2023 revenues were 22% higher than in 2022, which we consider to be a major achievement. Our milk production has increased dramatically because our biologist tweaked the cow's feed, we have seen a 25% increase in cow milk production (our herd also grew by 12%), whereas goat milk production only increased by 5% (in line with herd growth). Revenues from our beef operations have risen too, our pre-process weight has increased by about 15% and prices have risen across the board. We don't set the price of meat, but at our quality level it is set by the wholesaler (he gets a cut). Our fruits and vegetables business has been a massive success, and we have seen a 55% increase in yields. Two reasons; we added red shift lights to encourage flowering, and we had the benefit of a full year of CO2 dispersion. Finally, our ecologist has succeeded in optimizing our intercropping so that we had almost no pests this year (we are organic...there are very strict limits to what type of pesticides we are allowed to use). We don't expect 2024 to see the same kind of growth
Our energy costs have dropped dramatically because 2023 was the first full year of using methane rather than LPG. In addition, Methane is about 10% more energetic, so our overall consumption has fallen. What has increased is the depreciation charges. In addition, our capital cost charges (which is our Return on equity has been set at 18% for the next four years) remain unchanged. Wages and salaries have grown by nearly 15%, both a reflection of the large number of employees (mostly in the warehousing group) and the increase in wages that we implemented in 2022.
Finally, our profit sharing with our employees grew by 10% over last year's bonus, which means that our total labour compensation for 2022 will be ￡3.05 million or 28%. The farm operates the same way, we did when we worked in the City and provides bonuses to our employees based on their performance and our results. 2023 was a very good year for the farm. The idea of variable bonuses has been complicated to explain to our employees. But in the end, we tell them, the farm does well, they do well! Our staff were given their bonus for 2023 today, as it will be deposited Friday. For most of our employees, the bonus represents a little more than two months of salary. So not an insignificant amount.
Note: We were told by Case not to expect our defective 220 tractor back anytime soon (the one with the seized bolts). We know this because they delivered a new 280 this morning (the seats were still covered in plastic and the tractor had 6 hours on the meter.
Note: We hear that many farmers had a very difficult 2023, where performance was substantially below average. One aspect that seems to have affected their revenues is the amount of rain that fell during the year. I know that on our second and third cut of the year (for hay) we were incredibly lucky with the weather, the same can be said of our corn silage where we also had excellent weather. The rest of our operations are not affected by the weather (high tunnels). We reduce the bad years, but we don't benefit from the exceptional years. Our performance is steady.
Note2: I was asked why bonuses instead of higher salaries. The reason is we consider part of our performance as a windfall, as opposed to revenue from ordinary economic activities. If meat prices rose by 20% and feed costs only rose by 10%, as was the case in 2023, some of that price increase is economic profit, hence the bonus. That price could easily fall in 2024. Firms, even in the city, try to retain 100% of these economic profits -- we share about 50/50 with our employees. Last year's bonus was about 1 month's salary...so nice but not "NICE" but one employee told my wife that this year's bonus was so much larger than 2022's that they now understood what we mean by profit sharing.
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