• November 17th, 2019

Opinion: Volume is key in poultry

Emilie Abraham

The poultry enterprise is one of the farming businesses that have the potential to efficiently challenge redundancy problems in the country, mostly among unemployed youth. It is pleasant to note that the number of small-scale poultry farmers is growing by the day and increasing numbers of youth and women have risen up to create job opportunities for themselves, it is indeed commendable. A frequent question asked, however, is how many chickens should one start with to realize a good profit margin and make a living from this enterprise? As commonly stated, “The higher the risk, the higher the profit”. This is particularly applicable to the poultry enterprise as one needs larger volumes in order to realize good profits. It is imperative to note that total variable costs in addition to total costs per bird are higher in smaller flocks, in contrast to medium and larger flocks. 

For instance, the production cost per bird in small-scale broiler production (meat birds) is approximately at N$65.00 per bird for a flock of 100 birds. Furthermore, trends show that production costs increase with smaller flock sizes below 100 birds and gradually reduce as the flock sizes increase above 100 birds. In essence, the larger the flock size, the lower the production cost per bird and the improved competitiveness of the poultry business. This article seeks to articulate the reason why farmers should aim for larger flocks when venturing into the poultry business.

Starting small
Farmers are often advised to start small; however, the question is how small should one start? Starting small is crucial so the farmer has time to gain experience to run the poultry enterprise smoothly. Starting with a large flock without enterprise knowledge can be a huge risk to an emerging farmer. However, a farmer should not start too small and limit the potential of realizing sufficient profits to sustain their living and the prospects of expanding the enterprise. For instance, if a farmer starts with 30 layers, they should be able to collect at least 24 eggs per day if husbandry practices are up to standard. Assuming eggs are sold at a minimum price of N$2.00, the total income per day will be N$48.00. The cost of feed alone per day (supposing each layer consumes 110-120 g per day) and other things held constant (ceteris paribus), the total feeding cost per day can be approximate N$29.00 for the total flock excluding vitamin supplementation, labour costs, water and lighting costs, etc. It is therefore advisable for prospective egg producers who intend starting small to start with at least 200 birds and meat producers 100 birds if the business is to carry its own operating costs and generate profits to enhance sustainability. It is worthwhile to note that the larger the flock size the more efficient the business becomes. This is because some production costs are proportionately constant regardless of the flock size and hence those with larger flocks enjoy efficiency benefits.

Economies of scale
Generally, productivity should go hand in hand with efficiency (producing more output with minimal input), and thus to achieve efficiency in poultry, the volume is key. It is observed that the majority of poultry producers in Namibia are generally small. This can be attributed to the fact profit maximization may not be the only objective, the farmer may have multiple objectives such as daily subsistence needs. It is imperative for farmers to consider saving and expanding their poultry enterprises to take advantage of economies of scale when the poultry enterprise exhibits high profitability. For instance, vaccination doses available in the shop start from 1000 doses upwards, this will mean a farmer with 1000 birds uses the same vaccination bottle that a farmer with only 30 chickens would use. As a result, the farmer with 1,000 birds will experience greater efficiency than the farmer with 30 birds, as the remaining doses will go to waste. It is therefore imperative for farmers to attend training, consult and seek information before they commence in order for them to gain appropriate skills to navigate through challenges of poultry farming as well as achieve economies of scale.

In conclusion, farmers should adopt stringent poultry management practices. This is because the production cycle of poultry birds is too short (approximately 42 days for broilers and 72 weeks for layers), to correct any problems or mistakes during the bird’s life cycle. Therefore, management issues may compromise bird performance irrespective of the flock size. Thus, to achieve optimal performance and desirable profit margins, good poultry practices should be of utmost priority.

This article is compiled by Emilie Abraham, Technical Officer within Agribank’s Agri Advisory Services Division.

Staff Reporter
2019-10-15 07:16:07 | 1 months ago

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