Wednesday, August 7, 2013
The Cost of Real Milk Part Two
So in my last post I showed you the dreary financial picture of producing raw milk, but that was then and this is now.
And "Now" is 7 months onto 2013 and things look a little better. Why is that? Well in November of 2012 we increased our raw milk price by $1 per gallon. The we did something really risky. We started Selling MORE of it direct to the consumer.
In 2012 the financials were less Rosy even though we produced over 19, 500 gallons of milk, we only SOLD 21% of it. The rest went to our hogs, ourselves (a whole nother breed of hog) and a little to my milk soaps.
Most of it went to the hogs. So not wasted, and certainly helpful in the feed line item of the hog budget but not so good for the dairy budget.
But customers kept calling us. And when IDPH made the news regarding their desire to make raw milk less accessible in Illinois, guess what? Folks wanted it even more. And our raw milk sales climbed.
To date, these first 7 months of 2013 we have sold nearly $14,000 in raw milk. If the trend continues we expect to sell over $30,000 worth. Better yet our expenses will go down in one of the highest expense areas a dairy farmer can have...feed.
When we decreased our milk herd, we opened up some land to grow our own hay which has now been cut , baled and stored. Soon there will be a second cutting which means overall expenses in 2013 will drop approximately $5000 even with the money we had to spend to pay someone to do the cutting and baling.
You might ask. "Why didn't you do this sooner?" Well, the jury is still out but generally we were in that mindset so many dairy farmers have in that MORE is better. More cows means more milk etc...but in our case we had too much "MORE" and not enough of our own land to grow feed. When out of sheer exhaustion we made the decision to downsize, we noticed that less cows took up less pasture.
Yup, we be rocket scientists fer sure.
The other mitigating factor was the gentleman who is still very seriously interested in our farm. Because his bank wanted some detailed financials in the form of a business plan we had to stop what we were doing long enough to really evaluate what we wanted to do.
So, to date, we are ripping apart the income and expenses of all our farm revenue centers and discovering some amazing things. In the meantime very little else gets down. Meals have halted. We've been living on raw milk and Keith's homemade granola, housework has taken leap backward to the 18th century (my floors are once again packed in dirt) and my soap making came to a real screeching stop (there is virtually not one bar in the farm store at this moment).
But a farmer has to do what a farmer has to do. And for us it meant getting down and dirty with the numbers, staying up later and later with a hard, cold, lover named Quicken who takes and takes but gives so little back.
At least we now have very good handle on what it is costing us to produce milk. Last year it was costing us specifically $6.04 for each gallon we were selling for $5 each. Pause for slap up side of the head. But now in 2013, (if the trend towards increased raw milk sales continues) the costs to produce the gallon of milk we are selling for $6 is should cost us closer to $3.
Maybe with that extra $3 we can afford a part time accountant who can be Quickens Concubine while I waste some time actually taking DOWN the Christmas decorations I still have hanging in my bathroom window.
A girl can dream can't she?