Have you bought eggs lately? If yes, I am sure you were shocked when you heard that a piece could be costing Sh20! The volatility in the egg prices is likely to continue in the next 12 months and this could and will dramatically impact on how consumers buy their preferred poultry products and eggs. For layer farmers, if you are strategic, this is a time to make a kill. Whether you are just starting out or improving your layer business, understanding the basic financial management of your flock can help you feel in control of your financial loss or enhance profitability. Here are four tips on layer economics to turnaround your business into a profit making unit.
- Learn to manage your fixed costs
Commercial chicken farming requires a high level of expertise, understanding and commitment to be successful. Whilst it’s important to always emphasise the need for excellent flock stockman ship, something that comes with experience and aptitude, adopting the right financial management skills will set a firm foundation for success.
What are your fixed costs in your egg production venture? These are expenses to a business that don’t change even with an increase or decrease in the number of chicks and services. These costs include, cost of construction, or rent, cost of drinkers, feeders, weighing scales, salaries, utilities like water and power, interest expenses etc. These costs must be tabulated and managed prudently. Most of them will have to be depreciated over a period as they will influence profitability at different times in your farming journey.
For example, it will cost you approximately Sh250,000 to construct a layer unit for 1,000 birds. This amount of money can be recovered over a period of two to three flocks. Do not be discouraged if you cannot get a return on your investment in the initial crop cycle.
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- Monitor your variable costs
Unlike the fixed costs, variable costs in poultry egg farming are expenses that change based on how many eggs are produced and sold. These costs include the expenses on day old chicks incurred, costs of brooding, vaccines, vitamins, disinfectants, and feeds. They vary on a daily or weekly basis and as the birds grow and produce the eggs. The feed cost accounts for 70 per cent of these costs and must be judiciously monitored. On a guiding principle and for a good flock on good feed, between one to eight weeks of age, chick mash consumption should total 1.8kg/bird, grower mash at (9-18 weeks) total 5kg/bird and layer mash at (19-78 weeks) total 50kg/bird. Water consumption should be critically monitored, and any health products bought should only be administered on prescription only by a veterinarian or para-vet.
- Performance is key
Rearing is the investment phase for future egg production and the productivity of a flock depends to a large extent on how successful key performance targets are achieved during this period. The first five weeks of a pullets’ life is critical as this is the period of organ development, if the environment and nutrition are provided adequately.
You should target a weight of 380-400 grams per bird. Provide enough feeders and waterers for your birds all the time. This will ensure that 90 per cent of your birds are growing within the standard curve and hence will come into production at relatively the same time.
Take good care of your growing flocks as they will take care of you during their production stage.
- How inflation will affect consumer’s protein choices.
Inflation is a cause for concern for any business person. Inflation is the rate of increase in prices over a period of time or simply, the cost of living. We all know that prices of electricity, fuel, maize flour, transport, consumer goods have gone up and citizens are cutting back on unnecessary expenditures. As prices of beef, mutton, fish, chicken, and other proteins increase, consumers will be forced to make some difficult decisions regarding protein consumption and demand. I think that eggs will be a preferred source of protein as they are versatile, easy to cook and well positioned in our future diets as it cuts across all religions.
We are looking at a strong year of egg demand, so tighten your seat belt and get ready for take-off.
[The writer is Head vet at Kenchic, firstname.lastname@example.org]