Economics of Micro Scale Hatcheries

[JayColli]

Hi all,

I'm establishing a spiral breeding program for Coucou de Malines and hope to be selling chicks and eggs by Spring 2019. I'll be spending the 2018 breeding season getting my parent stock in order but hope to start seeing some returns in 2019.

First of all, I would be doing this even if there was no money to be made so I won't factor in my labour, but I believe there is a bit of money in it - perhaps enough to cover the costs of my other animals and engage in a few other interesting projects so I'd like to bounce some numbers off you folks.

Before we get to the numbers I'd just like to note that the Malines is a dual purpose breed but tends to sway more towards meat than eggs in that regard so I'm anticipating many of the chicks I sell will be for the purpose of raising for meat. A nearby breeder of RIRs sold over 500 chicks this past year and almost 20-dozen hatching eggs so the local market should be fairly robust for a meaty dual purpose bird.

Base Costs:
- $365 ($36.50/adult bird - 6 hens, 3 breeding cocks and a spare cock) each year for feed based on an average daily intake of 1/3 lb. at $16/55 lb. bag of feed.
- $20.54/year on electricity to run my Hovabator 1605n 24/7 from April 1st to October 31st at 16 cents per kWh.
- $180/year on bedding based on an average of 2 bales of shavings per month at $7.50 each.
- $200/year for misc. expenses such as dusting powder, medical supplies, replacement of broken feeders/waterers, ect.
- No fuel costs as I drive past the feed mill on my daily commute and will meet buyers at said feed mill to sell chicks, which is a 30-second drive from my house.

Total: $765.54

Based on that number I'd need to sell 153 chicks at $5 each to break even.

I figure with a 60% hatch rate (hopefully that's conservative) I can average 9 hatches of 25 chicks during the season for a total of 225, which would put me at $360 in profit each year.

Of my 6 hens, I'll need each to contribute 7 eggs per hatch to be able to fill the incubator, which is the weak point in my "all-in, all-out" incubation scheme. I should be able to make up for this loss by selling hatching eggs online in-between hatches as I've seen Malines eggs routinely go for $30 or more, not including shipping.

Questions:
- For everyone out there breeding on this scale, do you go all-in, all-out when incubating or run two incubators with staggered hatching dates?
- Do you keep two hens per cock or more? Each cock will have a total of 6 or 7 hens in the pen with him but only two will be Malines since they aren't the greatest layers and I'll still need some eggs for my kitchen.

Questions, comments and corrections welcome! Here's a picture of my best hen for fun.

 

[Brahma Chicken5000]

I will be starting a breeding program in a couple of years so I’m very interested in this thread.

 

[Sydney Acres]

There's a lot to consider here, including whether there is enough of a market for this breed to sell as many chicks as you can hatch, vs the market being low for chicks but good for fertile eggs.

If you run only a single incubator in an all-in, all-out schedule, you will need to be able to sell all the eggs that are laid off-schedule. Is the market for hatching eggs there? Having two incubators gives you more flexibility of when you set eggs, or allows you to use one incubator as a hatcher. If the market for chicks is uncertain, you might consider only placing eggs in the incubator after a buyer has requested chicks.

How many hens per cock depends on your goals. IMO, it is important to have at least 6 hens per cock to keep the hens from being overused. In your situation, where you are using hens of a different breed to fill out the ranks and provide additional eggs, it is important that you can identify which eggs came from your Coucou de Malines and which eggs came from your other breed, as you don't ever want there to be a mixup when you're selling chicks or eggs. I would recommend choosing a second breed that lays a different colored egg, just to avoid mixups and really bad reviews online.

 

[junebuggena]

Another factor you need to consider is fees, licenses, and permits required for shipping chicks or hatching eggs. Different provinces have different rules and regulations. Same goes for shipping to the U.S.
If you are limited to a specific region, that will have a significant impact on how many you can realistically be expected to sell. I breed Easter Eggers, which are pretty popular, but in the summer months, it is really hard to sell chicks due to the competition from feed stores. My best time for selling chicks in the fall and winter, but that means keeping some pullets each year so that I've actually got eggs to hatch while the older hens are molting.

 

[JayColli]

@Sydney Acres - Thank you for the response! There is definitely a lot of merit in having two incubators available so there will likely be another incubator in my closet by the end of 2018. As for the market, I'm taking a bit of a leap of faith with the Malines... They're gaining popularity but are still quite rare and it's entirely possible they may not catch on and I'll be left breeding them just for the sheer enjoyment of it. I do have two small-scale pastured poultry producers that want to try them out but even if they become repeat customers they would likely only ever be ordering perhaps 4/5-dozen per year. As for the egg colour, I'll have them in with brown layers, which makes telling between the two pretty easy - see below

@junebugga - Thank you for your input as well! Canada post has regulations on how packages have to be labelled when shipping hatching eggs but no extra fees apply. I may consider shipping day-olds by special request but I'm really only looking to sell chicks locally and the extra costs for shipping day-olds would be passed on to the customer. In my province you are not considered a hatchery unless you have the capacity to incubate 1000+ eggs. I do have to report my sales to the provincial board but the levy on poultry raised for meat are paid by the owner at time of butchering, and only if they are being sold.