How Much Money to Start a Chicken Farm?

Last Updated: 08.12.19

 

Being your own boss and owning a chicken farm might be the dream of many people. But, apart from buying the chickens, building the best chicken egg incubator for your birds, feeding them, and providing them a safe place to live, what other additional costs should you expect?

With over 40% of the new businesses failing in the first three years, you can risk everything if you start your own chicken farm without having the knowledge and the expertise in the field. Let’s take a closer look at all the steps you have to follow in order to make your dream come true and, more importantly, let’s analyze some of the costs you need to be aware of.

 

Consider the type of business

Over the years, chicken has become the number one meat consumed in the United States of America since it is the most affordable. The country is also the largest chicken broiler producer in the world, especially thanks to five states: Alabama, Arkansas, Georgia, Mississippi, and North Carolina.

In other words, you’ll find a lot of chicken farms of all sizes and dealing with everything from egg production to meat processing and growing chickens. The real question is, what type of chicken farm business are you willing to open?

Raising chickens for their eggs seems like a suitable option for entrepreneurs with limited budgets and logistics as it costs less and the profit rates are reasonable. On the other hand, a poultry farm will require more space and investing in various machines and technologies which will dramatically increase the initial costs.

The good news is that, no matter your choice, chances are your business will be profitable, as there will never be a shortage of meat and egg consumers in this world.

How much will it cost, on average, to start a chicken farm?

Opening a business in the United States represents a good idea both for national and international investors, as there are numerous tax deductions and financing opportunities. However, establishing the initial costs of a chicken farm can vary from a few thousand dollars up to three-quarters of a million, depending on its size.

Starting a small scale poultry farm business has its advantages, especially for young and inexperienced entrepreneurs. The financial risks aren’t very high and the good thing is that you can closely verify the entire process and make sure you’re only using premium and organic feed that will add value to your final product.

Generally speaking, it will cost you anywhere between 5,000 and 25,000 dollars to begin a small scale business in the poultry industry, and this includes the costs of your employees’ salaries for the first three months of operation.

As the business grows, you’ll expect an increase in costs as well, so that a medium-sized chicken farm may end up costing up to 30 times more, including the salaries.

Finally, a large scale poultry business should also look at the costs of operating a commercial hatchery, raising different chicken breeds, and the ability to export the final products both on the local and international markets. Given these challenges, you can expect a budget of nearly two million dollars.

 

What are some of the most important costs you have to consider?

The first and most important thing you have to consider is leasing the farmland you are planning on building your business on. On average, medium-sized farmland will cost you around 200,000 dollars to lease which is, by far, the biggest investment you’ll have to make. The costs dramatically decrease if you own the land or share the lease with other investors and partners.

Secondly, you have to take into account the actual costs of purchasing everything needed for your chickens to stay healthy and productive, and that means investing in high-quality poultry feed and medication. The costs of this operation are around 35,000 dollars for a medium-sized farm.

And what about the costs of the actual birds? Depending on the chicken breeds and the number of birds, you’re looking up at around 60,000-70,000 dollars for a medium-sized chicken farm.

Paying for an expert business consultant that will help you come up with a reliable and responsible business plan is a must, especially if you’re not educated in the field of business administration. An expert’s opinion will cost around 3,000 dollars and that includes the business plan as well.

Throw in some additional 750 dollars you have to pay for the registering fee, and don’t forget about all other legal expenses necessary for obtaining permits and licenses. We’re looking at the health department license, a business license, an air and water pollution control permit, a fire department permit, and other additional accounting services, as well as the help of a professional accountant. These all add up to around 15,000-16,000 dollars more.

We’re now moving to the start-up expenses that include phone and utility deposits, as well as stationery, for which you will be paying some additional 7,000 dollars, on average.

Another extremely important thing you need to focus on is the cost of insurance as it can potentially save your business in case something goes wrong. We suggest opting for extended insurance policies that include property casualty, general liability, employees’ compensations, and theft. This premium insurance policy can cost around 30,000 dollars per year.

If you’re already starting to get dizzy at the costs, find out that you’ll have to throw in an additional generous amount of money for acquiring all necessary working tools, equipment, and store equipment. Again, depending on the size of your farm and how well-secured your location is, you’re looking at some additional 100,000 dollars at the very least.

Finally, you’ll also have to come up with a small budget for marketing campaigns and advertising your business. Consider a personal website to get in touch with potential clients, flyer printing, ad campaigns, banners, as well as an opening party for a proper debut in the business world.

Is it worth it?

No business will become successful overnight and, if you don’t put passion into it, chances are you won’t be able to deal with the stress, especially if you’re a new entrepreneur. Apart from having all business permits and licenses in order, we do consider previous experience with birds is mandatory to thrive in this field.

Keep in mind that chickens are living beings, and they need a safe and healthy environment to grow and nourish. That being said, you shouldn’t neglect their needs or rights just for the sake of profits, as this will ultimately reflect in the quality of the products you offer. Therefore, at the end of the day, it takes passion, dedication, and a pinch of luck to turn your chicken farm business into a profitable one, so we wish you good luck.

 

 

Bibliography:

1) Job Description of a chicken farmer

2) Profitable poultry farming

3) Factors That Determine the Cost to Start a Poultry Farming Business

4) Poultry farming and how it’s done

 

 

 

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