When we were getting started on the farm, we got a great deal on used incubators — we paid something like ten cents on the dollar. How did we get such a great deal? Because the Emu bubble had just burst.
You see, for a couple of years, there was this huge emu fad. The idea was that emu feathers, eggs, meat, and oil were all in tremendous demand, that any emu with a pulse was valuable breeding stock, and that any idiot could become a millionaire by getting in on the ground floor. Stories of fabulous prices paid for emu eggs in unnamed New York restaurants were used as proof of the huge demand.
So there was a tremendous rush into the emu-raising business. A five-acre ranch could make you rich, working only part-time. Wow!
It was painful to watch the bubble burst. The bubble burst the instant the demand of eager new farmers wasn’t enough to soak up all the emu eggs and spare emus, meaning that, for the first time, you had to try to sell to consumers. And it turned out that consumers had never wanted emu products in the first place. Demand for emu products had always been very limited, and the focus of the industry had been to find more farmers to sucker, rather than to build a genuine demand for the product.
And that’s how we came to buy several GQF Sportsman incubators for ten cents on the dollar. The country was awash in emus and emu equipment that nobody wanted, sold at desperation prices by people who were quitting the business and perhaps losing their farms.
This sort of thing plays out every day, usually on a much smaller scale. The alternative farming business is plagued with fads. At any given moment, there are half a dozen widely publicized fads that are every bit as idiotic as the emu bubble. Want to keep your farm? Don’t go there.
The key think to keep in mind is how much your actual customers are willing to pay. I don’t have any mythical New York restaurant customers, so I have no outlet for insanely overpriced emu eggs. If I were to try to sell fresh, grass-raised emu eggs at the farmer’s market, I’d be lucky to sell one a week! They’d be more in demand as blown eggs for craft projects than for eating. This is not a base on which I could build financial security!
You have to sell to the market you have actual access to. Sure, you can bet the farm that you’ll gain access to a new market with a new product, but the first rule of gambling is, “When you run out of money, you can’t play anymore.” Betting the farm and losing the farm go together. I never bet the farm.
But I’ve gone through this experience on a small scale several times. There was the time when we got 100 Americauna pullets to satisfy our customers’ oft-repeated desire for green eggs. It turned out that what our customers wanted was not “green eggs” so much as “green eggs at the same price as other eggs.” The problem is that the green-egg hens only lay half as many eggs. Not a single customer was willing to pay a price that made green eggs worth our time.
Most fads are like that: lots of talk, but the customer won’t put his money where his mouth is. That’s why there’s so much fraud in the alternative food biz: many customers are too cheap to buy what they claim they want, but misleadingly labeled products are often within their price range.
Right now, with chicken feed at record high prices, the fad is for people to badmouth the most affordable ingredients like corn and soy, and ask for eggs from chickens fed hideously expensive or totally unobtainable substitutes. But they won’t pay the $10 per dozen that it would cost to satisfy their desire. It’s almost all talk. We don’t use organic feed, and our eggs are the most expensive in our area (because they’re the best). Anyone using more expensive feed than ours is likely to give up the business, because their costs are higher but they’re not getting as much for their eggs. Even at the best of times, the profitability of the grass-fed egg business is nothing to write home about, and taking on burdensome extra costs just makes things worse.
You have to be extra-careful in situations where the customer’s fervor exceeds your own. You need to do things that you believe in, not what other people believe in. Sure, your customer has to believe in your products, too, but you’ll never get anywhere trying to satisfy beliefs you don’t share.
When I got started in farming, I was very skeptical of the alternative-food dogma, and rightly so. Back then it was all, “Soy is our god, bow down the magic bean.” Vegetarianism was big, and soy worship was the cornerstone of vegetarianism. But I like meat and dislike tofu, and, besides, the food faddists get on my nerves, so I ended up in the meat and egg biz. When the tide turned and the mantra became, “Soy is the devil, we must exorcise the demon bean!” I wasn’t too surprised. Irritated, yes. Surprised, no.
So my advice is to be careful with, “The customer is always right.” They don’t have skin in the game and can pick up or drop a fad in an instant. Talking the talk costs them nothing. It’s different when you’re trying to produce something they’ll like. Production is expensive and time-consuming. Let’s all be careful out there.