How To Calculate Poultry Farm Break Even (The Easy Way)

Are you looking for a user-friendly online calculator for determining your poultry farm breakeven point?

Calculating poultry farm breakeven

Breakeven point is the exact theoretical loci at which your operational costs and revenue intersect.

It’s the numerical coordinate or point at which your costs of production vs. sales revenue are equal and your net (overall) position is neither a loss (losing money) nor profit (gaining).

Breakeven is usually expressed in terms of – ¹units sold, at a ²particular price.

The narrative supporting those figures is:

To completely cover the cost of production, but no more, I would need to sell (X) eggs/carcasses at (X) price.

The mathematical equation looks like this:

Break-Even Point (units) = Fixed Costs ÷ (Sales price per unit – Variable costs per unit)

Breakeven helps business owners set their lower limits of commercial tolerance.

It provides evidence-based rationale for setting your boundaries or pricing and production volume.

And also gives you a more tangible feel for the impact of cost turbulence on the output demand of your enterprise.

Breaking even with poultry farming

When scenario planning in poultry, as with life, the only constant is – change.

Cost of inputs, most famously feed and energy prices, for example, experience marked volatility as per usual.

We regularly witness the price fetched for domestic outputs affected by oversupply through interference from cheaper imports in many markets.

And therefore it’s imperative, with such economic pressures, to have an instrument for kicking the tires on your numbers.

And being clear in your mind at what level you win, lose or draw.

Why it’s important to calculate your break even as a poultry entrepreneur

Breakeven allows you to pin down the exact price that a certain number of units sold cover all costs…

…below which you lose money and above which you make money.

Without your eyes on this prize, so to speak, you have no firm grounding to lead your decision-making on setting production and sales/revenue goals.

Faulty assumptions on profitability sink businesses daily.

So, establishing your breakeven point helps set a clear trajectory for the commercial success of your poultry farm.

Example layer poultry farm breakeven comparison

Graph showing breakeven comparison between Cage, Indoor, Free-range and Organic layer poultry models

Summary of the profit comparisons from the graph above

–european-poultry-science.com

Take away points:

Such an exercise as the one above helps early poultry entrepreneurs:

• Examine cost/benefit pros and cons of various layer production models
• Choose the most appropriate production model for their project
• Understand the relationship between cost, sales volume and price for various egg products

Limitations:

• The example was based in Croatia – each market’s dynamics must be uniquely considered
• No two poultry farms nor owners are the same – this example would produce identical results, if replicated

Methods for calculating poultry farm breakeven

When calculating your breakeven as a poultry entrepreneur, I recommend one of the methods below:

1. Manual breakeven spreadsheet exercise

Steps

1. Itemise all fixed costs in running your poultry farm
2. Itemise all variable costs in running your poultry farm
3. Manipulate equation to algebraically determine the volume and price level to breakeven

2. Try The Poultry Farm Break Even Calculator & Template

Using this easy fill-in-the-blanks form, calculate your poultry project breakeven in minutes – no sweat. The app will email you the data after each use:

 

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