Homestead New Year Planning and Budgeting
By Wendy Boe
Snow held out this winter for us here in Wisconsin — lending us a little more time to wrap up needed projects around the farm. We still did not get enough done — I don’t believe there will ever be a year where we are complacent in regards to our accomplishments — that’s good and bad. On one side, we are always trying to better ourselves and the situation, on the other hand, we forget how much we have learned and have achieved. There is always so much to do. This year, we thought we were done raising meat birds. Well, at the 11th hour, we signed a contract with a deli that needs 600 or so birds a year. Very exciting, and I welcome the new business, but we didn’t raise enough this year — so, what do you do?? You raise birds during the winter months! Wintering birds come with a whole set of risks: if they do not stay warm, they die. This week, we had a waterer break, and the wet birds couldn’t get dry fast enough and many died. Planning and Budgeting have now become my priority! We have a new farm, and it’s slowly growing so it has been a challenge of knowing how much to produce and when. Poor planning wastes money and time. If expenses are not planned out and have a designated purpose, the money disappears — fast! My farm’s New Year’s Planning Tips:
– Figure out a budget and stick to it:This has to be the largest obstacle for us. We put everything we had into our farm—while still experimenting with the correct feed mixes and infrastructure. We had some devastating losses this year — a raccoon got into a couple of our chicken tractors and devoured, for sport, 200 of our chickens all in one night. We made a bad choice on where to receive our Berkshire pigs from, so we lost 4 of those. The power went out on the farm during a storm, and we lost all the poultry in our brooders. Losses will happen, I know that. We need to budget and plan for them as well and don’t forget fuel, insurance, farmers markets, licensing and fees, marketing costs, emergency and maintenance expenses. Now that our farm has a “baseline” and most of the infrastructure is up, this year should be easier to make a budget — I hope.
– Scaling Up: We pasture raise all of our livestock. We only have 10 acres, so our growth is limited. On a “good” year, that means we have six months of green. We do not want to stress out the land. Cows take an acre each of pasture on our system. 10 hogs will happily graze on one acre of paddock. After the “raccoon incident” as previously mentioned, we decided to let the meat birds run around freely all day and close up the chicken tractors (now surrounded by electric fencing) at night. My plan for the 2016 season is to not accept beef this year, but grow out the two we have and, in their pasture place, raise twenty hogs instead. Hogs take eight months to get to size, versus the 20 months for beef. It costs us $4000 to grow one — I don’t think our market is ready to pay $5 plus a pound live weight for us to recoup that expense — unless we sell them strictly retail, no bulk sales. I know from this year that we need, at the very minimum, 1000 meat birds and 15 hogs — no growth rate factored in. That alone is $2500 of our budget — not including feed. Our hogs eat 8 pounds a day which equates to about $400 a hog for feed for eight months. We still have to feed to two highlanders which costs $2800. Plus, our laying bird costs need to be factored in all year round.
– Reverse the numbers to make sure it is profitable: This is where Excel becomes my best friend. I am not a CPA, nor do I have any magical formula. Excel determines how much per animal we have invested, not including our time and labor. In any other industry, consumers are okay with paying labor costs per hour. We need to make sure we are getting paid a fair wage as well!
Unforeseen occurrences will still happen. You can at least count on that! Having a good plan and budget will help minimize these risks and expenses.
Photo by Fotolia/monticellllo
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