Financial Planning A Means Of Managing Risks In Broiler Production

Financial Planning A Means Of Managing Risks In Broiler Production
Posted by on 24 January 2019 and filed under


Financial planning is the bottom line and should be the cornerstone of every successful poultry business. People who are in a successful poultry business, specifically broiler’s, will tell you there is a fine line between controlling variables and environmental factors combined with the knowledge of financial principles and skills to reach financial goals. These fundamental financial aspects of poultry farming will be our discussion and we will solely focus on profitability as the main component.

Many poultry businesses have come and gone over the years in Namibia. One may wonder what the reasons for one’s success may be as well as the failure of the other.

In most cases the problem is financial planning.

Especially on the broiler side many have burned their fingers. The lack of ready markets for ready to slaughter broilers is one of the leading reasons today. As we live in a world which is no longer product driven but consumer driven many farmers do not consult their customers and hear what they want. They blindly produce a broiler ready in 35 days to slaughter that they can’t sell because they did not have a ready market. Lack of cooling facilities due to availability of electricity further escalates this problem. The chicken consume its profit within a few days after its ready to slaughter and all the farmers’ efforts were for nothing. By signing contracts with customers stipulating the price, the amount of broilers and the time of delivery, can solve this problem. This gives you the knowledge of exactly the amount of finance you’re going to acquire and so limit your expenses to make maximum profits.

Proper budgeting is the next financial tool to ensure ample profits. If you plan before starting a broiler project you can know what to expect from a financial point. You can also know if you would need extra funding to keep your operation functional for the duration of the project. No one wants to realize they don’t have enough money to feed or pay for vaccination of their broilers. Some farmers go with their gut feeling with no research, training or calculations before starting the project. These are the guys who lose a lot of money. Very important: keep record of all expenses and income to ensure financial targets are reached which inevitably leads to profit. If the broiler project is not profitable then why do it?

Accurate record keeping is also part of financial planning as data collected from broilers can be used to plan ahead and reduce the chances of financial surprises later on. Data on growth weights is the most important for is is the main economic variable which effects profits the most. Other records include temperature, humidity, air speed, feed, water intake and exposure to light are indirect variables correlating to weight. Weight is directly correlated to profit. Weigh animals on a weekly basis to reduce the risk of losses.

How will I use my profits? If you decide to use your profits, always consider assets that can generate finances again such as:

  1. Extra cages to house more chicks.
  2. A vehicle to transport feed and chicks to and from the market.
  3. Avoid excess spending on things you don’t need. Reinvest and consider the next cycles cost.

You may use the profits to live with but not all should be used as personal funding.

We should not separate farming from business. Any successful farm is managed the same as a business. This entails that without good management technical and financial planning no broiler farm can function properly. Bad news is that financial planning are almost always neglected and costly for both the Namibian economy and the person farming himself.- Technology provides tools to overcome losses resulting from mismanagement we must only be willing to use it effectively and the profit will do the talking.

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