The River Hills Purebred Poultry Marketing Alliance Research Project

Final Report for FNC07-687

Project Type: Farmer/Rancher
Funds awarded in 2007: $5,987.00
Projected End Date: 12/31/2012
Region: North Central
State: Missouri
Project Coordinator:
Michelle Wagstaff
Dry Dock Farm
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Project Information

Summary:

PROJECT BACKGROUND
Back to the Farm is a 36-acre pasture farm dedicated to sustainable farming practices and responsible animal husbandry. We raise heritage chickens, manage beehives, grow vegetables, and graze cattle. Currently our profits are low, but our farm also provides us with a residence and a place to appreciate nature. In addition, we are also able to harvest produce, eggs, and meat from the farm which in turn helps to lower our income requirements. One challenging part of our farm enterprise is acquiring capital to expand our operation without borrowing money. This SARE grant helps us continue in that direction.

When we purchased our farm back in January of 2005, we had already decided that we would farm sustainably. Sustainability, good animal husbandry, and economic viability are all core values that factor into every decision we make regarding our operation. It was very important that we began with these core values in place. Challenging situations arise from time to time. Sometimes it is tempting to take the easy way out and rely on a harsh chemical or an expensive soil amendment to deal with a particular problem.

Our style of management and decision making is quite different from what is normally encountered in most rural areas. We often receive advice that doesn’t coincide with our principles, and we have to make sure we stay on our path without disrespecting those who operate differently. For example, we have noticed that pasture weeds have increased steadily on our farm since we took ownership of it. A neighbor pointed this out and suggested we spray to get rid of them. While I realize that the weeds are a problem, I don’t believe spraying is the best way to get rid of them. It would be easy to spray, but the weeds are symptoms of a problem. Spraying doesn’t address the real problem. For the first few years, we contracted with a local farmer to hay the pasture. They were usually very busy and the hay would often be cut late in summer when it was hot and dry. The pasture is mostly cool season grasses and took longer to recover. Because of this, weeds often got the upper hand. In addition, late haying meant weeds grew to maturity and had more time to reseed themselves.

I believe the solution lies in better management. In April of 2011, we re-introduced cattle to the pasture instead of haying. With good management and some rotational grazing, we should begin to notice less weed pressure and a better stand of grass.

We have also noticed increased weed pressure in the chicken pasture. It seems to occur when pasture pens are left in one place too long during certain times of the year. As a result, goose grass establishes itself quickly. I haven’t quite figured out how to suppress it and encourage the regular pasture grasses and clovers to return where the goose grass takes hold.

The right information and tools are out there.

PROJECT DESCRIPTION AND RESULTS

GOALS
Our plan was to work through an alliance of small-scale producers of a number of heritage breeds to form a plan of work to guide sales beyond local markets. To those ends we propose: 1) the creation of a web presence, 2) a trial of a publication that is both a catalog and a basic manual for the breeds being produced, 3) a number of outreach projects from which to draw input, 4) define market demand potential as we build a data base and how to best address it, 5) explore shipping methods for cost effectiveness for both seed stock (chicks and started birds) and hatching eggs, 6) explore how best to market a table egg as a distinct product of our region.

PROCESS
As producers, we already had breeding stock in place. Together we drew plans to consolidate our efforts in an effort to take things to the next level. With the first round of grant funding, we set out to purchase some equipment and supplies such as shipping boxes, egg cartons, egg-washing and grading equipment. We also began an outreach program both to raise awareness about the importance of heritage breeds and to gain valuable information concerning which breeds producers were interested in.

At first, sales involved table eggs delivered through an Extension program to families in the St. Louis area. Through a lot of hard work, a market for table eggs was established in the St. Louis area beyond the initial Extension program. This was due to a continuous effort by Mark and Michelle Wagstaff. As they began putting together a CSA, table eggs supplied by them and by other local producers became an important part of their program that continues to this day.

A second phase of the grant involved establishing a small-scale hatchery to ship baby chicks through the mail. As the planning progressed, the second round of grant funds were used to cover some outreach expenses, develop a website for baby chick sales, and purchase brooding and hatchery equipment.

During the 2011 season, we shipped Delaware chicks to eight different states with 100 percent live delivery! We were personally involved in every order and contacted each customer after the sale to confirm live delivery and to make sure they were satisfied with their purchase. The feedback I received from our customers was very positive. Most said that they had been dissatisfied with the typical hatchery stock they were used to ordering. They also commented on how vigorous our chicks were and how much they appreciated our follow-up.

While this initial success was rewarding, we could have a challenging year ahead of us. Advance orders for chicks are down for the 2012 season. Almost all of last year’s orders were for the Delaware breed and most of those customers are not reordering from us this year. More orders are starting to come in from new customers and we are already exploring advertising options in an effort to increase sales. After crunching some numbers, I have realized that in order to make a small hatchery like ours sustainable, we need to generate enough sales to continue shipping chicks well into May and possibly into June. This has proved difficult in the past, with only a few people showing interest toward the end of May. We will see how things progress this season.

Website information for Paul and Kelly Harter can be found at www.backtothefarmMO.com. Website information for Michelle Wagstaff and Dry Dock Farm can be found at www.riverhillspoultry.com.

PEOPLE
Farmers who assisted with the project outside those of us participating in the grant were a mix of small producers, some of which are Amish. This is worth mentioning, as my experience with Amish farmers is that they are often able to operate with low overhead costs and typically draw from a large source of family labor. Their involvement was supplying eggs to the project.

Matt John of Shady Lane Poultry provided technical support during the initial phase of the grant and proved to be a practical source for poultry supplies. He operates in a different state, but attends several local poultry-themed events, which saved us shipping costs when buying equipment.

RESULTS
The results achieved through this grant were mixed. There is definitely a solid market for locally-produced table eggs from small producers. To obtain a premium price for these eggs, a customer base in St. Louis was secured by Mark and Michelle Wagstaff made up of customers seeking high-quality eggs that were produced locally. It operates successfully to this day, with sales between 400 and 500 dozen eggs per week.

Part of the initial grant was to explore the viability of a local egg market from heritage breeds. The reality is that most of the table eggs come from hybrid layers and not heritage stock. That is what most producers choose based on the feed-efficiency and high production typically found in hybrid layers. This differs greatly from the breed survey results we conducted during the first year of the grant, as our initial results showed a preference for heritage stock. It is difficult to justify using dual-purpose heritage stock to compete with hybrid layers when pencil is put to paper. I don’t think that this in necessarily a bad trend, as long as enough genetic diversity is being maintained among other producers and poultry enthusiasts to keep pure-bred parent lines viable.

At Back to the Farm, we were able to help offset this gap by hatching and selling baby chicks for part of the year. It is a lot more labor intensive, but the profits are higher when a single baby chick sells for as much as one dozen eggs. While this does help, the amount of labor required to keep several small flocks functioning is much higher than managing one large layer flock. This year after dividing our net profits by our estimated labor hours, the hourly rate for our efforts falls below $1 per hour. Unless we can reach a higher level of hourly income combined with a substantial increase in volume, our small hatchery/table egg operation doesn’t look to be sustainable. At Back to the Farm, we are reevaluating our poultry operation based on this information. One option is to combine the separate groups into one layer flock and focus on egg production, but I continue to struggle with the fact that while focusing on maintaining genetic diversity through heritage breed promotion, I buy feed that I’m sure is genetically modified, which does not favor genetic diversity. Ultimately production of non-GMO feed will depend on increased consumer demand for it.

DISCUSSION
I learned quite a lot from participating in this grant. I learned that operating a small hatchery is a very challenging endeavor that I would not be able to sustain without a viable outlet for table eggs to offset costs during the remainder of the year, as operating a hatchery is a seasonal business. I did find interest from a few customers for baby chicks in late summer/early fall. There is obviously a market for this if enough orders come in.

I also found that many poultry enthusiasts tend to focus on appearance over performance. Many of the questions I get from my customers regarding our stock seem to revolve around traits that score in the show ring instead of the chicken yard. At the other end of the spectrum, I frequently encounter those that don’t care how a bird is built as long as it’s red or barred, and cheap! Every now and again I have customers interested in qualities like hardiness, thriftiness, and practicality and willing to pay a fair price for them. We need more of these folks.

I found a lot of interest in hatching egg sales, mostly to be shipped through the mail. I have yet to sell hatching eggs to anyone, mostly because I don’t believe it is cost-effective for the buyer or the seller. Because of the decreased hatch rate typically seen with hatching eggs that are shipped, the buyer ends up paying a much higher price per chick and ending up with fewer birds in the process. For the seller, the opportunity for a value-added sale is lost. As long as the postal service agrees to allow day-old chicks to be shipped, that is how I prefer to do business.

The challenges I discussed in the results section of this report have led us to reevaluate our operation. A considerable part of 2012 will be spent trying to overcome those challenges. The goals for developing a dependable local table egg market were definitely met. This was a good experiment on how some of the more unsustainable facets of our food system can be improved, the idea being that a collective effort by both producers and consumers to have access to better, healthier food is imperative in bringing about the changes that will move us in a better direction.
Participating in this grant has been a positive experience for us. The rewards from being a part of this grant go beyond being able to make money from the farm. Being a part of a local food movement and promoting heritage poultry and sustainability are things we feel very strongly about. If asked what I would recommend to other farmers, it would be to adopt holistic management techniques as a tool for decision making in all stages of an enterprise.

OUTREACH
Most of the information I relay to others about this project is by word-of-mouth. I did speak to a small audience of approximately 30 people about our grant in the 2012 NCR-SARE Farmers’ Forum at the National Small Farm Trade Show & Conference in Columbia, Missouri. Our breed survey was handed out at several poultry themed events during the first two years of grant participation. While the feedback was helpful, I believe that a wider demographic needs to be targeted, and that endeavor will take a lot more time and energy.

I’m not sure at this point how I would be able to further communicate the results of this grant in the future. As with most things, the answers will usually reveal themselves to me in time.

Videos of four presentations at the 2012 NCR-SARE Farmers Forum can be viewed online through NCR-SARE’s YouTube channel. Use the following URLs to view the desired video:
Selling What you Grow Selling What you Know
https://youtu.be/OCVz6sSNYcM
New Age Swine Production
https://youtu.be/Pa5j9Tzpzbw
Friday Poultry Presentation
https://youtu.be/LwFofYxLJlo
Small Laying Flock Breeding and Managing
https://youtu.be/13CsmjAcz5s

Research

Participation Summary
Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.