Website owner:  James Miller

Is it cost-effective to raise livestock and grow your own food?




   It is very easy for a farmer to deceive himself.  He can very 
   easily be working hard from morning until dusk and think he is 
   doing great and in actuality be working stupidly.  He may in 
   reality be working for little or nothing or even running a 
   money-losing operation.  Whatever you do, even if you are 
   running a homestead in the country, it is important to work 
   smart, not stupidly.  That means you have to think, figure and 
   calculate.  You have to know how much your operation is really 
   costing you in time and money and if what you are getting out 
   is worth the cost.  To do this you have to keep detailed 
   records and know the cost in both money and time.  And that 
   adds a lot of overhead in itself.  It may not always be 
   practical, in which case there may be some ambiguity as to how 
   well you are doing.  If you are producing things like meat, 
   milk, eggs and other kinds of food it is important to produce 
   only as much as you will use (unless you are able to sell the 
   excess that you produce for a profit --- which requires that 
   you have a market, and may not be practical).  If you produce 
   more than you can use the excess is wasted and you are 
   expending money and work that is going down the drain.  If you 
   raise goats, for example, that produce more milk, meat, etc. 
   than you can use you must either be able to sell the excess at 
   a profit or you may be deceiving yourself with an operation 
   that is returning you very little or nothing on your labor, 
   money, etc. --- a system whose input is greater than the 
   output.  If you are raising animals the animals are supposed to 
   be supporting you.  They are supposed to be not only paying 
   their own keep but providing you with a decent return on your 
   time and labor.  If you are calculating wrong, you may indeed 
   be supporting the animals in the same way you do children or 
   pets.  If you are looking for financial self-sufficiency you 
   don't want to raise pets.  It may indeed be more sensible to 
   buy meat and milk on the market (that has been produced by 
   modern, efficient mechanized methods).  The same thing applies 
   to raising potatoes, tomatoes, melons, etc..  Grow only what 
   you will use (unless you can sell the excess at a profit).  
   Otherwise you may be working for nothing, investing a lot of 
   work and money, when it would have been more cost-effective to 
   just buy on the market.  Many things can be produced so 
   efficiently by modern mechanized means that the smartest thing 
   to do may often be to simply buy it on the market.  You can't 
   compete.  If, for example, you attempted to raise rice or 
   wheat, you would likely spend many hours of work in raising a 
   dollar's worth of grain (as much grain as could be purchased 
   for $1.00 on the market).  You can't afford to invest in the 
   big expensive equipment required to raise it by modern 
   mechanized means and you can't compete with them. 

   Let us examine a specific example.  Suppose I and my wife were 
   living on a homestead.  Would it be cheaper for us to raise 
   chickens or to just buy chicken and eggs in the supermarket?  
   Answer: It would be cheaper and much easier to just buy in the 
   supermarket at current supermarket prices.

 Analysis.  
   How much chicken would I estimate that we would consume in a 
   year?  Even if we were consuming a lot of meat we wouldn't have 
   chicken for dinner more than three times a week (on average). 
   Other days of the week we would have some other kind of meat 
   (i.e. ham, turkey, tuna, salmon, etc.) or have a meatless 
   dinner.  Three times a week amounts to 3x52 = 156 days a year.  
   Assume a serving size of 1/4 pound.  That comes to 2x156/4 = 
   178 pounds of chicken a year for the two of us.  Assume a price 
   of $1.80 a pound (although you can often find it on sale in the 
   supermarket for half that).  That comes to $140 a year.  We 
   don't eat many eggs.  Assume ten dozen a year at $1.00 a dozen.  
   That comes to $150 a year for meat and eggs.      

   Can you raise chickens for that price?  No.

   First you need a chicken coop.  Assume a cost of $1200 for an 
   8'x10' chicken coop built on a slab.  If you assume a 5% 
   interest rate you are losing .05x1200 = $60.00 per year on 
   interest.  Assume a 20 year depreciation on the chicken coop.  
   That gives a depreciation cost of 1200/20 = $60.00.  So lost 
   interest plus depreciation adds to $120.00 per year.  That 
   leaves $30.00 per year for the cost of chicken food and other 
   expenses.  And you haven't even tried to put a cost on all the 
   labor involved in raising chickens --- feeding and watering 
   them, cleaning the chicken coop, slaughtering them, 
   defeathering them, cleaning them,  cutting them up, etc..  
   Suppose your labor amounts to 30 minutes per day.  That is 182 
   hours per year.  How much do you want to allow per hour for 
   your labor?  $6.00 per hour?  That would come to $1095 per 
   year. 

   Another problem:  Who would take care of the chickens if you 
   wanted to take a trip or vacation? 

   You could apply this same kind of analysis to raising rabbits 
   (or anything else for that matter).  How much rabbit are you 
   likely to consume in a year?  How much would it cost you in a 
   supermarket (it or an equivalent meat)?  How much would it cost 
   you to raise the rabbits?  How much time would you spend on 
   them in a year in feeding, watering, cleaning, slaughtering, 
   dressing, etc.?  What dollar value would you wish to put on 
   that time spent?  Would you average 15 minutes a day on them?  
   At $6.00 per hour that would be $547.50 a year.  If you 
   averaged only 7.5 minutes a day on them it would be $273.75 per 
   year just in the value of your labor.  Then there is the 
   question of who would take care of them if you wanted to take a 
   trip or go on vacation. 


   Apr 2001




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