Starting a Hatchery

[TwinWillowAcres]

How feasible do you think it would be to start a hatchery? I figured 10-15 popular breeds plus up to 5 rare breeds. Then expanding from there.

I can build an 18x20 barn for around $800, so I can start small with 1-2 of those for different pens and then expanding it to one barn per breed. Maybe I should buy a plot of land just for the chickens

I mix my own chicken feed, it costs me about $2.50 to raise a chick from hatch to 20 weeks. It costs me about $20 to feed a hen from 20 to 70 weeks. So I can feed my hens very cheaply.

I figured 5 hens and a rooster per breed will give me 780 eggs (7 days a week x 70% lay rate x 32 weeks [Feb-Sept]), but with an 80% hatch rate, I will get about 620 chicks. Cull out 10% that are too small, weak, etc, and I'm left with 560 chicks to sell from five hens. I would sell them straight run (except for autosexing breeds) for $2.40 each, that is $1,340 per flock of five hens for one year.

And of course hatching equipment, brooding equipment, etc, as well as housing and labor would count off profit. Also marketing, advertising, etc.

Let's say I start out with 25 hens (five breeds), what kind of hatcher/incubator would you recommend? Needing to set 120-240 eggs every 1-2 weeks.

What do you guys think?

 

[mortie]

There will probably be some laws involved depending on your state, you may have to be NPIP certified or something...I would look into all those aspects Also I'm not sure where you live but where I live, people really only buy chicks at certain times of the year and it's not even remotely feasible to ship them in the off season. That may not be a factor for you, but just another thing to think about.

Good luck, whatever you decide to do!

 

[enola]

Spring and summer will be your peak season for selling chicks. The rest of the year you will be eating a lot of eggs.

 

[TwinWillowAcres]

Here's my budget. Let me know if you think this is feasible or not.

Receipts
Chicks - 25 hens x 70% lay rate x 7 days x 32 weeks [Feb-Sept] x 90% hatch rate x 75% sale rate = 2650 x $2.40 each = $6360.00
Chick mortality/cull = 15%; remaining 10% sold at auction for $1 each = 350 chicks = $350.00
Non hatching eggs - 25 hens x 70% lay rate x 7 days x 16 weeks [Oct-Jan] = 160 dozen x $2.40 each = $384.00
Year old cull hens - 22 hens x $5 each = $110.00
Young cockerels - 5 cockerels x $3 each = $15.00
Total receipts $7219.00

Variable Costs
Pullets - 30 pullets x $5.75 = $172.50
Cockerels - 10 cockerels x $5.75 = $57.50
Feed - 27 cwt x $18/cwt = $486.00
Bedding - 30 bales x $3 each = $90.00
Auto, truck, misc. supplies - $33.00
Repairs and maintenance - $10.00
Advertising - $120.00
Marketing - $25.00
Egg carton and packaging - 160 dozen x $0.35/dozen = $56.00
Total variable costs $1050.00

Returns above variable costs $6169.00

Fixed Costs
Building - $800 / 10 years = $80/year
Equipment - $300 / 10 years = $30/year
Incubators/Hatchers (two sportsman incubators, one hatcher) - $2412.95 / 10 years = $241.295/year
Total fixed costs $351.30

Total costs $1401.30

Net returns $5817.70
Per hen $232.71 per week $3.32/hen/week

Anything I'm missing?? NOTE: I did not include utilities (electricity, water, etc) because I am living with my parents and they do not ask for utility money for my livestock. The two incubators and hatcher will be using 975 watts. Current electricity price is $0.06577/kwh, so I calculate it to be around $350 to operate the incubators and hatchers for 32 weeks. Plus 14 hours of light (minus the minimum of 8 hours of sunlight a day the light doesn't need to be on) x 70 weeks to encourage egg production with (let's be on the safe side) two 40 watt bulbs = 0.08 kW = $240. So $590 will cover electricity expenses. (Maybe just pay $700 annually for electricity to cover anything I missed in my calculations, ie turning the water on, increase in electricity, etc.) Brooder electricity to raise the pullets is included in the cost to raise them.

 

[enola]

How many labor hours are you figuring into the income?

 

[WalnutHill]

I think your hatch rates are pretty ambitious, and you're not taking into account developing your breeding flock. Your plan looks reasonable for the chicken equivalent of a puppy mill, but not for high quality birds that will bring buyers year after year.

Unless you are in a really hot market or selling broilers or boutique birds, selling 100 chicks a week for 8 months could be tough. You may find it more feasible to offer chicks Feb-May, and table eggs the rest of the year. Or at least set only a percentage of the eggs and sell the rest.

I have 275 layers in production so while demand is high, I run short of eggs, when demand ebbs, I have more eggs than I know what to do with.

 

[enola]

And you need a plan for chicks that don't sell.

 

[TwinWillowAcres]

Sorry I haven't gotten back to you guys sooner, I've been preparing for a poultry swap

As far as your questions...

@enola - I figure 30 minutes a day to feed and water, collect eggs, check incubation, etc x $10/hour (above minimum wage) = $35/week = $1,820 a year. I don't usually like counting labor as it doesn't really make that much of an impact on my day. I'm outside with my other critters anyway. As far as my time usage, I figure 10 minutes a day to feed and water (I plan on having automatic waterers and more than enough feeders to reduce my need to fill up/top off to every 36-48 hours) and 20 minutes for the egg tasks.

@WalnutHill - I am not interested in producing show poultry. I am interested in producing healthy, productive birds of specific breeds that look and produce what the breed is noted for (ie: RIRs that lay 260+ large brown eggs a year). I believe healthy birds is a form of quality, not just how they look. I've never been interested in show anything. Function over form. I'm more interested in the commercial/business aspects: can the output of this animal pay for its inputs? (BTW I had a dog that we got as a puppy from a pet store--he lived to be over 16 years old )

@enola - We have a livestock auction on Tuesdays and a small animal/poultry auction on Thursdays. I was thinking of hatching the birds on Mondays/Tuesdays and selling the extras on Thursdays at that auction. Everything is always sold. So even if I can make $0.50 to $1 per chick I think it will still look okay.

 

[WalnutHill]

You've depreciated your building and equipment costs over ten years. There is no budget for repairs, upgrades, or what happens if you decide it isn't feasible and close up or move before the ten years is up.

I am not trying to discourage you, but I don't think your business plan would pass muster at a bank if you were looking for a loan. What do your parents think of your plan, since everything is keyed on their sponsorship?

 

[TwinWillowAcres]

I wouldn't need a loan, I would be paying for everything out of my own pocket. I work full time so it will be a couple months before I save up enough to start (I'm also paying for my full time tuition for community college). My parents wouldn't contribute anything, except a small tract of land (they already let me use 1.5 acres for my sheep) and a section of the basement or garage for incubating chicks. I would be paying them back for utilities if they so request it. I am however raising started pullets for resale and I make a nice return off of that (sheepandchicken.com) -- so that also goes back into my business to expand.

Thanks for the input. It is helping me to look harder at the hatchery business. Maybe I'm just being naive or hopeful, but with our building, we haven't had to repair it in 3 years. Same with our sheds we built--nada in 6 years. However, it does have a canvas roof which likely will need replacing every so often. I overlooked that.