How the Economic Downturn has made us Better
Our fall 2008 mature pheasant season was going so very well – we had orders for all the birds we had raised, and shipment after shipment of birds were leaving the farm. All during the 2008 fall season of course we heard in the media about the economy was failing – but somehow we misled ourselves to think that we in the gamebird industry were somehow immune. It was the first week of December 2008 when we got our first inkling that something was amiss. Within weeks, we had cancellations for over 20,000 pheasants (this grew to total 30,000 in the coming months). The “spot” or wholesale market price for adult pheasants literally collapsed – going to $6.00 then $5.00 and eventually even less than that. I know of one producer who just released his unsold birds into the wild. The economic cost to us was dramatic.
The hangover from the collapsed 2008/09 adult pheasant market was that chick orders for May/June of 2009 were then depressed – and no wonder. At the time no one knew how far the economy might fall, and we certainly didn’t know how many birds to produce. Certainly the primary emotion was fear.
To be successful in any business enterprise requires one to be able to adjust to changing market conditions. In our case, we knew that we would be selling 20 percent less birds in 2009 than 2008 – and that adjustments had to be made. In early 2009 at one of our weekly manager meetings, I asked that the managers bring to the next meeting ideas of where we could cut expenses. That next week we reviewed the list, and without going into the details – we’ll just say that significant changes were made. No longer does an outside cleaning firm clean our offices once a week. And we don’t provide uniforms to our employees. We looked at every expense. We cut costs everywhere we could.
We maintain accurate records of the labor hours used in each of our divisions. I challenged our staff to see if we could reduce labor hours by 5 percent from 2008 to 2009. We did better than that, i.e. our labor efficiency increased from 2008 to 2009 significantly.
Another change is that in 2009 we made no capital expenditures – zero. Since we have been maintaining and replacing equipment over the years – we were able to get by for one year.
The end result of all this is that we were able to make a profit in 2009 even though our gross income for the year declined. As the 2009/10 mature bird season has now reached its end, we can see that demand for adult pheasants has rebounded. So far in the 2010 day old pheasant chick market – it appears like there is good demand. The lessons we learned through our 2009 belt tightening will result in us continuing to run a leaner, more efficient organization.
MacFarlane Pheasants, Inc.