2024 was a better year than 2023, but still not a great year and I’ll try to explain why I think that was in the following paragraphs. If you haven’t read one of these year end posts before, it’s worth going back to earlier years for more complete explanations of how I get the dollars per hour number, but the basic formula is that I take the gross revenue from the farm, subtract non-labor expenses and then divide that by the total number of hours worked on the farm. Ultimately this is the single number that best reflects how successful we are, at least in terms of economic sustainability, and it’s the easiest one to compare from year to year.
2022 was the highest number we’ve had and then 2023 we hit an all time low and for 2024 the number was back up a little to $15.47/hour. Minimum wage in 2024 for Portland was $15.95/hr, so once again as the owner I made less money, per hour, than anyone else working on the farm. I’d be ok with that if we were all making more, but making less than minimum wage isn’t great. You can see the numbers and trends from 2017 through 2024 in the graph below. The red line is minimum wage which has been rising steadily and the blue line is the net dollars per hour generated.
I talk about why numbers were so low in 2023 in last year’s post. Even though it’s starting to come back up I think there are three big factors in why it’s still low: the farm is shrinking, we took the spring season off from harvest, and I had a fairly serious accident in the spring that set us back a bit.
You can see in the graph above that the full time equivalents (FTEs) are still higher, per acre, than they have been historically. Last year this was particularly bad because I screwed up the labor plan, but it’s still high this past year and there are two reasons I see for this. The farm is reducing the amount of space we grow on to make space for Vicolo Farm which is ultimately a good thing, but is tough on our overall budget. Correspondingly we’ve been able to shrink some of the labor, but we have a relatively high fixed labor cost for things like planning and distribution that don’t really shrink as quickly as the production space. This means we have to be more efficient in everything we do. If anything I think I’ve been a little less efficient in the way I’ve been managing my own labor, as well as the crew’s so that’s something to work on for next year.
Our gross and net per space are going up after really falling off last year. Realistically these two numbers should be going up as a result of our prices going up at least at the rate of inflation (which is similar to the rate minimum wage is rising). To improve our wages though we actually need to also be more productive in the space, and there is room for that. There are a lot of factors that influence productivity, one of them being our weed pressure, which is closely tied to being able to get field work done in a timely manner. In 2023 we built up a lot of weed pressure for a variety of reasons, some having to do with the weather, some because of labor management issues and other factors. One of the reasons for not doing a spring harvest season in 2024 year was to try to address the added weed pressure proactively. That started out ok, but then I had an accident in May and that definitely set things back, allowing the weeds to get out of hand again. What is it they say about the best laid plans?
As usual, running the numbers confirms a lot of what it felt like this year: progress, but also a continuing need to focus on a lot of the fundamentals.