Economics of broiler production

MOST PEOPLE LOGICALLY assume that birds show improved performance with increased space, but it is the enhanced environment that should automatically arise from greater available space which is the crucially important factor.

 

The contemporary broiler house permits poultry producers to exert greater control over the house environment, and birds can be placed at higher densities provided correct environmental conditions (temperature, ventilation, humidity) are provided. Key factors for consideration when determining stocking density are bird size, feeder space, drinker space, house dimensions, bird welfare, nutrition, breed, performance and expected economic return.

Overall aim and ultimate goal is to produce as many kg of chicken per square metre while at the same time avoiding any production loss due to overcrowding. As a general rule most producers will have to compromise and settle for slightly decreased performance in order to achieve and receive a satisfactory economic return. Broiler welfare is the main concern when increased stocking density is contemplated. Animal welfare groups request that broilers be given more space during grow-out citing behavioural and physiological stress as reasons for required extra space. How to determine stocking density There are various ways to calculate and determine stocking density of broiler birds. One way is to use the number of birds per unit area or the amount of area per bird, so, for example, broilers could be placed at 0.063, 0.065 or 0.070 square metres per bird.

More commonly most companies will calculate stocking density by the kg so instead of expressing as number of birds per unit area, stocking density is calculated as bird weight per unit area. Industry observers claim the benefit of using bird weight per unit area is that the standards are consistent and will stand true no matter how heavy is the target weight of the flock, depending on breed etc. Therefore once a company has calculated how many kg per square metre are required to optimise the flock’s growth, development, feed conversion, livability, and economic return, they can simply reduce the number of birds per house as the target weight increases.

That said irrespective of which method is used to determine and document stock density the factors and issues prevailing are essentially the same. Studies on stocking density The contemporary broiler does not appear to deal and cope with stress in the same way as birds traditionally grown in the past. Ongoing studies on stocking density studies usually demonstrate that contemporary broilers will perform better when provided with more space. Be that as it may, such studies are sometimes inconclusive due to the numerous factors, previously listed, which govern performance.

Moreover broiler producers cannot afford to use stocking densities of 0.093 or 0.186 square metres per bird Broiler welfare is the main concern because they would not get a satisfactory return and consequently there would be insufficient birds for processing by the industry. Stocking density studies on broiler flocks and production systems have not yielded consistent results and therefore not allowed scientists to establish rock solid conclusions. Some trials demonstrate large benefits through reductions in stocking density while others show virtually no differences.

For instance one conducted 15 years ago in North America focussed on densities of 0.074, 0.084 or 0.093 square metres per bird and found body weight, feed conversion, mortality, carcass scratches and breast meat yield were greatly improved as the birds were afforded more space. A subsequent study showed that live body and carcass weights fell when stocking density was reduced, although bird uniformity improved with the higher stocking densities. This particular research showed no effect on mortality, breast meat yield, carcass grade, incidence of scratches, or carcass quality from changes in stocking density.

It was concluded that high yield per unit area and good carcass quality can realistically be achieved with increased stocking density provided adequate house ventilation was installed. Effect and impact of correct and proper house environment conditionson broiler production at higher stocking densities cannot be over-emphasised say scientists.

Just five years ago a team of United Kingdom poultry scientists established wide ranging research in which effect of stocking density on broiler welfare was studied at a wide range of densities across 10 different poultry companies. The range of stocking density compared was 30, 34, 38, 42, and 46 kg per square metre. In addition to recording environmental conditions in the broiler house, including temperature, relative humidity, ammonia concentration, light intensity, and litter moisture content, they monitored bird welfare through mortality, level of the stress hormone corticosteroid and behaviour and health with a focus on leg structure, strength and walking ability. Higher stocking densities caused slower bird growth and more jostling with reduced walking ability.

While stocking density significantly affected these three measured variables, environmental management affected no less than 17 of the 19 variables that were measured. The researchers concluded stocking density does affect broiler welfare but that management of the broiler house environment is more important. Stocking density clearly affects broiler performance and welfare but this research indicates that housing environment is extremely important too.

These and other studies show that it is entirely possible to place broilers at higher densities as long as a keen eye is kept on broiler environmental management, because this is crucial to optimizing broiler performance and welfare. Hard economics Stocking density and bird welfare apart, broiler production continues to be driven by hard economics. Put in its crudest and starkest terms broiler production profitability is the economic value of the end product minus the input cost of its production.

The end product can be viewed as live birds ex farm, eviscerated whole carcasses, portioned meat products or value-added chicken products. The first three can be directly related to feed costs while value added chicken products can only be judged against a different set of input values, due to the extra costs involved and much higher money value obtained for the product. End product value is directly affected by supply and demand in meat industries and as a general rule economic return on portioned products will be greater than that from whole birds, although this in turn may be hugely dependent on local market requirements.

Feed is the life giver for broilers but as the major component of input cost (accounting for up to 70% of the total production cost) it is also the ‘killer’ of sound broiler production economics. As such any review of input costs and broiler production profitability must include a feed costs review as the main and key component of the exercise. Moreover it is essential to optimise nutrition of broilers from both biological performance and economic standpoints.

When confronted with escalating feed ingredient prices and spiralling feed costs, the broiler producer’s first instinct is to look at ways of off-setting the financial impact on his/her business by lowering the nutrient specification of the feed, in order to reduce cost per tonne of feed. But before embarking on this course of action it is essential to evaluate full potential impact of such a decision on margin over feeding cost, because the wish to minimise feed cost per tonne must be balanced against maintaining or maximising profit margin.

Feed specification and performance Much research has been carried out to demonstrate the effect of feed specification on biological and economic performance of broiler flocks. For example research conducted by Aviagen in 2006 studied as-hatched broilers grown to 42 days of age on two diets of different nutrient densities and assessed for them for physical (biological) and financial (economic) performance. The lower nutrient density had 90% of the balanced protein levels relative to the control and 100% of current standard recommendation. Aviagen says the term 'Balanced Protein' refers to the practical application of the ideal amino acid profile to supply broilers with the correct minimum levels of essential and non-essential amino acids for optimum growth and development.

While feed cost per bird was reduced by offering the diet that was lower in balanced protein, so too were farm performance and margin irrespective of whether they were expressed per bird or per kg. Conclusion reached was that reducing nutrient levels can lower feed cost but can simultaneously reduce margin. Crucially the lower nutrient density diet was less cost-effective when expressed per kg live-weight of broiler bird, which is clearly very important to remember when formulating feeds to maximise margin. Looking at margins

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