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PostPosted: Fri Jan 26, 2018 3:14 pm 
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Gallant Game
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Everywhere I look on the internet the wise people say you can't make money from breeding and selling poultry on a small scale.

Nnyeah... I thought - that surely isn't true!

So I set out to try it out for myself. Wouldn't it be great to start a little side income hobby business from poultry and even turn it into a full-blown business? Well, think again. I gave it a real good shot, and made exactly $0!

Here's what I did. I carefully chose a sex-linked hybrid cross from traditional bloodlines to produce sexable chicks at hatch. I hatched them out like the clappers. Sold them privately and to fodder stores.

Female layer chicks were priced at $10 each (from dual-purpose breeds) for day-olds

Male chicks were priced at $2.35 each (as free-range slow-growing meat birds) for day-olds

I bought my feed at less than wholesale price (farm produced grain mix combined with appropriate levels of protein, calcium and a micro-nutrient mix).

I bought a couple of cheap Chinese incubators on Ebay as a cheap quick way to increase production.

Costs were:
Buying in extra breeder birds
Feeding the breeder flock
Feeding the young and growing chicks
Cost of electricity to run several incubators virtually non-stop
Cost of electricity to run several brooder lamps non-stop
Cost of extra brooding pens (done on the cheap)
Cost of extra incubators (done on the cheap)
Cost of extra brooder lamps (done on the cheap)
Excess water charge
Vehicle related expenses (at standard cost per kilometre of private vehicle usage)
Various sundry items such as rat bait, replacement heat lamp globes, feeders and waterers, ant bait etc.
Huge amounts of my time (at least ten hours a week)

I sold the chicks and the feed privately to customers at retail.
I sold some chicks to a fodder store at wholesale.
All this over a 3 month trial period.

After a while I crunched the numbers and on average across the board it cost me $7 (all up) to get each chick to an age of 3 weeks.

I made sales in the 3 months of around $2,000. I spent actual real money to achieve this outcome of - guess what? Around $2,200.

THIS IN NOT ACCOUNTING FOR A CENT BEING PAID FOR MY TIME!!

The one-off capital outlay for this setup was about $650. If I reduce my paid time to 7 hours a week and count the rest as "hobby" time
and don't count the capital outlay, then it payed me about $4 an hour! For the amount of chickens sold, I would have to increase the price from $10 to $26 each for a day old chick to pay myself minimum wage at about $20 an hour. The male chicks weren't even worth retaining for sale and were better to be humanely dispatched at hatch.

Now here's the thing: if I have to sell sexed female day old chicks at $26 each to make basic wage then all the other backyard breeders and sellers who offer chicks for $2, $5, $10?? - AREN'T MAKING A CRACKER AND ARE SELLING AT A SUBSTANTIAL LOSS! (By the way, I advertised the chicks at $20 each and didn't make a single sale. People bought them fairly readily at $10 each for sexed day-olds. I also added $1 extra to the price per week of age as they grew for those I retained and grew on that didn't sell as day-olds.)

Now I know some people's aim is to just breed or sell some excess stock to just recoup some of the costs related to their hobby. I get that and that's all I did for years and fair enough. BUT, if you are selling at those low prices thinking it is profitable as a small hobby income then think again. Account for ALL the hidden costs and you will realise that it is not possible.

So, my advice then?
1. Don't waste your time thinking you can make a little money on the side breeding and selling poultry (unless it is just to recover some of the outlay you have already made).
2. (And this is unlikely to happen but I'll just put it out there...) EVERYBODY STOP SELLING THEIR CHICKENS FOR SO DAMN CHEAP!!

If everybody stopped selling chickens so cheaply, but we all sold them for what they are really worth, then it would set a bottom line precedent (if no one could buy cheap chickens at below cost). People wouldn't be able to obtain cheap chickens and the market would adapt to customers only being able to obtain chickens for a higher price, from all breeders and sellers (not suggesting a monopoly here but fairness for all).

Unfortunately, this is unlikely to ever happen. It is like the small dairy farmers being driven out by the big producers because it costs them more to produce the milk than they can sell it for. The reason why the chicken selling market is so low is because of big chicken business. We have hatcheries producing thousands of chickens a day for industry and these hatcheries are highly mechanised, highly efficient and can't be competed with from a small niche breeder perspective. When you can buy an ISA Brown commercial layer about to start laying (point-of-lay) for $20 from your local fodder store who is going to be daft enough to pay $26 for a day old chick, no matter how appealing the description of the bird is?

Questions, comments, feedback? Fire away...

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Last edited by Mountain Langshans on Thu Feb 01, 2018 12:53 am, edited 2 times in total.

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PostPosted: Fri Jan 26, 2018 6:53 pm 
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Golden Kingfisher
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Wow, very interesting to read the results of your case study! I can't see anywhere you could have saved money and yet still it didn't turn any kind of profit....

Totally agree that we consumers have no idea of the real cost of our food or of our pets! I sell female ducks at $30 to $40 and that would not come close to touching the cost of raising them....let alone the absolutely enormous amount of time to takes to raise ducks in an ethical way (providing constant water access, a clean environment etc).

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PostPosted: Fri Jan 26, 2018 10:05 pm 
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Showy Hen
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This is really interesting...:)
Did your $2000 spent include the incubators and other stuff you would expect to last longer than 3 months? If so, then it means you broke even within the 3 months and this would (perhaps) be reasonable, as in the next 3 months you wouldn't have to count those expenses again. If not, then not factoring these items in means there is a loss in the first 3 months. Businesses frequently work on a payback time much more than 3 months. Perhaps not so bad...... (not saying you will get rich from this venture either though....)

You brought up another thing though, about the only way to get "profitable chickens", being the mass-produced kind in big-business. I also have a moral problem with the very low "life value" chickens have as meat and eggs when you buy them in the shops. I know your post is not about this, but one of the reasons we keep chooks is not only to know what we are eating, but also to know the life they led producing our eggs etc was good. This definitely costs more than it would cost us to get free range eggs in the shops, but to us it is good value.

:)


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PostPosted: Fri Jan 26, 2018 10:15 pm 
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Golden Kingfisher
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Absolutely, Okaru. Being able to eat eggs without compromising animal welfare is what it’s about for me. Doesn’t matter what each egg actually cost to produce.

If only buyers of chicks saw things the same way and were willing to pay a fair price for a bird that has been raised with care and not in a factory-like situation.

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PostPosted: Sat Jan 27, 2018 2:00 am 
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Gallant Game
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Okaru wrote:
This is really interesting...:)
Did your $2000 spent include the incubators and other stuff you would expect to last longer than 3 months? If so, then it means you broke even within the 3 months and this would (perhaps) be reasonable, as in the next 3 months you wouldn't have to count those expenses again. If not, then not factoring these items in means there is a loss in the first 3 months. Businesses frequently work on a payback time much more than 3 months. Perhaps not so bad...... (not saying you will get rich from this venture either though....)

You brought up another thing though, about the only way to get "profitable chickens", being the mass-produced kind in big-business. I also have a moral problem with the very low "life value" chickens have as meat and eggs when you buy them in the shops. I know your post is not about this, but one of the reasons we keep chooks is not only to know what we are eating, but also to know the life they led producing our eggs etc was good. This definitely costs more than it would cost us to get free range eggs in the shops, but to us it is good value.

:)

Thanks, it was actually $2,291.75 in costs/expenses including the additional set up expenditure, so when you take that out of the equation ($659.63) you're left with $1,632.12 running costs/expenses. With sales turnover at $2,012.91 that leaves me with $380.79 net profit. I assigned roughly 90 hours to this enterprise over 3 months so that pays me $4.20 an hour without paying back the extra set up costs. If you account for the set up costs then I made a lovely MINUS $3.10 an hour (that's -3) i.e. $3 loss per hour of effort.

And yes, I was purposely aiming my efforts at producing heritage based hybrids that were healthy, long-lived, free-ranging, sustainable, appealing, worthy of merit and having their own intrinsic value. They and their breeder lines were raised and cared for kindly and ethically.

I'm not sure how to scale it up from here to turn a profit. I'm assuming it's too hard and so I've virtually given up. It's a pity, because I'm sure a lot of people would have benefited from having this type of chicken available to them. I am also underemployed at the moment and was hopeful of creating a small but viable additional source of income.

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PostPosted: Sat Jan 27, 2018 11:18 am 
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Proud Rooster
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I aspire to break even with my poultry but don't do any sums and probably don't get very close. That is of course without putting any value on my time. If I didn't buy bulk wheat and formulate my own poultry ration the losses would be ridiculous.
One of the difficulties is putting a value on the produce. Locals snap up my nice fresh free-range eggs at $5 dozen. What do commercial producers feed their chooks to put eggs in the shops at such ridiculously low prices? What value do I put on the proper table chickens that go in the freezer? There is no comparison between the way mine are fed and raised and the commercial variety.
I easily sell surplus Indian Game pullets at $25 but they have eaten a fair bit of feed by then.
Some of the other benefits are fairly intangible such as the pleasure in supplying friends and family with eggs, meat and replacement pullets. Then there is the manure for the garden and the pleasure and interest in just keeping and breeding them.


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PostPosted: Sun Jan 28, 2018 12:00 am 
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Great Game
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Mountain Langshans wrote:
.... If everybody stopped selling chickens so cheaply, then it would set a bottom line precedent ....
Unfortunately, this is unlikely to ever happen....


That's true, because it's not the people wanting a small (or even minute) business side-line who are happy to sell cheaply - it is the majority, the genuine back-yard hobby people with a few nice birds that they love, willing to sell surplus chickens (and eggs) for almost nothing, and happy to get a few dollars towards feed and basic medication (if used). And rightly so, because a hobby isn't supposed to give a cash return - it's an amateur thing done for the satisfaction of doing it. If I play a round of golf I pay for club membership or day-use or club hire, whatever. I don't expect to earn a dollar every time I get somewhere near par. Most chook keepers have no idea of their annual expenditure on their hobby, nor care. Selling chickens without the cred of being a known face or a recognised regular advertiser is difficult enough - there is no way the majority backyarders would be dictated to about pricing. It's hard enough to suggest that people who gift their eggs to a range of acquaintances should ask for payment, let alone put a fair price of $6-7 a dozen eating or $30-plus fertile.

I love the care you have put into setting the figures out, makes it crystal clear. I'm sure there are people making a small genuine profit from backyard chooks, with niche breeds for niche market and an efficient system. But for most of us, the true figures would come out even further in the red than you've indicated.

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PostPosted: Sun Jan 28, 2018 10:20 am 
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Old Mother Goose
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Unfortunately i don't think that many who purchase chicks look at it as the type of investment they might make in another pet. They see a cheap toy which lays eggs. They don't anticipate the commitment or actual costs that might be involved such as vet care, good husbandry practices etc.
It will only be a small minority of those people who will progress to being prepared to pay more as their interest/commitment develops - they are the ones who will then choose to buy pure breeds.


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PostPosted: Sun Jan 28, 2018 11:17 am 
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Proud Rooster
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So lets stop everyone selling cheap chickens so a few can rape the rest..........

I bred dogs for many years, and now one breed of chicken.

I have always said to those that wish to get into breeding for profit you are wasting your time.
I believe, and know, if you do it correctly and give those animals the best to produce the best, IT WILL COST YOU $$$$$$..........


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PostPosted: Sun Jan 28, 2018 12:49 pm 
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Proud Rooster
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Maybe there is money in poultry if you have a social media presence and earn advertising revenue but facebook is a mystery to me even if I could be bothered.


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PostPosted: Sun Jan 28, 2018 9:08 pm 
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Showy Hen
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I wanted to come back to mountain langshans.......
Did you sell everything you produced, or did you produce more than you could sell?
If the former, the answer is obviously different than if the latter...

Did you only want to sell chooks, or were you considering eggs as well? I saw something about feed on your post, was that a "repackage special deal"?

Just questions..... Answer only if you feel like it.. :)


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PostPosted: Thu Feb 01, 2018 12:00 am 
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Gallant Game
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I have had chickens as a hobby for about 20 years - many breeds. I have shown, and bred for utility, all in the name of good fun, good food and the enjoyment of it all, including caring for the welfare of the chickens concerned. In the past I have sold off my spares to recoup costs a little.

I had fallen on hard times when I was made redundant from my job and I was foolish enough to think that maybe I could earn a few dollars from something I knew a lot about - poultry. The irony is that I should have known better, but I thought I could actually turn a profit. Turns out I gave it a really good shot but still failed.

I don't see any harm in trying a commercial poultry venture as such. All forms of livestock are farmed for profit, even free-range, pastured and organic. But what I discovered, and perhaps should have realised before I tried, is that it is very difficult to impossible for a small poultry enterprise to be profitable.

I could have continued to supply the public with a healthy long-lived heritage hybrid that avoided all the ethical dilemmas associated with intensely bred commercial layers, but because it is not profitable for me I will have to cease my operations and disperse the breeding flock. A pity - in my way of thinking, and a blow to the little guy.

My sales in my local area averaged about ten chicks a week, from day old up to about 8 weeks old. They always sold out and I never kept any beyond about 8 weeks because they were sold. The chicks and the breeder flock were treated ethically and humanely. No corners were cut and they were fed well and looked after properly. Customers were getting a great backyard chicken. I could have hatched more chickens than that but demand wasn't high enough and I didn't want to be left growing out a lot of chicks I couldn't sell. I also bagged up my custom (very nutritious) feed that I obtained at wholesale (or less) and sold on at retail along with the chicks.

I don't think it is fair to compare this to unethical puppy farming etc. It was a legitimate attempt at livestock production for the small hobby farmer or backyard poultry keeper. I do however believe that people don't place a value on poultry that reflects their true worth. This is no doubt largely due to how cheaply commercial forms of poultry can be produced. I don't have any stats so I could be wrong, but I suspect the price people pay for poultry today might be no more than they payed back in the 1970's or '80's, or if more, then certainly not in step with inflation.

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PostPosted: Thu Feb 01, 2018 10:21 am 
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Proud Rooster
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There is nothing at all wrong with trying to set up a poultry business. There just don't seem to be any viable openings outside the industrial scale businesses. Every time I go to a poultry sale I see lots of birds sold for less than it would have cost to rear them. Some exhibition breeders produce very large numbers on the basis that it increases their chances of producing the odd outstanding specimen and sell the rejects cheaply as pretty backyard hens. Even people like me who just sell a few excess birds and can't be bothered with trying to get the best possible price make it a very tough market.


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PostPosted: Thu Feb 01, 2018 9:59 pm 
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Showy Hen
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Mountain langshans, I think you might be being a bit hard on yourself. Actually you did better than many others. You invested time and put in effort, but you did not lose money. 3 months is not a long time to make a business profitable. In fact, in many types of business turning a profit in that time frame would be considered a miracle. I don't think it is reasonable to think you "should have realized" or known how it would turn out. How should you have known?

Big Businesses have market analysts, smarmy gurus, and experts on every aspect of buying/selling. Sometimes those businesses fail completely. You were financially "even" within 3 months after taking an initiative without the "benefits" of the smarmies..... Congratulations! :thumbs:

I asked the supply/demand questions because I like to solve problems. Right now, for you, though, I guess it might be more important to find a steady income. I don't think you necessarily need to give up on the "chook as income" model, either - perhaps just find some supplementary income while you build it up. You might also decide to keep your hobby as a hobby and nobody would think worse of you for that either.


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PostPosted: Sat Feb 03, 2018 4:47 pm 
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Gallant Game
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Okaru wrote:
Mountain langshans, I think you might be being a bit hard on yourself. Actually you did better than many others. You invested time and put in effort, but you did not lose money. 3 months is not a long time to make a business profitable. In fact, in many types of business turning a profit in that time frame would be considered a miracle. I don't think it is reasonable to think you "should have realized" or known how it would turn out. How should you have known?

Big Businesses have market analysts, smarmy gurus, and experts on every aspect of buying/selling. Sometimes those businesses fail completely. You were financially "even" within 3 months after taking an initiative without the "benefits" of the smarmies..... Congratulations! :thumbs:

I asked the supply/demand questions because I like to solve problems. Right now, for you, though, I guess it might be more important to find a steady income. I don't think you necessarily need to give up on the "chook as income" model, either - perhaps just find some supplementary income while you build it up. You might also decide to keep your hobby as a hobby and nobody would think worse of you for that either.

Thanks for your vote of confidence!

I notice a business based in Sydney and Brisbane called "City Chicks" sell day-old purebreds for $25 each and day-old commercial chicks for $20 each. I am not affiliated with them in any way and have no opinion for or against them. I wonder if they make many sales at that price? They do offer consumer package deals and other poultry merchandise also. If they are staying in business and making a profit then I presume it can be done.

Despite me roughly breaking even with my effort, that doesn't account for my time, which wasn't paid for. But I did have customers and sales turnover. The other way to look at it is to see if there are any add-on sales that might facilitate a profit margin even if the chicken breeding and selling only breaks even so to speak. The reason why I was so prepared to call it a day is because no matter how much I increased customer numbers and sales, there was no room to build in any profit margin into the core activity of breeding and selling chickens. Sell a million chickens at no profit and you still have no profit, but if you spent a million hours doing it then you are at a significant disadvantage.

I notice, more so in the UK and America, there appear to be a number of small boutique hatcheries selling various sex-linked layer varieties etc. There is no way to really tell if they are operating at a profitable commercial scale or not, but their existence lends credence to the potential for it to be possible.

Still wondering... (but not sure I should keep putting so many valuable hours into it).

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