With some hard work and determination, a small-scale poultry farmer can establish and manage a successful poultry enterprise.
While many small-scale poultry farmers have no choice but to sell a batch of fully-grown chickens one at a time, this is not conducive to running an efficient poultry operation.
The SA Poultry Association’s Developing Poultry Farmers’ Organisation (DPFO) is encouraging the formation of cluster groups to overcome these and other challenges, such as access to feed and vaccines.
“People must stop working in silos and stop with the jealousy,” says Ajallon Zondi, a hatchery owner and DPFO committee member. “Farmers living in the same area are growing 500 chicks at the same time and then fighting for a market.
Yet if they operate as a cluster, and co-ordinate and stagger production, they could go to a local market with a steady supply of 500 chickens a week. Transport and abattoir clusters can also be formed. Clusters working together can become a business unit.”
Secure a market first
Dr Shelley Johnston, a director and consultant facilitator at the KwaZulu-Natal Poultry Institute (KZNPI), agrees.
“Too often, we see farmers producing chickens and eggs and then trying to find a market for their goods. That’s the wrong way to go about things,” she says.
“If you don’t have customers, you don’t have a business. Ask your neighbours and local shops where they source eggs and chickens from. Find out what they pay, what quantity they buy, and whether or not they’re happy with their current supplier.”
The next step to becoming a successful poultry farmer is to scout for a suitable area to farm.
“If there are too many poultry farmers in an area, the price of poultry products drops. But if there’s a shortage in the area, the price goes up. So find an area where there’s a broad range of farming activities on the go.”
Another reason to find land far from other poultry farms is to prevent the spread of airborne diseases.
“You also need to find a site with clean water, electricity, good roads, a moderate climate and close proximity to markets,” explains Johnston.
“The aspiring poultry farmer should find a niche market and go through the process of learning and expanding, and must not expect overnight success,” she advises.
While large agribusinesses benefit from economies of scale, a small-scale poultry farmers can make more money per unit because he/she often sell directly to customers.
“They may sell small volumes, but margins will be higher,” Johnston says.
She adds, however, that marketing is an active process.
“Go and look for customers. Don’t wait for them to find you.”
Manage the money carefully
Once income starts coming in from selling eggs and broilers, it is crucial to manage the finances well.
“Always have cash in the bank,” says Johnston. “The income you earn is not your profit. Don’t blow it. Put it in the bank and draw a small salary.”
She estimates that the costs associated with running a 3 000-bird broiler farm amount to R122 000/cycle. The total cost of growing these birds to six weeks, including the cost of chicks, vaccines, feed, shavings, a salary and so on, averages R41.
If the birds are sold for R60/each, the farmer will earn R148 000. This will leave enough cash to fund the next broiler cycle, plus a surplus of R26 000. This should be banked and used to buy more chicks in the next cycle.
“In this way, your business will grow, you will employ people to help, and your salary can increase,” says Johnston.
“The golden rule for new businesses is simple. The first aim is to stay in business. The second aim is to make profits!”
This article was originally published in the 3 July 2015 issue of Farmers Weekly.