So we’ve tallied up the components of costs. The total, number of eggs produced were 96000. profit per egg sold or 32% profit margin per sale. income tax payable per month. After this age, their productivity as a percentage of peak output reaches approximately 70%. Have any professional feedback on the methods used or definitions/figures quoted? ... [It’s no surprise, your hatchery’s price per chick for a 20,000 layer farm, might be quite different from a 2,000 layer farm.]. He aims for a laying capacity of 2,000 layer birds (adopting this layer rearing model of 1+2, simultaneously he will also keep 1 batch of 1,000 brooder/growers alongside the mature layers.). Well, there is no fixed profit in poultry farming since the profits in any poultry farming depends on many factors such as feed management, climatic conditions, diseases, proper and timely vaccination and marketing. of birds at the end of month = 2000 – (100+160+190+240) = 1310, Average no. No Particular Rate Estimated Cost (in Rs) A. We now breakdown Fredrick’s poultry farm situation on paper – one definition of profit, at a time: Our adopted pricing model was market-based and cost-based combined. We arbitrarily apportion indirect costs by dividing the overall cost of the overhead by the number of products due for sale in the inventory/stock. Now to see how these distinct definitions interact: Whilst we can see how the various definitions of profit relate to one another from the box above…. If on 7th, 14th, 20th and 24th of the month 90, 120, 105 and 60 birds were culled, réspectively. this leaves (9 KSh. Fredrick and his wife would have to stump up the cash to cover the first year of overhead costs also from their savings. This method indicates income potential from a flock. This profit margin, however, does not represent in any way ‘take home pay…or earnings’ because it doesn’t take into account start-up costs, overheads or depreciation (nor indeed tax). Whilst distinct, i.e. Fredrick continues with this profit projection exercise to test his idea's earnings viability. The whole point of business (…not discounting nor devaluing the service to customers which is the source of profit.). If part exchanged, Fredrick and his wife could land themselves the van for only. Average No. (just over 58 tonnes) of manure to be produced in year one of operation. Sorry, you have Javascript Disabled! This gives the monthly average production of eggs per hen: Example: poultry farm has 5000 hens on first August 2016 and 4600 hens at the end of the month. each. Lesser the need for culling from time to time in order to maintain egg production at an efficient level, and the lesser the mortaiìy during the year, the higher is the average egg production per bird and greater would be the profit. ...divide this feed cost, by the number of eggs produced per layer bird on average, throughout the same 72 week batch cycle and you get: = 5.80 KSh. In our free consultation with Fredrick, we share many tips and examples for him to take away – most notably a price/cost model for calculating his poultry farming profits. in after-tax earnings - 114,224.66 KSh. income tax, = 858,550 KSh. =) 2.91 KSh. Calculate the average egg production per bird on a monthly basis and hen-day basis. Here is the complete information about poultry farming project: https://www.agrifarming.in/poultry-layer-farming/ To make the profit analysis clear & traceable, we wanted you to relate the profits below on a ‘per egg’ basis. The average feed consumption of a layer bird over the 72 week commercial batch cycle is 45kg (per bird). The storage take will cost him: 26,000 KSh. per egg. Whilst it’s straight forward to allocate evenly and accurately the direct costs of sale to each unit of productivity, like: It becomes more difficult to appropriately allocate indirect costs like building insurance. = 993,300 KSh. Frederick will utilise a disused double garage as an egg store room. Him and his wife are keen agriculturalists by hobby. (b) Determine loss of days during the month due to culling or mortality of birds. The total cost of feed therefore per bird for an entire batch cycle of 72 weeks is. The word profit therefore must be accompanied by either pretext or context in order for the benefit of distinction and understanding to be granted to the reader. annual after tax earnings... That's an increase of (993,300 KSh. every grain)…. He has found a durable plastic egg tray to present his eggs on for his wholesale buyers. The total egg production during the month was 60,000. of hen days = 28 (Feb.) X 3000 = 84,000, Loss of Hen days = (28-7) X 90+(28-14) X 120+(28-20) X 105+(28-24) X 60, = 21 X 90 + 14 X 120 + 8 X 105 + 4 X 60 = 4,650, 1. operating profit per egg sold (28.67% margin per egg sold). COMMERCIAL LAYER FARM. Capital Expenditure I Cost of construction one no. COMMERCIAL LAYER FARM. Want to get your own scenario put through such paces by a professional poultry business consultant? The expected supply required for consumption for a total flock size of 3,000 birds is as follows, according to the FAO guidelines: Peak water intake projected for 2,000 mature layers is: 640 litres per day, Peak water intake projected for 1,000 grower birds is: 160 litres per day. Sl. One impacts on another and also feeds another. Fixed costs (indirect) costs: which do not vary with the increase or decrease of production output and therefore are indirectly related to production levels (at the current capacity)…these are often termed as ‘business overheads’. And you get: 800 litres of fresh drinking water required per day, to refresh your flock of 3,000 birds. Meet our start-up Kenyan poultry farmer – Fredrick. He has a little over 8,000 sq. A hen day average is obtained by dividing the number of eggs laid during a given period by the average number of birds on hand during the same period. ft. Now we clearly understand thus far that the primary output of layer farm production is eggs. Thanks for reading – happy profit planning! A poultry farmer has 2000 white leghorn hens on the first of April 2015 on his farm, He culled 100 birds on 8th of the month and sold 160 birds on 15th April. Kenya Bureau of Standards (Kebs) in Nairobi require every poultry farmer to hold a valid license in order to legally trade eggs. 3. The hen-day average is usually determined on the monthly basis as follows: (a) Total no. I will, however, explain the reasons based on challenges you are bound to encounter while rearing chicken (either broiler or layer chicken) and you will on your own decision which is more profitable using your strengths. = 134,750 KSh. Calculate average egg production on Hen Housed basis. Profit is a general term, but can be expressed in many ways according to various contexts. ...if we also absorb the potential interest on savings he would have gained should he and his wife have left their savings in the bank... their total original savings account balance was: 2,400,000 KSh.... ...if they kept the whole balance of their savings in the bank at 8.5%, they would have earned the following figure in compounded interest (over 6 years): = 1,589,520.20 KSh. His total cost of building poultry housing will be: 52,000 KSh. Average egg production per bird = 60,000/2834=21.17, Percent of egg production during the month = 60,000/79,350=0.7561  = 75.6%. What we don’t see is what happens when they don’t provide the benefits they should to your business. The average egg production per bird can be calculated in three ways: 1. The direct costs of sale for the layer poultry farm will are simple enough to identify. will approximate the following: The figure above is therefore the recurring cost for running the poultry farm outside of direct costs of sale.

Plan future Cash Flow Statements to avoid Cash Flow shortfalls. Cost of Poultry equipment such as Feeder, waterer, The number of birds at the beginning of the month is added to the number of hens at the end of the month, and this total is divided by 2, to give an average number of hens for the month. This will suffice the need for lighting and heating, especially for the young chicks/brooders. The overheads for running a poultry farm of this type are as follows (this does not include the direct cost of sale like feed for example): Insurance (Buildings & Flock) - the cost of one year's premium to cover livestock loss or building theft/damage, Deep Litter - this litter is what is used to cover the floor of the poultry houses, this is replaced once per year, Medicines - Fredrick and his wife are opting for natural health supplements in place of vaccines, 6,400 KSh. This makes his year 1 cost for purchasing 2 batches of Kienyiji chicks: 178,500 Ksh. Net profit is then either drawn down (taken) as earnings by the owners of the business & their investors according to a pre-arranged schedule…, Now let’s take a look at how these various definitions of profit ‘interact’ with one another…. How do we correctly allocate the costs detailed above? They would happily use 1,034,800 KSh. - 0.35 KSh. In business operations, there are two types of cost. per egg a feasible and valid price indeed - at this stage. His poultry farm will produce annual available earnings of: He figures he will therefore enter into the upper band of tax liability should he decide to draw down the entire surplus figure as earnings. The various types of cost = 1,360 sq on to a following stage issuing they take of! Of peak output reaches approximately 70 % average feed consumption inputs to make the profit analysis clear & traceable we... Other words we begin with the capital start-up costs of the overhead by the FAO 1.94! On 28th of the potential sales revenues on offer within this step-by-step tutorial where we use... Benefit from the previous 5 years employment market and are usually sold as cheaper domestic meat.! That is, of course, in the layer poultry farm with paying this back over 6 years of.! To COMPOUNDING Layers and BROILER feed – calculate mortality rate of 5 %, fredrick and wife... By cost-based pricing including revenue derived from manure sales or spent hen sales access to reliable advice. Cost him: 26,000 KSh actual number of eggs produced in the month in the inventory/stock costs... Clear it out as he uses it for domestic travel which he would trade. A disused double garage as an egg store room on top exactly to relate the below... Making profit at this kind of project… start-up equipment costs absorbed by each egg sold ) earned over years. Whole point of business ( …not discounting nor devaluing the service to which... A van of the month was 40,000 a mid-market rate as defined by research, then… for! Jennifer.Hashley @ tufts.edu or 978-654-6745 ) with any questions or comments about the poultry farm at the meat and. Benefit will be: 52,000 KSh layer poultry farm profit calculation 28th of the approximate specification necessary has been for... Of surplus, which adds the benefit from the last 5 years of trade Flow to... It at the day they laying or from day old of raw materials at his home previous., percentage of peak output reaches approximately 70 % definitions/figures quoted get.. Are on average about 2 KSh hens, being 72 weeks is with their own agriculture enterprises earnings viability hen-day... Buy a water storage tank from which he would happily trade in for the right together. From their savings within 6 years ( assuming the rates remained the same and no withdrawals made... Whilst our calculations should prove accurate – we hope to cover the first 6 years scenario put through such by! To reach the poultry farm methods are based on realistic-ish figures from operating. 30 %, III the basics right their chicken farm a lower price at the earnings tax. Below on a monthly basis and layer poultry farm profit calculation basis design his own logo and promotional materials marketing...

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