©Shutterstock Farm for growing broiler chickens to the age of one and a half months.
In a previous article, we did a comparison between broilers and layers to ascertain which one is more profitable, and from our findings, we realized that each of them had its pros and cons. One very important advantage rearing broilers has over rearing layers is that broilers need a relatively short period (2 months) to reach slaughter weight whereas you need to keep layers for over 16 weeks before they start laying any eggs.
So, now that we’ve established some facts about broiler production, let’s delve straight into how much profit can be made.
| Total Revenue | 26,000.00 | 100% |
| Broiler Sales | 26,000.00 | 100% |
| Total Cost of Day-old Broilers | 3,400.00 | 13.1% |
| Gross Profit | 22,600.00 | 86.9% |
| Operating Expenses | | |
| Advertising & Marketing | 780.00 | 3% |
| Farmhand Net Salaries | 1,200.00 | 4.6% |
| Utilities (water & electricity) | 420.54 | 1.6% |
| Feed | 15,473.81 | 59.5% |
| Vaccines | 90.00 | 0.3% |
| Miscellaneous | 1,796.44 | 6.9% |
| Total Operating Expenses | 19,760.79 | 76.0% |
| Net Income (GH₵) | 2,839.21 | 10.9% |
From Table 1.0 above, you can deduce that the 200 broilers were sold for GH₵ 130.00 each. This is why the broiler sales entry in the table has a value of GH₵ 26,000.00. Those 200 broilers sold were brought in as day-old chicks at GH₵ 17.00 each, so the total cost of day-old broilers entry has a value of GH₵ 3,400.00.
In Table 1.0, there is a gross profit entry with a value of GH₵ 22,600.00, which was obtained by subtracting the amount used to purchase the broilers when they were a day old from the total revenue. Remember, the gross profit doesn’t factor in the operating expenses – it only factors in the cost of the goods you are selling, which in this case are your broilers.
There is an advertising & marketing (you can run Facebook ads) entry that has a value of GH₵ 780.00. And also, one farmhand will be enough to take care of 200 broilers. In this income statement, we are estimating that the farmhand will take a salary of GH₵ 600.00 per month, and since the broilers reach slaughter-weight in two months, the two-month allocation for a single farmhand’s salary is GH₵ 1200.00 as indicated in the income statement.
For the utilities, the cost items that are considered here are water and electricity. 200 broilers are estimated to be able to consume 2737 liters of water in two months. And since 1000 liters of water costs around 30 per PUBLIC UTILITIES REGULATORY COMMISSION (PURC) Other Commercial rate, 2737 liters of water will cost GH₵ 82.11. Also, there is a monthly water service charge of GH₵ 100.00 by the PURC, which amounts to GH₵ 200.00 for two months. This means the amount to spend on water alone is 282.11.
For electricity, we assume that infrared bulbs will be utilized for brooding. And since one infrared bulb is enough to provide adequate heat for 200 birds, we can make the following calculations: Assuming an infrared bulb consumes 0.25kW of power when plugged in, in two weeks, which is a good duration for brooding chickens, then the energy consumption within this period is 84KWh: this value is obtained by multiplying the power consumption of 0.25KW by the number of hours the device is being used. In our case, the number of hours is 336.
Since 1 kWh costs around GH₵ 1.09 according to PURC Non-Residential electricity rate, electricity will cost GH₵ 91.56 just for using the infrared bulbs. Also, we estimate that a 15W energy-saving light bulb will consume 20.16KWh of electricity in two months, which means the cost for the electricity consumption of one energy-saving bulb is around GH₵ 21.97.
Electricity usage also comes with a monthly service charge of GH₵ 12.43, so for two months that will amount to GH₵ 24.86. This means the total cost for electricity in the two months is GH₵ 138.43. If you combine the total electricity cost with the total water cost in an earlier paragraph, you will get GH₵ 420.54, which is the value for the utilities entry in the sample income statement.
For the feed cost, we estimate that the 200 broilers will consume 2041.4kg of feed before they reach slaughter weight. Now, if 50kg of broiler feed costs GH₵ 379.00, the total cost of feed for these two months is GH₵ 15,473.81.
For the vaccine cost, in the first, second, third, and fourth weeks respectively, we give the broilers the following vaccines: 1st Gumboro, 1st Newcastle, 2nd Gumboro, and 2nd Newcastle. But in the eighth week, we give them their 1st Fowlpox vaccine. The prices of Gumboro, Newcastle, and Fowlpox vaccines for 200 birds are around GH₵ 20.00, GH₵ 15.00, and GH₵ 20.00, respectively. Hence the total cost of vaccines is estimated at GH₵ 90.00.
Finally, certain unforeseen expenses can emerge later on, and we have included a miscellaneous entry with a value of GH₵ 1,796.44 to handle those. Summing up all the operating expenses, we obtain a total operating expense value of GH₵ 19,760.79.
Finally, to calculate the net income or profit, we have to sum up the cost of broilers sold and the total operating expenses to get GH₵ 23,160.79 and subtract it from the total revenue of GH₵ 26,000.00 to give us the figure of GH₵ 2,839.21 (10.9% margin). NB: All the financial values in the table are expressed as percentages of the total revenue.
The caveat, however, regarding the raising of broilers is that if you’re unable to sell all the birds within 2 months, their operating expenses start eating into your profit. A simple mathematical analysis of the operating expenses shows that the birds consume more than GH₵ 7,000.00 worth of feed per month on average. This means if you keep the majority of the birds for 3 months+, you are going to incur heavy losses. Broilers are relatively harder to sell than eggs. This is because there is an abundance of cheap frozen imported chicken in the market which is a cheaper alternative to broilers.
In conclusion, you could be making around the sum of GH₵ 2,839.21 as profit in just two months only from the rearing and sale of 200 broilers. Now imagine if you could rear and sell not just 200 broilers but 2000 broilers three times in a year, the amount of money you could potentially make would be phenomenal, wouldn’t it?
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