Running a lifestyle block as a business

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12 years 8 months ago #28078 by streety
Dear All, I am in very early talks with an accountant about running my block as a business - besides the obvious benefits of off setting tax. It seems a perfect opportunity to make some money out of a hobby we love. I'm thinking of selling meat from my stock. Mainly lamb and pork. Does anyone do this? Having never done anything like this what do I need to be aware of? I'm thinking by selling it as cut meat - I assume I will get a better return than sending them to the works ( what do people get at the works for a lamb/sheep/pig though?). Again I assume if I have them killed at an abattoir and processed by a butcher - selling frozen meat should get me around some of the regulations - again just thinking out loud? Any advice anyone I can talk to? I live in Kapiti if any one is local? Look forward to hearing from you.

23 Chickens, 11 sheep, 2 pigs and a dog

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12 years 8 months ago #384778 by Seaside
You will still need to be licenced as a food premises to sell the meat (although the requirements aren't as onerous as if you were doing the killing and butchering). You may be able to get an exemption from licensing by having a food safety programme in place, however you will have to be audited annually for that which can be just as expensive. The NZ Food Safety Authority has information about this, and also your local council (who are the ones who administer and enforce food licences). There are a few meat sellers at our local farmers' markets, so it must be do-able.

The price of lambs is decent at the moment (last time we had lambs a few years ago, the price of a prime lamb was only $20!!), but if you are paying for food to fatten your pig, selling it by the animal is an exercise in making a loss. PGG Wrightson publishes recent salesyards prices which gives an idea of what they are going for: www.pggwrightson.co.nz/Services/SaleyardResults .

For example, at our local yards, prime lambs have been selling for an average of $150 each while baconers have been selling for $185 (porkers only $108). It costs us $100 per pig in food alone (pellets and barley) to get our pigs to baconer size.

I suppose you'd need to sit down and carefully work out the figures using what you could charge for different cuts of meat (you'd need to work out much of each product you're likely to get per animal), weighed against your costs. For example, there are a lot of pork bones in a pig, which I suppose you may be able to sell for $5 per kg, and not very much fillet.

Say you grew big pigs that gave you 40kg of product (we got about 30kg each from our two smallish ones recently), and the price you could sell it for averaged out at say $20 per kg - bearing in mind I have no idea of the going rate as we only have homekill pork), that's $800 per pig before costs. You will need to find out how much the killing and butchering will cost you, because it varies quite considerably across the country.

Would someone be giving up a full time job to farm, or would anything be an 'extra'? I think it might be hard to make enough to substitute a full time wage.

Kids, beasts, and chillies in Swannanoa South.
www.farmaway.co.nz

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12 years 8 months ago #384781 by kai
From a lifestyle block, you are unlikely to get rich due to the low volumes you produce. However you are definitely thinking in the right direction by trying to add value by what you produce by selling it retail rather than wholesale.
Like any business you will have to sit down and do your maths as no doubt you have worked out that turnover is not the same as profit. We now bring in more money from this place than we spend, however it did require a significant investment.

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12 years 8 months ago #384792 by Simkin
Hi Streety,

have you got customers lined up?

If not - think again about it all. People who buy from a stall or a small shop want a bargain so your meat has to be fresher, tastier and cheaper than what the butchers offer. Otherwise people won't make the effort to drop in.

If you sell the meat vacuum packed fresh or frozen you need to have it processed by a proper butcher, killed in a licensed abattoir, etc and that adds quite a bit to the cost. You need a chiller/freezer where the meat is on display. There are cuts that sell well and others that don't. So it's a bit of an adventure. Plus, of course, the inspections.

We buy meat off a guy who does what you intend to do. As far as I know he sells 1 cattle beast per year to customers like us (we buy 1/4). The cattle is sent to an abattoir, then to a butcher who rings us
to talk about how we want the meat cut and then we can pick it up at the butchers. His other cattle is sold to wholesalers. If the other 3 parties pay as much as we do he gets about 1200 Dollars for a prime steer - minus tax.

If I remember correctly what Sue wrote about how much she gets for her cattle at the works that's not much.

We've bought of someone else previously who sells the different cuts at different prices and they often sent emails around, offering mince at $5 per kilo - just before it reached its best before date.

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12 years 8 months ago #384812 by Organix
Definitely not for everyone but Organic certification is a way of adding value to your products :)

Harm Less Solutions.co.nz
NZ & AU distributor of Eco Wood Treatment stains and Bambu Dru bamboo fabrics and clothing

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12 years 8 months ago #384819 by Sue
I see you are in the Kapiti area, if you can comply with all the regulations regarding the preparation and selling of meat, then there may be an income to be made, but off a lifestyle block, probably not a huge one!

The main hurdle will be to get your animal carcases killed and inspected at a licensed works, getting your own carcases back, and getting them butchered by a licensed butcher, assuming you are not going to do that yourself. The cost of providing food preparation standard facilities are huge!
I suggest you talk to Shane at Otaki Meats for some tips!

I know there are Farmers Markets in this area already selling meat. You could look at mail order for the choicer packs-I think you will find the top end and Organic meat might sell to the high end market, but then the lower end cuts will only sell if they are cheap!

I think personally that unless you are prepared to do the whole job yourself, breeding, growing and including marketing, advertising, and having a regular and constant supply, then doing a good job of the first part-ie growing the animal, is probably going to return an easier income by sending quality animals to the works. As others have said, returns for lamb and beefhave never been as good as they are now!

Sue
Labrador lover for yonks, breeder of pedigree Murray Grey cattle for almost as long, and passionate poultry person for more years than I care to count.

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12 years 8 months ago #384911 by the old ram
G'day,The following is offered as an observation................Work out what you consume in "total" each year in beef, pork,lamb,eggs and chickens.What does that cost you?

Gear your production to cover your needs first,Estimate what it will cost you to produce it (All costs)...deduct the 2nd number from the first and this is your savings and by not killing yourself into the bargain.But you will need sufficient frozen storage to cope with the results........This sort of approach results in having some time for yourself and you are able to maybe enlarge your fruit/vegetable production,which the excess can be sold easier.................Just some thoughts on the subject....................T.O.R.................

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12 years 8 months ago #384912 by Organix

the old ram;378506 wrote: G'day,The following is offered as an observation................Work out what you consume in "total" each year in beef, pork,lamb,eggs and chickens.What does that cost you?

Gear your production to cover your needs first,Estimate what it will cost you to produce it (All costs)...deduct the 2nd number from the first and this is your savings and by not killing yourself into the bargain.But you will need sufficient frozen storage to cope with the results........This sort of approach results in having some time for yourself and you are able to maybe enlarge your fruit/vegetable production,which the excess can be sold easier.................Just some thoughts on the subject....................T.O.R.................

Good suggestion, and if you can lease grazing (or trade for a freezer beast??) to a neighbour which will further outsource your required skill base while freeing up your time to generate other onfarm income/s all the better [;)]

Harm Less Solutions.co.nz
NZ & AU distributor of Eco Wood Treatment stains and Bambu Dru bamboo fabrics and clothing

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