Chicken economics - cornish cross

Cornish cross chickens are the standard meat chicken for the American market. Joe Salatin uses them exclusively in his pastured poultry operation, and most of the small farmers use them as well. All of the pictures for this entry are chicks that are IDENTICAL in age, and they're used to illustrate the amazing growth of these chicks. The chick on the left is a heritage breed chicken, the buff orpington. The one on the right is the cornish cross.
The cornish cross goes from hatch to slaughter weight in 6 to 8 weeks. From a farmers point of view that's a very quick crop. Because the grow-out time is so short, the labor costs are less, as well.

Here's the breakdown for 100 cornish cross:
equipment for 100 chicks:
4 30 gallon rubbermaid tubs and metal shelving (to keep the chicks in the tubs)
$80.
4 heat lamps,
$52. 4 heat bulbs,
$32 4 feeders,
4 1 gallon waterers, $35

This equipment lasts for at least 2 years, and during the year will be used to raise 6 batches of chicks. Notice -- more batches of chicks per year. So I'll assign 1/12th the cost of the equipment to this particular batch, or $16.10. If you were to raise fewer batches you'd be assigning a higher fraction.

Labor I calculate the labor as if I were paying someone minimum wage + all of the associated overhead taxes (medicare, social security, unemployment insurance, bookeeping, which adds about 40% to the base wage). I can't imagine getting someone to work for me for less than an hour a day, so figure labor at $7/day, or $50 a week. Over the course of the 8 weeks to brood out this batch, that's $400. More labor for cornish cross because they require more bin cleaning because of the large food intake.

Mortality Figure 15% mortality. That's pessimistic, but pessimists are only pleasantly surprised. Consumables :
Purchase price of chicks + shipping: $1.57/each
300lbs chick starter, 2100bs lbs of chick grower, $330. Yes, they will eat more than a ton of food.
(calculated as 100 chickens * 6lbs per chicken * 4lbs of feed per pound of chicken produced)

Wood chips/sawdust, $70 - we use free chips from tree service companies, but if we had to buy sawdust or chips, that's what it would cost in bulk.

Total cost to produce 85 chicks: $957, or $11.25 a chicken.

That's cost -- with any business you need to make a profit for when you lose a batch of chickens to a weasel, or your shelter blows away, or any of a number of other bad things.

So if you retail these chickens at $4/lb dressed, and they dress out at 4.5lbs, this gives you a gross sale amount of $18.00. Out of the $6.75 gross profit you'll subtract whatever you need to for processing costs. I figure that one person at minimum wage will clean 5 chickens an hour, and that adds up to a processing cost of $3 per bird, giving you a net profit of $3/bird. So a batch of 85 birds will net you $240 every other month. I've ignored marketing costs and the cost of whatever processing equipment you'll need.

I think that $4/lb is a little low. $4.50 a pound would give you a net of $5.25, which seems more reasonable. The problem is that many folks out there are selling birds for less than that. Usually these folks last a year or two, but there's always enough of them that you'll have lower-than-your-cost every year. $5/lb gives you a little more cushion. Maybe you give your minimum wage guy a $1/hour pay raise.

Buff orpington and cornish cross at 10 days of age

You'll find a similar breakdown of the costs of raising heritage birds here.

Chicken economics - heritage breeds

MMP asked me what economics looked like for raising a batch of chickens, input costs, equipment, and so on. I've found that it's just as easy to raise 100 chicks as it is to raise 3, so I don't deal with less than 100 chicks at a time. This time of year I'm brooding 250-500 chicks constantly in batches spaced about a month apart, plus hatching my own eggs from turkeys and chickens. I'm self-sufficient on turkeys this year, but still purchasing about half my chicken chicks. I went to my own turkey flocks because poults don't transport well and are very expensive -- $6-12 per poult vs $1.80-$2.25 per chick.

So I'll do a rundown of laying hens based on a batch of 100 chicks. The numbers are similar for other types of chickens.

equipment for 100 chicks:
4 30 gallon rubbermaid tubs and metal shelving (to keep the chicks in the tubs) $80.
4 heat lamps, $52.
4 heat bulbs, $32
4 feeders, 4 1 gallon waterers, $35

This equipment lasts for at least 2 years, and during the year will be used to raise 3 batches of chicks. So I'll assign 1/6th the cost of the equipment to this particular batch, or $33.20. If you were to raise fewer batches you'd be assigning a higher fraction.

Labor
I calculate the labor as if I were paying someone minimum wage + all of the associated overhead taxes (medicare, social security, unemployment insurance, bookeeping, which adds about 40% to the base wage). I can't imagine getting someone to work for me for less than an hour a day, so figure labor at $14/day, or $100 a week. Over the course of the 6 weeks to brood out this batch, that's $600, but we're usually brooding 200-500 birds, so I'm only going to assign half of that labor cost to this batch. Call it $50 a week for 6 weeks, or $300. To keep the birds clean and healthy it does take 20-30 minutes per day per hundred chicks.

Mortality
Figure 15% mortality. That's pessimistic, but pessimists are only pleasantly surprised.

Consumables
Purchase price of chicks + shipping: $2/each
300lbs of chick starter crumble, $72
Wood chips/sawdust, $20 - we use free chips from tree service companies, but if we had to buy sawdust or chips, that's what it would cost in bulk.

Total cost to produce 85 chicks: $624, or $7.34/chick. That's cost -- with any business you need to make a profit for when you lose a batch of chickens to a weasel, or your shelter blows away, or any of a number of other bad things. So I won't sell them for less than $10 at this point.

That's the cost to get the chicks up to 6 weeks of age -- old enough to get out on pasture. After that the labor costs go down -- instead of cleaning bins we move the pens with the tractor. instead of having to hand-feed and water each bin, we're filling a large bulk feeder and waterer once every other week.

The outside equipment is more expensive than the indoor, but spread over a larger number of birds. So figure equipment costs for this batch at another $30, and labor at $100/month for 4 more months, or a total of $400 more. Figure another 5% mortality. To feed the chickens out to full adult weight takes 800lbs of feed at a cost of $180.00

My feed mill loves me, by the way. I buy 6 tons of feed a month, between the chickens and the pigs.

6 week cost: $624
+ 6 month cost $610
Cost to produce 81 birds: $15.23 each

I'll potentially invest over $1200 per batch of 100 before I see any return.

I sell those birds for a variety of prices. Qty 1-3, $25 a bird. 4-10, $22 10+ $20.

I don't sell birds for less than $20. If I don't sell the bird it becomes part of my own laying flock, and I sell those eggs for $5/dozen. Being next to a big city helps a lot.

In my opinion the biggest mistake that most farmers make is forgetting to pay themselves for their own labor. minimum wage in WA state is around $9/hour, and being an employer, all of that overhead I talked about would exist if I were to hire someone -- so I figure it in. If I do need to hire someone in the future, I've got the revenue to do so at the current wage. That way if I do decide the grow the farm I'm all set for an employee. If I can't make it work at minimum wage, I go back to the drawing board and work with my prices. Doing this sort of math also helps you hold the price when you've got a customer who wants to haggle. I can't tell you how many people I've seen selling animals at less than the cost to produce.