Tag Archives: Financing Poultry Operations

Reasons Why Large-Scale Poultry Farms Have Lower Production Costs

Have you ever wondered why your competitors’ products may be significantly cheaper than yours, yet they continue to make massive profits margins? During the recent hike in chicken feed prices, there were calls to enforce a fixed pricing strategy for all Ghanaian poultry farmers. Despite the increase in feed prices, larger poultry farms were still charging relatively lower prices for their eggs. This forced some smaller farmers to attempt replicating the low price strategy to compete with their larger counterparts (this, of course, was a wrong decision). As you’d imagine, many small scale poultry farmers had to close down their farms since it was unsustainable for them to keep charging extremely low prices while the cost of production kept skyrocketing. With that out of the way, let’s delve straight into some reasons why larger-scale operations almost always incur a relatively lower cost per unit production.

How Many Birds Should You Start Rearing as a Beginner?

People usually ask me for advice on the advisable number of birds, especially layers, to start rearing as a beginner poultry farmer. In the past, I used to advise them to begin by raising 200 layers. Because 200 layers could potentially bring in a monthly profit of GH₵ 700 so in my opinion, this is the minimum number of birds you should raise if you want to make any significant financial return from poultry farming. However, I have now toned down on this advice. Because for instance, if someone has GH₵ 120,000+ that she’s willing to lose, then it is not a bad idea for her to rear 1000 birds as a starter.

New Poultry Feed Prices & Their Implications

Poultry farming is no longer a profitable business. I am going to sell off all my birds – a farmer lamented. This and many more complaints have been brought about by the recent hike in feed prices. Around November 2020, you could get a 50kg Layer mash for GH₵ 93. Fast forward to July 2021, the price is now around GH₵ 137 (a 47% increase in feed prices in just seven months). As gloomy as this sounds, all hopes of succeeding in poultry farming is not lost yet, and I will explain why.

HOW TO FIND INVESTORS TO FUND YOUR POULTRY PROJECT

I published an article on how you could start a poultry farm with very little or sometimes no money. However, you are not running your farm as a hobby – you intend to make thousands, if not millions of Ghana cedis annually. To establish a poultry farm that can provide you with an exceptional standard of living, you need to invest a substantial amount of money. Unfortunately, the amount of money usually required to start such a poultry farm is unattainable by most people. Hence it would make a lot of sense to find investors.

Is this the Easiest Way to Reach 15,000 Layers in Only Five Years?

The first step is to look for two other partners and register the farm as a limited liability company. Once you have found the partners, the three of you can contribute and raise money to start a farm of 1000 layers – this may seem far off from the 15,000-layer target but hey, every successful company had humble beginnings. With 1000 layers you’d probably have to split a startup capital of around GH₵ 140,000 equally among three people meaning each partner would have to contribute approximately GH₵ 47,000.

This is how Your Farm Could Collapse in Only Three Months

It is such as shame that as of today, many farmers still believe that animal husbandry knowledge alone, is enough for them to succeed as poultry farmers. Don’t get me wrong, treating your birds like sh*t wouldn’t help either – not even if you have a PhD in Business Management. All I’m trying to say is having basic financial skills such as making good revenue and cost projections could very well be the difference between success and failure.

What is the production cost per egg in 2021?

So you have decided to start a poultry farm purposely for the production of eggs. Wow, congratulations! You are entering a multibillion-dollar industry which is still growing but do you know the production cost per egg? I know what you are thinking, “Who cares? I have more than enough money to start a poultry farm” but knowledge of unit production cost could well be the difference between success and failure.

Draw a Monthly Salary if You Want Your Farm to Stay Profitable

I know you might be saying this in your head, “I want to save money and grow my farm but PKOM is telling me to draw a salary from it – WTF!” But please, hear me out first. What you must understand is salaries are part of business expenses. I believe you understand that poultry farming can be pretty labour-intensive so whenever you are preparing your budget, you must make sure to include salaries even if you are the sole worker.