The Price of Eggs

I thought I’d do a little math exercise today and explore how well I’m doing with egg sales.  We have been selling eggs for about 10 years now.  Currently we have about 50 hens in their second laying year, before their second (and last) moult.  Without getting into my exact husbandry model, I would say my hens are free range on pasture, veggie fed.

• Current price of my eggs:  $4.00/dozen
• These are my costs for 2011 in Canadian dollars:
• Feed  $1270.85
• Shavings (for deep bedding in the house) $51.90
• chicken wire (some fence repairs)29.10
• Total costs:  1373.95
• Income from egg sales: 648 dozen sold X $4/doz = $2592 total gross income
• 2011 total income less total costs = $1218.05 net income for 2011

Which works out to about $25/week, and I estimate that my labour (letting out/shutting in, egg collecting, adding to deep bedding, cleaning out house, refilling nest boxes, topping up feed, setting up fence to switch runs)  for the year for this flock has worked out to 1.6 hrs/week.

That makes my hourly wage $15.62.  I’m OK with that, in fact, it sounds pretty good. Or not.

That’s because I investigated the price of eggs at the local grocery store.  I haven’t done this in a couple of years, don’t even go down that aisle at the grocery store in fact.  But I did last night. Wow!  My farm fresh, veggie fed, free range on pasture, large brown eggs are WAY underpriced in comparison.

Check this out:  large brown $3.49/doz; free range brown omega 3 $5.49/doz; free run large brown $4.99/doz, free range organic large brown $5.69 and organic large brown $6.99/doz.

Now, I know I’ve not included some things in the above calculations that I should – feed went up $.40/bag over the course of last year, and that was not reflected in the egg price to the customer, as it should have been.  Our husbandry model has us replacing the flock every two years, and 2011 was an easy year, ie the hens were in their prime and we didn’t have to raise new chicks (expense of buying and shipping chicks, brooding), nor did we have to process the spent hens for the freezer (labour).  You could say it was a “cheep” year (sorry).  In reality the egg price should include a buffer to absorb those costs when they occur, since it would be a shock to the customer to have the price yo-yo every 2nd year.

Obviously, I’m in a more expensive year for 2012.  I have 55 new layer chicks coming shortly to be brooded, the current flock to be processed, and an eggless month while the younger flock are not yet laying (yes this is a terrible marketing strategy, it’s called poor planning).  The hen house will be undergoing it’s big renovation during the eggless spell, while it’s empty (ok maybe there was a plan of sorts), another expense.  My $15.62/hr is going to have to stretch pretty thin to cover all that.

So clearly, the price has to go up, if for no other reason than upcoming expenses.  By how much is the next question.  In a long standing and friendly agreement, my next step is to call two of my neighbours to discuss raising the price to $4.50, with a view to going to $5 in six months.  What started years ago as a courtesy call from one of them to me and the other guy, has turned into a regular event.  We now traditionally raise the price to the same level at the same time, and because there are three of us, we tend to lead the local pricing.

The last price hike was about a year and a half ago from $3.50. My husband is a bit worried that we’ll price ourselves out of the market, but clearly we’re just going to bring ourselves in line with the two major grocery chains locally.  It could be argued that selling the eggs at a fair price is not about keeping up with the competition.  But when the competition has an inferior product, and gets paid more for it, that’s not fair to me or my family.  Our hens have a happy, healthy, scratching pasture out in the sun kind of life, which produces fabulous eggs.  They are worth the price we will be asking.  It’s true that our customer list might change a little.  We might lose a few people who were onto how cheap our eggs were, and were price driven rather than quality seeking.  But we are constantly turning people away, so I’m sure that it won’t be long before our customer list is full again.