Is Poultry Farming Profitable?

Want to know if poultry farming is profitable and the right choice for you?

Poultry farming continues this day to be one of the most profitable forms of livestock farming throughout the world.

On a large commercial scale, studies show that poultry farming can make an average gross profit margin of 24%.

Smaller scale operations (at backyard level, for example) could achieve much higher margins, albeit at lower levels of production.

With poultry farming…

1. …you can start at any scale, with as little or as much start-up money as you have.
2. …demand for chicken meat and eggs it only growing.
3. …if you’re diligent you can avoid rising costs and falling prices.

So, yes – investing in poultry farming has lots of business potential.

In this article, I’ll reveal the key factors that will influence your poultry profits the most. With this you’ll be in a much better place to make your decision.

Is Poultry Farming Profitable? Top 10 Factors Affecting Poultry Farming Profit

Poultry farming profit is defined as being both the short term profitability (i.e. gross margin) and long term benefit (return on investment, ROI).

This is a list of factors that will affect both the short and long term profit of your poultry farming business:

1. Land & start-up capital cost

The cost of land greatly influences the long term investment return profile of a poultry farm. As a premium capital cost of start-up, the cost of land acquisition can actually make what otherwise might be an operationally profitable poultry business a liability.

One of the biggest factors of long term positive ROI on poultry farming projects is the possession of underutilised land that would be suitable for poultry.

Even a small head start in this area is worth getting to launch at a smaller scale. The capital savings are a great advantage.

Let’s say you wanted to start a 5,000 broiler capacity farm, but only had land sufficient for 500 birds to begin with.

My advice would be to begin with 500 birds (minus the land acquisition cost) and upscale land capacity as profit permits you to invest in a larger plot down the line.

2. Rearing model

Economies of scale multiply profits in poultry farming. The more birds you pack in during a rearing cycle, the more production you output for the same marketing and sales efforts.

This provides cumulative gain for your business. Look into multi-flock production modelling for greater layer and broiler profits.

3. FCR

Your birds ability to convert feed directly into eggs or meat is a direct correlation. Some breeds are much more adept ot this than others. Hence popular, sought after strains like Cobb 500 broilers or ISA Brown layers being used the world around for their predictable results.

Choosing a breed of chicken that has an advantageous feed conversion rate or ratio will optimise your production profits. In other words, a higher FCR will give you more egg or meat against the related cost of feeding the flock.

4. Premium pricing

Pile it high and sell it cheap decimates profit margins by laziness of mind. Be imaginative and inventive – target the most profitable niche demand for your product. Investigate all kinds of product usage trends. See where your efforts would be best spent per lb. or kg. and align your business model accordingly.

5. Minimising feed waste

Every grain counts in poultry farming. A single grain holds a proportion of your future profits in the weighing scales.

For every grain that misses the beaks of your birds, you lose production potential and take shavings off your gross profit.

Make sure the feed reaches it’s destination. Minimise waste.

6. Ventilation

If you are rearing poultry in hot weather, then ventilation becomes an important factor in production efficiency.

When birds become overheated they feed less and lose weight. A consistent programme of ventilation management keeps the birds at optimal temperature for production and adds money onto your bottom line.

7. Feed formula/mix

The right nutritional balance of feed leads to optimal grow or egg laying. Adopting the most nutritious mix gives your birds the best quality input to reward you with peak output.

8. Feed preparation

Grain size and texture play their part in providing the optimal conditions for maximal uptake by birds.

At varying ages, birds will require or favour different types of preparation e.g. grain size etc.

Staying ahead of the curve on the nutritional requirements of your birds will help you maximise profit. The more appetising the preparation for the birds the more consistent their eating habits and consistent their production.

9. Repeat custom

Retaining custom is a common business profit maximiser. Customers who buy repeatedly with you reduce your marketing costs and increase your baseline of recurring revenue. They make your earnings more predictable and give you more financial prudence.

11. Direct marketing

Cutting out the middleman puts the emphasis back on your team’s natural ability (or otherwise) to go to market direct. If you can crack this then you retain full control of your gross margin. This will help you reinvest in more rapid growth.