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Hatchery birds are ones that are purchased either (online/phone/in person) from a hatchery (such as Murray McMurray, Nature's, Ideal, etc) or from their local feed store (which orders them in bulk from a hatchery). These are typically purchased/delivered as day old chicks, and can be vaccinated at the hatchery before you get them - although most feed stores will not pay the extra fee.
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As opposed to birds/eggs obtained from a breeder (either small time backyard, or experienced breeder. These birds/eggs will cost much more than your standard hatchery chicks and be closer to the APA/ABA Standards of Perfection. NOTE: Not all backyard breeders strive to meet the Standards. Do your research if you feel that you want to a) get involved in breeding and preserving any particular breed, or b) want to get into showing birds at county fairs / qualifying meets.
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Not all 'breeder' birds are the same - a lot of people get their start with 'hatchery quality' birds and a few generations later start selling their birds as 'breeder quality'. Meeting the APA/ABA standards requires a lot of work and knowledge of the breed - which is not something everyone is willing to do. There is nothing wrong with backyard / small time breeding - this where your research would come into play if you choose to strive to the approved standards.
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Again, not all birds from a 'breeder' will be show quality. Even those purchased from the 'big names' will likely be the ones deemed inferior for their own personal breeding programs. Unlike dogs/horses/etc. there is no concept of a 'pedigree' in poultry. Even a Grand Champion winner can produce chicks that do not meet the standards. A lot of breeds commonly available have hidden secrets in their genetics that will pop up under the right conditions. It takes time and effort to weed out the birds 'throwing' (producing in their chicks) incorrect coloring/feathers/etc.
here here! good explaination! it is important to remember that just because the bird was bred and hatched at home, or from a breeder or even the big breeders, doesn not automatically mean ( or even usually mean) it is better than a bird from cackle hatchery or myers or where ever. you have to look to the breed standards. excellent answer.