Let’s talk Chickens: layer costing from point of lay

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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