Profitability of Poultry Farming in Nigeria
June 28, 2018, 2:42 pm
Are you thinking of going into poultry farming in Nigeria? I’m sure you’ve heard a lot about the profitability of poultry farming in Nigeria and how it is capable of employing millions of people, growing GDP and making you millions of Naira.
Well, as someone who has a first-hand experience of living on and working in a poultry farm, I want to analyze the profitability of poultry farming in Nigeria. Poultry farming is the most common animal farming business in Nigeria. If you want to go into the poultry farming business in Nigeria, you need to be aware of the cost and profit potentials.
I’ll be using four parameters to analyze the profitability of poultry farming in Nigeria. These parameters are:
- Startup capital
- Operation & Maintenance (O&M)
In order to do a fair and thorough analysis, I’ll be analyzing the profitability of poultry farming in Nigeria from the standpoint of someone who’s about going into poultry farming in Nigeria with 500 birds (layers)
I’ll be making an assumption that there’s an available land already. I won’t be factoring in the cost of getting a land.
Poultry Farming in Nigeria startup costs:
- 500 birds (point-of-lay layers): N675,000
- 5 cages (96 birds-per-cage) to house the 500 birds: N250,000
- Cage house or pen construction: N400,000
- 18-months’ worth of feeding (using packaged feeds): N4,522,500
Total startup capital for 500 birds (layers): N5, 847, 500
OPERATION & MAINTENANCE (O&M)
Poultry farming requires a very high level of O&M because the quality of their production depends on how well you manage them. You have to feed them 2 to 3 times a day. You have to make sure you give them quality water to drink. And from time to time, they’ll be visited by a veterinary doctor who will administer drugs and injections to them in order to keep them healthy. Failure to do this will expose your birds to all manner of diseases and flus. I still remember, like it was yesterday, how the chickens in my father’s farm were dying in their dozens due to the bird flu outbreak of 2006.
Also, you’ll need to hire one farm labour to help you with the O&M. Hire someone who lives close to your farm so that you won’t have to pay him or her too much. The current wages of a farm labour for poultry farming in Nigeria is between N10, 000 to N20, 000 a month.
There’s a very good market for poultry products. Eggs are always in demand from both individuals and companies. Companies such as bakeries, restaurants, hotels etc. use eggs for making scotch eggs, cakes etc. While individuals love using eggs to eat bread, yam and to bake as well. The good thing about poultry (layers) is that after they’ve spent 18 months laying eggs for you, you can sell them off at a higher price than you bought them. If you can time the sales of your old layers (that’s what they call layers that have reached the end of their laying cycle) to coincide with a festive period like Christmas or Easter, people will fight among themselves just to buy your chickens!
The excretion of poultry can also be bagged as organic manure and sold to vegetable farmers as well. There’s a very good market, all-year-round, for everything that your poultry farm produces. Selling any of your products will never be a problem. Poultry farming in Nigeria is a business with a very strong cash flow
I’ll exclude the O&M costs from these calculations because the variables can’t be accurately forecasted generally. They are specific to each person’s situation.
Your birds, if well raised and managed, have the capacity to produce 8,670 crates of eggs for you over an 18 month period i.e. 17 crates a day from the 2nd month to the 18th month. You can conveniently sell one crate of egg for N800. So, for 18 months, eggs alone will generate N6, 936,000 (8, 670 X N800) for you. At the end of their production cycle, assuming you have a death rate or mortality rate of 5% (this means 5% of your 500 birds, 25 birds, die during their production cycle) you should have about 475 birds left in your farm after 18 months. Depending on what time of the year you choose to sell them (prices of chicken are highest during festive periods like Christmas and Easter) you can sell each old layer for a minimum of N1, 500 per chicken. So your 475 birds can generate N712, 500 (475 X N1, 500) for you.
From egg and bird sales alone over an 18 month period, you will generate a total sale of N7, 657,500. There’s also money to be made from selling their excretion as manure but the cash generated from this is insignificant compared to the eggs and chicken sales. This is an aspect of poultry farming in Nigeria whose potential isn’t being properly harnessed.
With an invested capital of N5, 847, 500 and total sales of N7, 657,500, your gross profit margin is 30.9%. Note that most of the things you spent your money on like the cages and poultry pen to house the cages are fixed assets in nature. You will be able to use them for future layer productions and you don’t have to recover their cost in one production. In poultry farming, the tanks and most of the structure you put in place are fixed assets in nature and their costs would be recovered over several productions. Personally, I love the positive cash flow aspect of poultry farming in Nigeria because you get to make sales on a daily and weekly basis.
Going by these four parameters that I’ve used to analyze the profitabilty of poultry farming in Nigeria, poultry farming in Nigeria has an overall rating of B. Poultry farming is a good business to go into and it has unique strong points and weak points.
The trick in poultry farming is to know the techniques and practices that will reduce mortality (or death rate) and boost growth and production. The analysis above is not 'cast in stone' or fixed. It's meant to give you a general overview of cost implications. You can decide to do away with some items in order to reduce cost and boost profitablity. For example, you can decide not to use cages and you can opt to manufacutre your own feeds instead of buying already manufactured feeds.
Also, not using cages means your eggs would be laid on the floor making it susceptible to being broken and becoming very dirty.
I hope this analysis helps you to make the decision to start your poultry farming business. There are other things you need to put in place before starting a poultry farming business in Nigeria but the ones highlighted above are the basics. If you need a professional and comprehensive business plan to guide you and help you raise money to start and grow your poultry farming business, you can get one from us. Our poultry farming business plan will show you all the materials you need to get, what you should feed your birds with, profits, balance sheet and cash flow for 5 year's of operation and so much more! Please see a screenshot of our poultry farming business plan below:
For a payment of N15,000 we will send you our professional poultry farming business plan.
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