From 15,000 Chickens to 267,720 Pesos in Profit: What a Second Poultry Cycle Revealed
From 15,000 Chickens to 267,720 Pesos in Profit: What a Second Poultry Cycle Revealed
Running a contract poultry farm is a numbers-driven business. The operator provides the facilities, labor, utilities, and day-to-day management, while a larger integrator supplies the chicks, handles the feed, and ultimately collects the grown birds. Payment depends heavily on how efficiently the farm turns those chicks into healthy, marketable chickens.
A second 15,000-bird production cycle revealed meaningful improvements in mortality, harvest recovery, feed efficiency, and profitability. At the same time, weaker weight gain, uneven bird sizes, recurring equipment repairs, and the difference between accounting profit and actual cash flow showed where further improvements were needed.
How the Contract-Growing Model Works
A contract grower does not buy chickens to sell independently. Instead, an integrator supplies the chicks and later collects the grown birds.
The farm’s job is to raise them efficiently. The main performance indicators are:
– Harvest recovery: How many birds survive and are ultimately harvested.
– Average live weight (ALW): The average weight of the chickens at harvest.
– Feed conversion ratio (FCR): How efficiently the birds convert feed into body weight.
These metrics determine the grower’s performance and, ultimately, the fee received for the cycle.
Starting With 15,000 Chicks
The second cycle began with 15,000 chicks. Of those, 23 arrived dead on arrival (DOA), while another 21 were rejected before the cycle began because they showed weakness, injuries, physical abnormalities, or other signs that suggested they were unlikely to survive.
The first major operational focus was therefore mortality.
Temperature Management Made a Major Difference
The farm is open-sided, with tarp siding protecting the interior from outside conditions. That means outdoor temperature changes can have a significant effect on the environment inside.
During the first few days, temperature stability is especially important. Poor environmental management can contribute to uneven growth and long-term uniformity problems.
The improved approach was to use brooding lamps and heaters more proactively, adjusting them according to outside conditions. If nighttime temperatures dropped significantly, heating needed to be increased. When daytime temperatures naturally reached the desired level, heating could be reduced.
The objective was not simply to reach a target temperature once. It was to minimize fluctuations and maintain a consistent environment.
The results were significant.
During week one, mortality was 163 chicks—288 fewer than during the first cycle. Week two recorded another 137 deaths, representing roughly a 50% reduction compared with the previous cycle.
By day 31, total mortality stood at 593 chickens, approximately 4% of the starting population. That represented about a 43% reduction in mortality compared with the first cycle.
The lesson was straightforward: consistency in environmental management can have a substantial effect on survival.
Better Survival, But Weight Gain Was Still a Problem
Mortality improved dramatically, but the second cycle was not perfect.
Average live weight consistently lagged the desired level during much of the production cycle. Uniformity problems also began appearing from around week two onward, meaning the birds were not growing at sufficiently similar rates.
Interestingly, the first cycle’s recorded weights may have looked better partly because its sampling process was flawed.
Accurate sample weighing requires birds to be selected from different areas of the farm so the sample represents the entire population. When uniformity is poor, larger birds can be easier to catch, causing samples to overrepresent them and artificially inflate the average.
The nursery also needs to be considered. If a significant number of smaller birds are concentrated there and excluded from the sample, the calculated average live weight can be considerably higher than the true population average.
Even after accounting for those measurement issues, however, the second cycle still had genuine weight-growth challenges.
The Importance of Consistent Daily Management
Poultry growing involves many repetitive tasks, and small inconsistencies can accumulate.
Daily responsibilities included hourly walkthroughs to keep birds active, managing rice hull, filling manual feed trays, and loading feed into the auger in the morning and evening.
A feed tray that remains empty for longer than others might seem like a minor operational issue. Across an entire cycle, however, uneven access to feed can contribute to uneven growth.
The same principle applies to environmental management. If one part of the farm receives different treatment from another, the resulting variation can eventually show up in bird size.
By the third week, the situation improved substantially. Average daily gain more than doubled going into week three, and by week four the overall weight was considered much more satisfactory.
The experience highlighted an important operational principle: uniformity is not created by one major intervention. It comes from performing many small tasks consistently throughout the entire cycle.
Thinning Helped Address Uneven Bird Sizes
Because uniformity remained an issue, a thinning was carried out on day 28.
Thinning means harvesting a portion of the birds before the final harvest. The larger birds that had already reached an appropriate weight were removed, creating additional space for smaller birds to continue growing.
This approach serves two purposes:
1. Harvest birds that are already at an acceptable weight.
2. Give undersized birds additional space and time to reach the required threshold.
The day-28 thinning removed 2,572 chickens at an average live weight of 1.38 kilograms.
With only three days remaining, the focus shifted toward the smallest birds, particularly those that needed to reach the minimum threshold of 900 grams.
Harvest Results: 14,330 Birds Recovered
The final harvest took place on day 31, with five trucks scheduled to clear the remaining birds.
The harvest figures were:
– Truck 2: 2,568 chickens at 1.52 kg average live weight
– Truck 3: 2,570 chickens at 1.18 kg
– Truck 4: 2,565 chickens at 1.36 kg
– Truck 5: 2,565 chickens at 1.50 kg
– Final truck: 1,490 chickens at 1.40 kg
The final truck typically contains fewer birds because its purpose is to clear the remaining population rather than fill the truck to capacity.
Across the harvest, 14,330 chickens were recovered, producing a 96% harvest recovery rate and an overall average live weight of 1.39 kilograms.
Harvest recovery improved by 842 chickens compared with the previous cycle, although average live weight was lower.
The Biggest Improvement Was Uniformity
On harvest day, 14,363 chickens were alive and theoretically available for harvesting. Yet only 14,330 were actually harvested because some birds did not meet the required weight threshold.
This represented a major improvement over the first cycle.
The previous cycle had left more than 400 chickens behind because of extremely poor uniformity. The second cycle had significantly fewer birds that failed to meet the harvest requirements.
That became a central operational objective: rather than simply maximizing the size of the largest birds, the goal was to get as many chickens as possible into a harvestable condition.
Investigating an Unexpected Harvest Result
One result stood out: the third truck averaged only 1.18 kilograms, noticeably below the other trucks.
Normally, lower-weight birds are expected toward the end of the harvest because the final trucks contain many of the undersized chickens. Seeing such a low average on the third truck was therefore unexpected.
The result prompted an investigation into the downstream supply chain. The processing operation was reviewed to better understand how trucks and drivers were monitored and how the birds were handled after leaving the farm.
No evidence was established that anything improper had occurred. However, the incident illustrated a broader business lesson: unexpected results should be investigated rather than immediately accepted or dismissed.
Any supply chain contains points where incentives may differ between participants. Understanding who controls each stage, how quantities are recorded, and where discrepancies can arise is important for any business dependent on third-party logistics.
Feed Conversion Ratio Improved From 1.70 to 1.58
The next major performance metric was feed conversion ratio, or FCR.
FCR measures how much feed is required to produce a given amount of chicken weight. In simple terms:
FCR = weight of feed consumed ÷ weight of chickens harvested
The cycle used 630 bags of feed and harvested 14,330 chickens at an average live weight of 1.39 kg. The resulting FCR was 1.58.
For context, an FCR around 1.5 is considered good within this operation. The previous cycle recorded an FCR of 1.70.
A reduction of 0.12 may appear small numerically, but it is financially meaningful because each hundredth of a point can affect the grower’s fee.
Improving feed efficiency therefore became one of the strongest contributors to better economics in the second cycle.
The Farm’s Operating Expenses
Because the integrator supplies and pays for the chicks and feed, those items do not appear as ordinary operating expenses on the grower’s income statement. They are instead deducted from the grower’s fee arrangement.
The farm’s operating expenses for the cycle were:
Expense| Cost
Utilities| 50,000 pesos
Wi-Fi| 2,500 pesos
Payroll| 25,000 pesos
Gas| 75,000 pesos
Rice hull| 5,500 pesos
Chick paper| 1,000 pesos
Harvesting labor| 10,000 pesos
Cleaning labor and supplies| 18,000 pesos
Repairs and maintenance| 25,000 pesos
Other expenses| 4,000 pesos
Total operating expenses| 219,500 pesos
Gas was the largest expense at 75,000 pesos. Usage was particularly high, partly because of a gas leak that was subsequently identified and resolved.
Repairs and maintenance were another recurring burden. During the cycle, work included repairing a large tear in the farm’s side, repairing a fan, and repairing the motor on the automatic feeding line for approximately the third time.
An older farm naturally requires ongoing maintenance, making repairs a recurring part of the business rather than an unusual event.
Revenue Increased to More Than 487,000 Pesos
Despite the weaker average live weight, improved overall performance increased revenue.
The grower received a fee of 34 pesos per harvested bird.
With 14,330 chickens harvested:
14,330 × 34 pesos = 487,220 pesos
That produced more than 487,000 pesos in top-line revenue.
After deducting the 219,500 pesos in operating expenses, the cycle produced an earnings-before-tax figure referred to here as net profit of 267,720 pesos.
The improvement in profitability was therefore driven primarily by better operating performance rather than a major reduction in expenses.
Profit Is Not the Same as Cash in the Bank
One important financial distinction is the difference between operating profitability and actual cash available.
The income statement measures whether the core operation generated a profit. It does not necessarily show every movement of cash.
Large one-time capital expenditures, for example, may not appear as ordinary operating expenses on the income statement. After the cycle, the farm invested in items including a bathroom and new heaters. Those purchases reduced available cash but were separate from the operating expenses used to calculate the cycle’s profitability.
This distinction matters because a farm can report a profitable production cycle while simultaneously reinvesting substantial amounts of cash into equipment, repairs, and infrastructure.
For a developing operation, that reinvestment can be necessary to improve the farm’s condition and operational reliability.
What the Second Cycle Revealed
The second cycle showed clear progress, but it also demonstrated that poultry farming is a continuous optimization process.
The strongest improvements came from:
– Reducing mortality from the previous cycle.
– Improving environmental consistency.
– Increasing harvest recovery by 842 chickens.
– Reducing the FCR from 1.70 to 1.58.
– Improving uniformity and reducing the number of birds left behind.
– Increasing revenue to 487,220 pesos.
– Generating 267,720 pesos in operating profit after 219,500 pesos of expenses.
At the same time, average live weight remained an area for improvement, and the aging farm continued to require repairs and reinvestment.
The broader lesson is that profitability in a production business rarely depends on a single dramatic improvement. It comes from controlling the environment, maintaining consistency, reducing waste, improving efficiency, monitoring the supply chain, and turning operational improvements into measurable financial results. In this cycle, better execution translated directly into stronger harvest recovery, better feed efficiency, and ultimately higher profitability.
Author: Fernandez Alexandra
Am a blog write