There are two schools of thought when it comes to calculating the "cost-effectiveness" of chickens as an investment.
The first I'll call the "cost-to-exchange" school of thought, in which the entire investment is compared against other viable options (in this case, buying eggs from the store). This is the frame of mind of a start-up entrepreneur, who expects a business to earn an income. This income may eventually repay its own start-up costs, when the business doubles in value (and very few small businesses do). To buy or build a coop and run, plus the cost of the birds, feed, vet treatments, etc., is quite expensive and unless a person goes into breeding and sells exotic eggs as a side business there's no way the eggs themselves will offset what a person sinks into the investment. It's completely unrealistic to expect a handful of little birds to pay for themselves, their keep, their house, and the yard they're on. Only on a very large scale can a chicken farm expect to pay for its own start-up costs.
The second approach is the "cash flow" school of thought, in which the entire investment is compared to a stock, bond, or similar portfolio investment that generates income (eggs, in the case of the chickens, which can be compared against various kinds of eggs from the grocery store). Different kinds of stocks or bonds throw off dividends or interest, but stocks and bonds are expected to produce a percentage of their value every year. Very few stocks produce enough income to pay back their purchase prices. Fewer still pay back their purchase prices and also cover the cost of the brokerage fees, computer, and Internet access needed to set up and maintain a stock portfolio.
Yet very few people say "Don't get into stocks" or "don't get into bonds".
Compared to the long-term stock market average yield of 8% per year, chickens are a fantastic investment.
- Suppose you spend $500 on a coop, run, birds, and feed for half a dozen chickens in the first year (you do like me: go cheapo on the coop, get everything second-hand, and feed the birds lots of kitchen scraps).
- 4 hens survive the first year
- The hens lay an average of 4 eggs per week apiece
- Suppose they start laying at the 24th week so you only get six months of eggs.
That's 16 eggs or 1 1/3 dozen eggs every week for twenty-six weeks, or 416 eggs (34 2/3 dozen). At a retail price of $2 a dozen you've made $69 in eggs that you would otherwise have to purchase. Sell them, eat them, it doesn't matter because it's still a 13.89% return on investment. FAR better than the stock, bond, or futures markets have been doing!
Just out of curiosity, when it comes to money why do so many of us have higher expectations of our poor little birdies than we do of our stocks, our homes, our savings bonds, our bank accounts, our start-up businesses, and other investments? If a stock or bond is good because it throws off an 8% return on the investment during a bad market, why would a chicken investment be less than good?
I say, down with the cost-to-exchange mentality...
Squeaky
The first I'll call the "cost-to-exchange" school of thought, in which the entire investment is compared against other viable options (in this case, buying eggs from the store). This is the frame of mind of a start-up entrepreneur, who expects a business to earn an income. This income may eventually repay its own start-up costs, when the business doubles in value (and very few small businesses do). To buy or build a coop and run, plus the cost of the birds, feed, vet treatments, etc., is quite expensive and unless a person goes into breeding and sells exotic eggs as a side business there's no way the eggs themselves will offset what a person sinks into the investment. It's completely unrealistic to expect a handful of little birds to pay for themselves, their keep, their house, and the yard they're on. Only on a very large scale can a chicken farm expect to pay for its own start-up costs.
The second approach is the "cash flow" school of thought, in which the entire investment is compared to a stock, bond, or similar portfolio investment that generates income (eggs, in the case of the chickens, which can be compared against various kinds of eggs from the grocery store). Different kinds of stocks or bonds throw off dividends or interest, but stocks and bonds are expected to produce a percentage of their value every year. Very few stocks produce enough income to pay back their purchase prices. Fewer still pay back their purchase prices and also cover the cost of the brokerage fees, computer, and Internet access needed to set up and maintain a stock portfolio.
Yet very few people say "Don't get into stocks" or "don't get into bonds".
Compared to the long-term stock market average yield of 8% per year, chickens are a fantastic investment.
- Suppose you spend $500 on a coop, run, birds, and feed for half a dozen chickens in the first year (you do like me: go cheapo on the coop, get everything second-hand, and feed the birds lots of kitchen scraps).
- 4 hens survive the first year
- The hens lay an average of 4 eggs per week apiece
- Suppose they start laying at the 24th week so you only get six months of eggs.
That's 16 eggs or 1 1/3 dozen eggs every week for twenty-six weeks, or 416 eggs (34 2/3 dozen). At a retail price of $2 a dozen you've made $69 in eggs that you would otherwise have to purchase. Sell them, eat them, it doesn't matter because it's still a 13.89% return on investment. FAR better than the stock, bond, or futures markets have been doing!
Just out of curiosity, when it comes to money why do so many of us have higher expectations of our poor little birdies than we do of our stocks, our homes, our savings bonds, our bank accounts, our start-up businesses, and other investments? If a stock or bond is good because it throws off an 8% return on the investment during a bad market, why would a chicken investment be less than good?
I say, down with the cost-to-exchange mentality...
Squeaky
