.  Those are just the direct, easily measurable production costs.

At our current price of $5.50/lb., we net (again, just using those production costs) $2.15/lb., or $6.45 per bird.  That’s six dollars and forty-five cents for something we spent 16 weeks producing.

Now let’s break down the time and labor involved in raising a batch of 200 chickens:

  • Picking up chicks from local hatchery, round trip = 2.0 hours
  • Picking up feed from local mill, 45 minutes each way, four round trips = 6.0 hours
  • Care for chicks in the brooder, 35 days, average 15 minutes per day = 8.75 hours
  • Care for chickens on pasture (feeding, watering, moving shelters), 77 days average 45 minutes per day = 57.75 hours
  • Butchering and packaging, two people (8 batches of 25, 3 hours per batch) = 48 hours
  • TOTAL: 122.5 HOURS

So that’s 122.5 hours spent to produce $1290 worth of net profit (200 birds at $6.45 per bird net), which calculates out to… $10.53/hr. And honestly, that’s a number I’m perfectly happy with. No, we’ll never get rich making $10.53 per hour, but we’ll have enough. The point is, by charging $5.50 per pound for our chickens, by no means are we making a killing. We’re just trying to make a living.

By no means is this intended to bemoan the expense of raising heritage chickens, or the labor involved, or to complain about anything for that matter.  The point here is to show why it is that heritage breeds cost so much more than conventional hybrids—even those raised locally and on pasture—and to be transparent and demonstrate that while we’re charging a lot more than most chicken producers, we’re not exactly banking on this enterprise as our retirement plan.  It, really, is a labor of love.

2 thoughts on “Economics of heritage breeds

  1. Pingback: TBF 059 :: Selecting Heritage Meat Chickens, Farm News, and a Hard Lesson Learned

  2. Pingback: TBF 061 :: Selecting Heritage Meat Chickens Part Two, A Rainy Farm, and a Hard Lesson Learned

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