Make Money with a Successful Egg Operation
A profitable egg business requires more than raising healthy chickens. Use these tips to get your egg business up and running.
By Wendy Bedwell-Wilson
Perhaps the only thing better than cracking, cooking and savoring your own farm-fresh eggs is sharing a dozen or two with family and friends—and the occasional cash-paying customer. More of these consumers exist today, and small-flock growers are reaping the rewards, thanks to growing awareness of the health benefits of pasture-raised eggs.
Bud Brown, an 81-year-old chicken farmer in Roseburg, Ore., regularly fills his pockets with enough “egg money” to pay for feed, supplements and miscellaneous expenses. He sells his free-range eggs at his U-pick farm, at local farmers' markets and through community-supported agriculture programs. His real customer base, however, formed from word-of-mouth advertising.
“Everybody wants my eggs,” says Brown, decked out in his utilitarian farm garb—a thread-bare T-shirt, perfectly worn denim overalls, a green-and-black frayed-cotton flannel and holey muck boots covered in years of chicken-rearing experience. “Twenty-something years ago, I started out with a dozen layers for my family. As soon as my wife started telling her friends about my eggs, we were in business.”
Brown now keeps between 200 and 250 Black Star chickens, a cross between Plymouth Rock chicken breed and Rhode Island Red chicken breed, to feed his customers' supply, along with a few dozen blue-egg-laying Araucana chickens for clients who prefer colored eggs.
“The operation is just enough for my sons and me to handle,” he says.
Pairing the desire to provide nutritious homegrown eggs for loved ones and neighbors with the practical matter of finding a way to pay for chicken feed and expenses makes sense. Depending on where you live, a dozen pasture-raised brown eggs can sell for an average of $2.50; a 50-pound bag of organic chicken feed costs upwards of about $30. A flock of six chickens will gobble down the bag in about a month; that's about 1½ pounds of food per chicken per week. In this instance, a hobby farmer would simply need to sell 12 dozen eggs to pay for his or her feed, along with a few extra dozen to cover additional costs, like egg cartons, bedding, water, power, supplements and supplies, which add relatively little to the overall monthly bill.
The good news is that the market for homegrown eggs exists. According to the USDA, an individual consumes an average of 259 eggs per year. More and more egg eaters prefer the all-natural or organic varieties, too.
While your hens continue to churn out two eggs every three days, how can you profit from their natural ability to transform crumble (feed pellets broken up into smaller pieces), greens, bugs and water into healthful sustenance for humans (and other four-legged critters)? Know your market, create a quality product and distribute it successfully to ensure your flock and your stock continue producing “egg money” to pay their own way—and then some.
Know Your Market, Know the Laws
Hands (or feathers!) down, the most important aspect to consider about the egg business is your market. Do you have buyers lined up before the chicks have feathered out? Do you live in a rural area where fresh eggs are a dime a dozen? Can you sell your wares at a local farmers' market or through a CSA program? Maybe, like Brown's wife, your spouse or partner can talk up sales and establish an egg-buying network amongst friends and neighbors. Or perhaps, as Bryan Thomas of Rogers, Ark., discovered, your efforts can take on a life of their own.
“When we moved [to Arkansas] from Arizona, we bought a half-dozen chicks and set up a small coop out by the garden with no intention of selling any eggs,” says Thomas, who invested in a 20-acre ranch after retiring from a career as a plumber. “Before long, my parents wanted a dozen every week, my sister wanted a dozen, their friends wanted some—and our girls couldn't keep up with demand. So the following spring, we bought another two-dozen chicks, remodeled and expanded the coop, gave the birds an acre to themselves and have been in the egg business ever since.”
As with any successful business venture, you should create some sort of plan that identifies your target market and potential growth areas. It doesn't need to be that of a billion-dollar corporation, but it should provide some sort of framework for growth, Thomas says.
“Does it mean we can retire on egg money? Not quite,” Thomas adds. “But after people were willing to pay for our eggs, we started to calculate our costs and income and to look at areas where we could sell more eggs to boost our profits. It was a great foundation for what we have now.”
In addition to having a rough business plan in place, you must also be aware of—if not well versed in—the laws regarding egg selling in your municipality, your county, your state and the country. Call your county extension agent or state poultry or agriculture specialist about local and federal laws regarding claims you wish to make about your eggs, conditions you must meet to make those claims and necessary sales permits you may need.
“In some areas, it's against the law to reuse other companies' egg cartons,” Brown says. “And most everywhere, you have to go through some big hoops and pay a lot of money to use the ‘organic' label.”
As for pricing your eggs? You may think your farm-fresh delights are worth $10 a dozen, but your customers will not be willing to pay quite that much. According to the USDA, as of April 19, 2010, the average price for a dozen extra-large certified organic eggs in cartons runs between $2.55 and $3.16. You probably can lean toward the higher end for your nutrient-dense eggs, depending on where you live and what the market dictates.
“In our area, we can charge $3 a dozen or $4 for an 18-pack,” Thomas says, who sells direct to customers rather than through a second party. “But that's with free delivery.”
When deciding what to charge for your eggs, consider all of your expenses, including production, marketing and promotion, packaging and delivery costs for the entire year. Feed will likely be your greatest expense, but also budget in one-time or unexpected costs like coop remodels or fencing. Add all of those expenses together. Next, estimate how many eggs each hen will produce: A good average is 180 eggs per year. Multiply 180 by the number of hens you have to get your total number of eggs. Then divide that number by 12 to get your estimated total number of dozens for the year. Finally, take your total expenses and divide that by your number of estimated dozens to get the minimum price you should charge to break even.
If that number is too high, you may want to cut some costs.
“We didn't make a profit on our eggs for some time,” Thomas recalls. “But after we had all the major expenses behind us, like the coop remodel and additional fencing, the money that came in started adding up quick.”
Growing an Egg-cellent Product
Even with a well-researched marketing plan, mastery of the laws and regulations and perfectly priced dozens, you can't expect to see your egg business take flight without producing a top-quality product. It all starts with choosing expert layer chickens.
With more than 100 chicken breeds described by the American Poultry Association, not to mention those listed by the American Bantam Association and the hundreds of other chicken breeds available in North America, choosing egg-laying hens can be daunting. Sometimes, raising whatever breed is available is a smart way to start.
Suzie Gaston, a hobby farmer who lives just outside Memphis, Tenn., knew she wanted to raise some egg layers; so she went to her local farmers' co-op and picked up a few chicks, which turned out to be docile and highly productive Plymouth Rocks. Gaston says her success with the chickens led to her new money-making hobby.
“My introduction into the chicken business was pretty painless,” says Gaston, who has since graduated to heirloom breeds, including Orpington chickens and Golden Laced Wyandotte chickens, along with Ancona chickens, Jersey Giant chickens and, of course, Plymouth Rock chickens. “But once you get into it—really get into the hobby—you can go into so many different directions. For layers, though, if you want quantity, go with a Leghorn; if you want pretty eggs, go with an Ameraucana; if you want some dual-purpose laying and meat birds, try the Rhode Island Reds or Barred Plymouth Rocks.”
The APA says that the best layers produce between 250 and 280 eggs per year, though individual chickens may exceed 300. As Gaston mentioned, Leghorns, like other Mediterranean chickens, are among the top producers of white eggs, producing 250 per year on average. A popular brown-egg strain, the APA suggests, is the Hubbard Golden Comet, which is a Red Sex-Link hybrid that lays between 180 and 240 eggs per year.
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Gaston says that she does take into account the number of eggs each hen lays but that the end product is most important for her, when considering her income versus the cost ratio.
“In order to give my customers the best possible eggs, I feed the chickens organic feed and give them access to as much greens and grubs that they can eat,” she says. “The chickens are healthier, and the eggs taste better.”
To produce quality eggs, your hens will need a varied diet of commercial chicken feed, high-calcium oyster shells, grit, greens, bugs and the occasional dairy product, such as milk, which will help strengthen the eggs' shells. These ingredients help to produce nutrient-dense eggs with strong shells, dark yolks and great taste.
Brown also feeds his chickens his garden leftovers, like the bushels of leftover zucchini he has every year.
“I cut feed costs by giving them my garden scraps and letting them free-feed on bugs and greens in the pasture,” he says. “They sure get sick of that zucchini by the end of the summer, though.”
To be productive, your hens will also need a cozy place to call home. Outfit their coop with the necessary nest box filled with egg-catching nesting material, a roost for snoozing, plenty of fresh water, a moderate temperature of between 45 and 80 degrees F, and the right amount of light to trigger egg production.
According to the APA, chickens require at least 14 hours of sunlight to lay—and, when the hours of daylight fall below that magic number in the winter months, your inventory may reduce to near-zero until the spring. A full-spectrum bulb can help keep production numbers strong year-round.
“Up here in Oregon, we don't get much more than 10 hours of daylight during the winter,” Brown says. “So I hooked up a red heat lamp to keep the hens warm and expose them to more hours of light. It's worked, so far.” (Moderator's note: Actually a more efficient compact florescent bulb or bulbs will work better at less cost; also adding light in the morning as opposed to evening will also prevent floor hens from missing "roost time". Herman Beck-Chenoweth)( Exact information on this subject is available in my book Free-Range Poultry Production & Marketing
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With the right diet, right environment and right light, you'll be well on your way to raising happy, healthy chickens that produce tasty, healthy eggs. Then it's only a matter of getting the goods to your customers.
Delivering the Eggs
The price of fresh eggs varies from community to community. Be sure your sales rates are in line with your area. Photo
The price of fresh eggs varies from community to community. Be sure your sales rates are in line with your area.
Your egg-business plan is in place, and your hens are busy doing what they do best; so the next thing to consider is packaging, promotion and distribution. Will you set up an honor stand with recycled cartons filled with brown eggs, offer eggs at your local farmer's market or sell your wares through your local natural-food store? Do you plan to advertise or promote your eggs to the public? If you decide to offer delivery services, how far will your radius extend? You'll need to weigh the benefits and costs of all these factors—and many more—when you go into the business of egg production.
“I'm not a salesman or a marketing guru,” Brown admits. “But you have to think about how you're going to get those eggs to your customers—the regulars and the new ones.”
First and foremost, to get top dollar for your eggs, you'll want to ensure the product is clean and safe. Proper chicken husbandry, which includes keeping the nest boxes fresh and clean, results in eggs that require little washing, Gaston says.
“The eggs come out clean,” she says, adding that washing the eggs could remove their natural bloom, which seals in moisture and seals out harmful bacteria. “So if you gather them regularly throughout the day, you won't have to wash them. That cuts down on your production and packaging time; the eggs last longer, too.”
Next, consider your packaging. As Brown mentioned, some areas may have laws regarding the use of reused cartons, or you may wish to stamp your name and phone number on the package so customers know who to call when they run out of eggs. Farm-supply stores and online outlets sell unmarked cartons at reasonable prices.
For Brown, plain cartons with his contact information scribed on the lid promote repeat business. “And my customers give me the old cartons, which I can reuse again,” he says. Distributing your eggs will depend on your market. Some options include:
setting a “farm-fresh eggs” sign in front of your farm
putting an honor stand at the end of your driveway stocked with eggs every morning
building a set client list and delivering eggs to them regularly
working at a stand at your local farmers' market
participating in CSA programs
selling through locally owned grocery stores or markets
Gaston advises budding egg entrepreneurs to remain flexible and bend with the waxing and waning market conditions. In lean times, you may need to consider doing a sales push and advertising in your local penny-saver newspaper or try putting up a sign in your yard. When business is booming, you may need to stop accepting new customers for the time or consider raising your prices.
“It's a game,” Gaston says. “A fun game, but you have to be savvy, do your research and provide the best product you possibly can. Then customers will come running to you.”
About the Author: Wendy Bedwell-Wilson shares her 80-acre hobby farm in southwest Oregon with her husband and a range of barnyard critters, including three Rhode Island Reds, three Plymouth Rocks and one rooster named Lil' Jerry. She has been writing about life with animals for nearly 10 years.
This article originally appeared in the Summer Hobby Farms
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