This one comes with a lot of estimates and guesses because over the
laying period of a hen, the price of feed will fluctuate, the price of eggs
will fluctuate, the price of an off lay hen depends a lot on how many you need
to sell and where.
It’s also depressingly common for percentage egg production to fail
to meet expectations due to any one of a multitude of factors.
So, take it as a base on which to do your own costs not as a fixed
thing. It’s a moving document.
Put it into excel and play with the figures. What are the effects
of having more birds per employee or of getting a better price for off lay or
having them in lay for an extra six months or a year?
What is the effect of having ten times the number to save on
transport cost? What is the effect of an increase or reduction in average egg
price or feed price or off lay hens? If you cannot run these scenarios and
figure out the boundaries, best choose another way to gamble your money.
Budget
for 1000 layers
Income
Average 320 eggs per bird @ K50 per tray = K533, 300
Off lay hens to sell after production 800 at K45 = K36, 000
Total = K569,
300
Costs
- Chickens (1000 at K140) = K140, 000
- Feed (average 110g/bird at K357 per bag) = K286, 671
- Trays (5000 empties at K2) = K10, 000
- Labour (one person full time) = K14, 475
- Transport - K10, 000
- Electricity - K5, 000
- Disinfectants - K750
- Medications - K500
Total costs = K467,
396
Net income = K101,
904
Breakeven
% lay at K50 per tray 77%
Breakeven price at 80% lay K48
This is a very mobile thing that tiny changes in feed prices or egg
prices or production percentages have huge implications on the bottom line.
I have left out financing costs, equipment costs, wear and tear and
building maintenance etc. to keep it a bit simple to make it easier to
understand. However, in reality if you omit these costs, you will be fine for a
little while and eventually unable to repair a collapsing building.
It’s also worth pointing out that the purchase price of the hens is
a significant capital input and if not costed into the egg price leads to
producers happily selling eggs covering immediate current costs and then
completely unable to replace hens that have reached the end of their productive
laying period. This is a common disease of new producers and they depress
prices for everyone and then close only to be replaced by another newcomer
making the same mistake.
The replacement cost of the hen is part of your egg cost. If not,
you are donating your capital to your customers. If you bought a hen at K140
and sold it at K45 after it laid 11 trays it costs you (K140 - K45)/11 = K8.63
per tray sold that cannot be spent on feed or transport or the farmers’ upkeep
but has to go back towards replacing hens
It’s cheaper to rear your own hens, but then you carry the time
delay and significant disease risks. I will share a rough estimate for that
next week.
- Ruth
Henson
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