Is Your Poultry Profitable

Right now, livestock farmers are in a difficult position. Feed prices have skyrocketed and it can be difficult to pass that entire increase on to our customers without having very expensive chicken that might be out of the range of most of our customers. We might need to raise our prices to help recoup some of the cost but we also need to find areas where we can improve efficiencies, cut costs, and know where our greatest expenses lie.

The three greatest expenses in meat bird production are feed, processing, and labor.

Feed
We might not be able to do much about the cost of our feed but we can look at how we feed our poultry to see if we can improve efficientcies and decrease waste.

Jeff Mattocks is poultry nutritionist from Fertrell. Jeff has created many of the poultry ration recipes used specifically for birds raised on pasture. Here is what he suggests;

• Make sure feeders are level with the birds' back. This will help prevent the bird from "sorting" or scratching at the feed.
• Feed enough feed so that there is only about 10% feed leftover from the previous feeding. This will prevent sorting and wasting. The bird will eat more of the complete feed rather than just what it wants to eat therefor, you'll have a more efficient use of feed and better, more consistent conversion rates. Think of it this way, if you go to a buffet, you tend to eat only what you want to eat. If you are served a limited amount of selected items, you tend to eat what you are given. The same applies here. Eliminate the buffet.
• Provide enough feeder space. The amount of feeder space given to each bird should be increased as the birds grow. This will avoid crowding and potential injury.

 
Processing
Processing birds can take a lot of time and requires a fair amount of labor. Not only is there time in the actual processing of the birds but there is also the cleaning and sanitizing of the work area and packaging once the birds are chilled. All this should be factored in as an expense to your enterprise.
I know, “we don’t count our time”. But you may want to think about putting a value to it whether you are paying your self for your time or not. What would you pay someone to do this work if you had too? Once you attach a cost to everything that you do to go from live bird to packaged bird, you will able to know your per bird processing costs.

Here again, look for opportunities to improve efficiencies. We all get use to doing things a certain way and after a while, we don’t question it. Take a look at each step of the process and question the proceedures you use. Do they make sense? Is there a reason to do it this way? Can we do it better or faster without sacraficing quality? A few small changes might make a big difference in your bottom line.

Processing equipment (or any equipment) is not a one-time-purchase. You may plan on never buying a scalder again but you will need to maintain it and you need to replace it should your business grows. The only way to do this by amertising your equipment purchases. Estimate the life span of your equipment, what is the replacement value, spread that value across the estimated life span of the equipment and you will have your annual processing equipment costs.

The question is, how do we recoop these expenses? Luckily, there is nifty new tool out now. It is an interactive budgeting tool developed by Washington State University. As their website states’ “This web tool contains two calculators – one for poultry production and one for poultry processing. Once you enter information in each field and click the “Submit” button, the tool will generate a customized report that you can print for your records”

Source:Penn State Extension