How to Calculate Broiler Farm Profit

Knowing whether a broiler batch is profitable requires more than looking at the money received from selling birds. Farmers need to calculate revenue and account for the complete cost of producing the flock.
A farm can have strong sales and still make little profit if feed, chicks, medication, labour, electricity, transport, and other costs are too high.
The Basic Profit Formula
The basic formula is:
Net Profit = Total Revenue − Total Costs
The challenge is identifying all relevant costs.
Calculate Revenue
Revenue is the money generated from selling birds and other products associated with the batch.
For broiler sales:
Revenue = Number of Birds Sold × Selling Price Per Bird
For example, if 95 birds are sold at ₦6,500 each:
95 × ₦6,500 = ₦617,500
Calculate Chick Cost
Chick cost is calculated using the number purchased and the price per chick.
Chick Cost = Number of Chicks Purchased × Price Per Chick
If 100 chicks cost ₦1,500 each:
100 × ₦1,500 = ₦150,000
Calculate Feed Cost
Feed is often one of the largest expenses in broiler farming.
If a farm buys:
| Feed | Bags | Price | Cost |
|---|---|---|---|
| Starter | 4 | ₦20,000 | ₦80,000 |
| Grower | 3 | ₦20,000 | ₦60,000 |
| Finisher | 5 | ₦20,000 | ₦100,000 |
| Total | 12 | — | ₦240,000 |
The actual feed cost should be based on feed purchased and, where inventory accounting is used, the portion actually consumed by the batch.
Other Farm Costs
Other expenses may include:
- Vaccines
- Medication
- Litter
- Labour
- Electricity
- Water
- Transport
- Cleaning materials
- Equipment repairs
- Disinfectants
- Processing costs
- Marketing expenses
Total Production Cost
A simplified calculation is:
Chick Cost + Feed Cost + Health Costs + Labour + Utilities + Other Expenses = Total Cost
For example:
| Expense | Amount |
|---|---|
| Chicks | ₦150,000 |
| Feed | ₦240,000 |
| Vaccination/Medication | ₦20,000 |
| Litter | ₦10,000 |
| Electricity/Water | ₦15,000 |
| Other Expenses | ₦15,000 |
| Total | ₦450,000 |
Calculate Net Profit
If revenue is ₦617,500 and total costs are ₦450,000:
₦617,500 − ₦450,000 = ₦167,500
The estimated net profit is therefore ₦167,500.
Why Mortality Matters
Suppose a farmer purchases 100 chicks but sells only 90 birds because of mortality.
If each bird sells for ₦6,500:
90 × ₦6,500 = ₦585,000
The farmer cannot calculate revenue using the original 100 birds unless all 100 are actually sold.
Profit Per Bird Sold
A simple measure is:
Profit Per Bird Sold = Net Profit ÷ Birds Sold
This can help compare different batches.
Cost Per Bird Sold
Another useful measure is:
Cost Per Bird Sold = Total Cost ÷ Birds Sold
If total cost is ₦450,000 and 90 birds are sold:
₦450,000 ÷ 90 = ₦5,000
The cost per bird sold is ₦5,000.
Break-Even Selling Price
The break-even selling price can be estimated by dividing total cost by the number of birds expected to be sold.
Break-Even Price = Total Cost ÷ Expected Birds Sold
If total cost is ₦450,000 and 90 birds are expected to be sold:
₦450,000 ÷ 90 = ₦5,000
Selling below this price would result in a loss under these assumptions.
Why Feed Price Matters
A change in feed price can significantly affect profitability.
Farmers should monitor the price of feed before starting a batch and should avoid assuming that today's feed price will remain unchanged for the entire production cycle.
Why Selling Price Matters
Market price is equally important. A flock can perform well biologically but produce disappointing financial results if birds are sold at an unexpectedly low price.
Farmers should research the market before placing a large batch.
Do Not Ignore Hidden Costs
Small expenses can accumulate.
Examples include:
- Transport fares
- Phone calls
- Water purchases
- Cleaning products
- Repairs
- Casual labour
- Market fees
- Loading costs
Recording these costs produces a more realistic profit figure.
Profit Planning Before Starting a Batch
Before purchasing chicks, create a simple budget.
| Planning Item | Estimated Amount |
|---|---|
| Number of chicks | 100 |
| Expected mortality | Farm estimate |
| Expected birds sold | Farm estimate |
| Expected selling price | Market estimate |
| Expected revenue | Calculate |
| Expected total cost | Calculate |
| Expected profit | Revenue − Cost |
Actual vs Planned Profit
After the batch is sold, compare the original budget with actual results.
For example:
- Planned feed cost vs actual feed cost
- Planned mortality vs actual mortality
- Planned selling price vs actual selling price
- Planned birds sold vs actual birds sold
- Planned profit vs actual profit
This comparison helps improve future batches.
Final Thoughts
Profit calculation should be based on actual business numbers rather than assumptions.
Track chicks, feed, health costs, labour, utilities, mortality, birds sold, selling price, revenue, and all other significant expenses.
A farmer who knows the true cost of producing each marketable bird can make better decisions about feed purchasing, flock size, selling dates, and market prices.
Continue your farm planning
Use the practical guides to build your management routine, or test your own flock numbers with the free calculators.
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