What are expenses?
Poultry farming expenses is when money is paid out by your farm in exchange for a product or service needed for operational purpose.
Expenses are also called costs of goods sold (COGS).
Understanding expenses
Cost of goods sold is a direct result of selling poultry product, either eggs or chicken carcass.
These are the kind of expenses that have nothing to do with administration but rather rearing flocks.
Unavoidable (in a word).
Chickens need to eat, drink and to be kept healthy.
Everything that is directly linked to:
- providing input for the chicken’s care, or;
- preparing poultry product for sale
…is the cost of goods sold.
You simply couldn’t sell your goods without incurring these types of cost.
Example
Best practice
Here is a list of typical expenses of a poultry farm.
- Day-old chicks
- Feed
- Processing
Cost of good sold or expenses, much like pricing of your poultry products is variable.
These figures change as the economic climate changes.
As your suppliers adjust their pricing,
This in turn changes your cost of goods sold.
In response, you may choose (or not) to alter your egg or chicken carcass prices to maintain your profit margin.
Expenses may also vary based on economies of scale offered within your transaction.
- Volume of supplies bought
- Full or partial payment
- Frequency of purchase
…are all factors which can influence the level of pricing offered by your suppliers.