WHAT'S THE LATEST?
Updated Feb. 28, 2023
This project is just about wrapped up, for now! Katie will spend some time over the next few weeks playing around with the P&L spreadsheet and talking over the financial conclusions with her business partner and husband, Colin. Ultimately, they have a big decision to make - stay in poultry production, get out altogether, or find some in between that makes more sense - maybe it’s focusing on production and selling to another farm who will handle processing, marketing and sales.
Poultry is only one of many products The Dogs Run Farm (DRF) produces and we hope to dedicate future Skywoman resources to uplifting their other lines of operation. Being that the largest chunk of revenues come from pork, we would analyze this line of business next.
The Dogs Run Farm is owned and operated by first generation farmers, Katie and Colin McInnes, and located outside Clearwater, Manitoba, on Treaty One Territory, the lands of the Anishinaabeg, Cree, Oji-Cree, Dakota, and Dene peoples, and on the homeland of the Métis Nation. Their diversified operation launched in 2013 and today they are producing pasture finished lamb, pasture raised pork, chickens, turkeys, eggs and handmade organic soap. The farm encompasses just under 12 acres with an additional 37 acres of rented pasture, altogether managing about 50 acres.
Identify pain points that are straining The Dogs Run Farm’s bottom line as well as identify new opportunities and collaborations that will bring owners Katie and Colin, and their wider community of farmers, processors and markets, closer to their goals.
Initial deep dive on poultry production. The main tactical pain points are:
High costs associated with poultry transportation and accessing big markets in Winnipeg
Bottleneck in accessibility to inspected facilities that also weigh the birds
Regulatory limitations with Canadian bird quotas
Sporadic lack of distribution channels for eggs throughout the year
Balancing childcare and farm management
To get a true look at how each line of production is affecting Katie and her family both financially and emotionally, we asked her to rank the products from greatest to least in both revenue and stress level. Here’s what she shared:
If Katie could list chickens three times for being the most stressful above anything else on the farm, she would… and although they’re seemingly in second place for highest revenue, profitability (if any) is uncertain considering the intense mileage and transportation costs to process the birds.
Nov. 14, 2022
As is the case with most intro calls, this was a game of 20-questions to elicit the ins and outs of the business. We asked some really direct questions about why she is farming, what’s working in the business, what is not working, and why. The team identified a huge pain point in DRF’s poultry production due to (i) the tight poultry quotas in Canada and (II) an extremely complex supply chain for processing. At the surface, it seemed like poultry could be bleeding the farm dry, financially and emotionally, so we wanted to dig deeper into this specific production model.
Jan. 10, 2023
Poultry Deep Dive
The goal of this meeting was to leave no stone unturned in figuring out all of the costs associated with DRF’s poultry operation - especially any costs that may be hidden as uncompensated labor on the part of the owners. We needed to know all labor performed and how much of it, all equipment used, space/land/buildings used, vehicles, insurance, backoffice, etc. attributable to production, processing/packing, and marketing of chickens.
We learned that Katie would be comfortable hearing (a) chickens are terrible for profitability and they should get out of poultry all together, or that (b) DRF needs to buck up and improve poultry production because it makes sense for cash flows and customer retention. Before advising on either we needed to crunch the numbers first, so Chris Newman spent the next few weeks working with Katie to plug all of her data into OOLA - a free financial tool for anyone looking to start, overhaul, fine-tune, or evaluate alternatives to a regenerative pastured-egg operation.
Feb. 07, 2023
Poultry Profits & Losses
This final meeting was hosted to talk through the P&L numbers and discuss the options and actions that DRF should take with poultry production to improve their overall business.
We learned that The Dogs Run Farm is doing their best to reduce costs and there is not much wiggle room to further decrease expenses at such a small production size of 600 birds. Production would become more attractive at 5-6000 birds but the Canadian quota of 1000 birds makes this nearly impossible.
At this point, it’s not so much of digging into how to make poultry more profitable for DRF, but more so determining how much of the other lines of production on the farm depend on the complimentary offering of poultry. Should poultry production be eliminated altogether and if so, will the other lines of business suffer as a result? At a quick glance, it seems like the sale of other DRF products are not dependent upon offering chickens for sale as well. Chris recommended killing poultry altogether because it is taking up a lot of oxygen in the room that DRF can better use elsewhere.