Skip to main content

Another Way of Looking at This!

If you've read my blog for the last year or so, you know that I've been struggling with questions of scale and economic viability.  Even with a part-time job, I'm finding that the income from my current operation isn't adequate to meeting my family's reasonably modest financial needs.  Last February, I looked at scale from a different direction (see  In this analysis, I determined that I needed to run approximately 500 ewes to be able to pay myself an annual salary of $35,000, pay for my family's health insurance, and put some money aside for retirement.

Recently, as I was analyzing the prices I charge for our grass-fed lamb and mutton, I realized that there is another way of looking at these numbers!  If my goal is to pay myself the average Placer County wage ($35,000/year) and maintain our sheep operation at it's current scale (150 +/- ewes), why don't I simply raise my prices?!  Our current average retail price for lamb is approximately $11 per pound.  Some cuts, like rack of lamb and loin chops, are more expensive.  Other cuts, like shoulder roasts and leg of lamb, are less per pound.

Here's what I found: Instead of tripling the scale of our operation, I can simply triple our retail prices!  This would mean that we'd charge $58 per pound for rack of lamb and $30 per pound for a butterflied leg of lamb!  I didn't realize that making a living wage was a simple as tripling our prices!

In all seriousness, any business is far more complex than these numbers - and farm businesses are more complex than most.  Obviously, tripling my prices won't result in more income - I wouldn't pay that much for lamb, and I know my customers wouldn't either!  This analysis does suggest, however, that achieving the right balance between scale, pricing, and business management is critical to the success of a farm - or any business, for that matter.


Popular posts from this blog

Trade Offs

As we were building fence for the soon-to-be-lambing ewes this morning, someone drove by and asked my partner Roger how long it took to set up the electro-net fencing we use for the sheep. Roger replied, "It's not too bad," to which the driver said, "Seems like a lot of work." Roger's answer - which both of us use with some frequency, was, "Yeah - but this way we don't have to feed any hay!" The driver, who obviously wasn't a rancher, didn't understand - and I suspect even some of my rancher friends don't understand the trade off we're making. Building electric fence is a lot of work - wouldn't it be easier just to feed hay?

The paddock that Roger and I built this morning encloses about 5.75 acres of high quality forage. Since the ewes are on the verge of lambing, their forage demand is peaking. They're eating nearly twice as much grass now as they need in the late summer - after all, many of them eating for three (and p…

No Easy Answers Part 2

In mid October, some friends who graze their cattle in the mountains of western Lassen County (less than 200 miles from our home), became the first ranchers to have cattle “officially” killed by wolves in California in nearly a century. Wildlife officials confirmed that the Lassen pack killed a 600-pound heifer; four more heifers died (and were partially eaten by wolves), but the California Department of Fish and Wildlife (CDFW) couldn’t confirm the cause of death. While I learned about the depredations shortly after they happened through the rancher grapevine, news of my friends’ losses weren’t made public until the California Cattlemen’s Association and California Farm Bureau Federation issued a joint press release this week. The October 28 edition of the Sacramento Bee ran the story.
If you’ve read my previous blogs about wolves, you’ll probably know that I’ve frequently been frustrated with the Bee’s coverage. The paper has run guest opinions disguised as news articles, and appar…

Humbled and Excited

More than 20 years ago, I went to work for the California Cattlemen's Association (CCA). After two internships, I'd been hired by my friend and mentor John Braly as the membership director in 1992. By 1996, I'd been promoted to assistant vice president - pretty heady stuff for a young guy who hadn't grown up in the industry. I started looking for new challenges. Dr. Jim Oltjen, who was (and is) the beef extension specialist at UC Davis (my undergraduate alma mater) suggested that I think about going to graduate school to prepare for a career in extension. I considered it, but the timing wasn't right.

Fast forward to 2013 (or so) - I'd been working as a part-time community education specialist in our local University of California Cooperative Extension (UCCE) office for several years. The farm advisors in the office - Roger Ingram and Cindy Fake - suggested that I consider getting a master's degree and applying for a future farm advisor job. This time the id…