Tag Archives: pasture

Costs of Products

I was part of an interesting conversation today about the prices of Organic Food versus Other Food. I’m going to attempt to break it down so non-producing people can understand.

Each farm does things differently, each step costing a different amount. In a traditional business, we call this production. In farming, the consumer associates that word with assembly lines of animals or parcels of land providing goods at the expense of those who care for it or them.

As a farmer, each thing I do has a cost associated with it. We call this the cost of production. It covers everything from seeds, fertilizers, wages, marketing and feed. It also covers taxes and fuels and every other thing in between. Businesses call this overhead. Small farms are like those boutique shops where everything is done on a smaller scale and products are limited. Larger farms are like chain stores where they get discounts for what we call “purchasing power.”

With these comparisons, just why is Organic more expensive if it doesn’t involve costly fertilizers and spray chemicals? It’s actually rather simple to do the math. For example purposes, I am going to use the terminology of convention and organic with no line drawn in the sand between the two. I am not a supporter of either system for various reasons.

Let’s take a look at things that are the same for both systems:

1. Land taxes – Yes they vary from town to town, county to county and state to state but each acre of land has an associated cost of using that land.

2. Insurance – It doesn’t matter what type of farming you do. Building insurance, farm machinery insurance and auto insurance all have fees associated.

3. Electricity Consumed – Unless a farm is providing its own electricity through wind, solar or capturing methane gases, there is always a cost for fences, lights, milking pumps, water, etc.

Here’s where things start to drastically vary:

1. A Consolidated Feeding Operation (CAFO) will utilize more harvested and stored materials while Organic utilize more pasture based systems.

  • CAFO have high costs associated with planting, maintaining and harvesting materials. Organic has high costs for fencing and electricity to charge the fence.
  • Most farms purchase supplements grains. Let’s say Conventional or GMO corn is selling for $4.25 per bushel provided, Organic Corn for feed is selling for $10.00 per bushel. Most Organic farms do not have the “buying power” discussed about to play the market futures for corn commodities either, which results in slightly lower price structures. On these market based reports, Organic corn for feed costs 242% more.
  • On CAFO operations, the overhead costs of lights are at a lower input rate on a per head basis. If you are comparing at 100 cow dairy to a 1,000 cow dairy the prices to provide lights, heating/cooling, water and other associated costs are normally close to the same cost per month. So if that monthly bill is $200, it’s a $.50 fee per cow on the small dairy and $.20 fee per cow of the larger farm. It works the same with fuel to provide feed.

2. It isn’t that Organic farms don’t use fertilizers, sprays or chemicals. It’s that what can be used is limited. With any other “specialty” market, we expect to pay higher prices for these goods. You can do some research via the internet and discover the differences in pricing structures and what’s allowed for organics according to the USDA.

As you can see, Organic is in my view-point a much costly endeavour due to feed costs alone. Organic farms also deal with different commodity brokers or do much of their own marketing on smaller farms. No answer is ever simple and it’s difficult to express the real differences in costs. Again, this is another reason I suggest you purchase from a farm you can talk too. Boxed goods on the shelf, unfortunately, do not tell us the real story behind the scene.

If there is anyone who would like to sit down and discuss our pricing structures, we always welcome you to come look over the books. Here on our farm, we do not fit into the brackets of conventional or organic. We base our choices on economic, environmental and animal benefits. The system we use isn’t a marketing tool, but instead a sound decision based off those three aspects. I will keep all opinions on both of these productions to myself today. If you want to know more, feel free to comment or send us a message via twitter or Facebook.

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My Rant!

Do y’all remember back when I did the “13 Questions” blog post and I talked about how differently women get treated within the Ag sector. WELL….let me just explain how different women are treated!

A little background first…I am no stranger to digging deep to get what I want. An example of this is the grant we just received. I have done my homework, spent countless hours researching and networking to learn all I could about rotational grazing. Even went to the extent to build a small area as a “test plot” to try the whole concept out. I was told by our local NRCS and Soil & Water representatives to NOT move forward with permanent fencing until we were completely approved for the grants being filed. Alright, I will admit I am not a patient person and I drove them crazy with phone calls asking for updates, double checking on dates, etc, etc. BUT, low and behold we finally got approved for a $60,000 project that includes new seeding, soil amendments, perimeter fencing and a water system to ensure water supply to the cows.

Problem one: I don’t really know the first thing about high tensile fence. It has been a SEVERE crash course in construction, post holes and rock formations. But in the end and after several serious conversations, I feel equipped to talk to people about what I want. Five strands, three of which will be “hot” or electric strands with two that work as grounds on posts every 50 feet or so; 13 gates, 10 are spring gates while the remaining 3 are tubular steel….Does anyone notice anything too difficult yet? Didn’t think so. Now there are 26 corners and 22 ends. I can even give you a rough estimate of the number of posts. Then there are the extras like tensioners, the gizmo to supply juice called an Energizer, ground rods, crimping sleeves and some other odds and ends. Still don’t see anything too difficult, do you? Nope me either.

Our allotment of funds is equal to around $2.09 per foot. Okay, well that’s a little low so I know I am going to need to put in some line posts myself and that I will need to also string the wire myself…with a little help here and there of course. During my conversations with these various fencing companies, I have been continually asked if I want it done the right way. Seriously? UMMMMM….NOPE I THINK I WANT IT TO FALL DOWN IN A YEAR!

Okay, well what is the worst is that I actually had a contractor tell me he would be willing to come in to do the job for around $2.00 per foot, completely installed. NOW that I have a quote in hand, the price is more like $2.50 a foot. I ask how much for just corner post and end post installation…to which I seriously got this response: “I will pay you $14 an hour for any work you do.” Okay, you are billing me at $30 but you are going to “knock off $14” and if I get hurt too bad because I am the landowner? And I’m using my own equipment (ie: four wheeler and the spinning jenny to unroll the wire)? What’s wrong with this picture? OH MY GOD wait…this is for 4 strand, not 5!!!! Did you listen at all? Apparently not!!!

The issue above is just one of many but it continues over about four different companies. Alright fine. I’ll start calling locally to find out just what equipment is available. One guy, Bub, has a post pounder I can use for FREE. Another guy, Troy, has a post hole digger with a rock bit (we have lots and lots of shale rock) that I can use. SCORE!!!! I have a tractor, truck and four wheeler. I CAN DO THIS! So I sit down with Rich and we come up with a lengthy list of supplies needed. I make a phone call on a price quote for just the supplies (which will total around $15,000 prior to shipping). Yup, they will send me a quote to turn in. Yup, I think you have everything listed you need. Yup, we will email you the quote. SIX HOURS LATER another fence company CALLS ME.

Oh, we are the fence company for this supplier. I’ll bid it all out for you. We understand you are extremely upset over the way other fence companies have been. I’ll get you a quote directly. Give me an hour. THREE HOURS LATER STILL NO QUOTES FOR THE JOB OR THE SUPPLIES.

So let me explain something to all you MEN out there! Listen close because you are really starting to wear on my last nerve and Tractor Supply is about to get my business. Be respectful of the ladies when you talk to them. We are a growing sector within the industry and YOU DO NOT NEED MY PARTNERS APPROVAL FOR JACK SHIT! It is my fence. It is my project and the fence is going where I WANT IT TO GO. I know what I want and I will get. Don’t want to work with me…FINE! I have no issues with that. I will do the whole damn job myself! No big deal. I am sure there are enough people out there I can offer to pay $14 an hour and they would love to have the work. Or maybe I will just be greedy and keep all the money in MY POCKET SINCE IT’S OUR TAXES THAT PROVIDED THE FUNDS ANYWAY!

Seems to me y’all would want to work with someone who is having issues keeping animals inside a fence. I would have been forever grateful to anyone who could have pulled their egotistic male head out of their own ass long enough to actually be respectful.

End of my rant!