31/08/2026
🚨 FARMERS, YOUR “PROFIT” MAY BE EATING YOUR CAPITAL 🚨
Many poultry farmers focus on the profit they make from a batch of birds but overlook a critical factor: replacement cost.
Let's look at a simple example.
Suppose you purchased your Day-Old Chicks (DOCs) at ₦1,100 per chick.
At that time, your cost for 500 birds was:
500 × ₦1,100 = ₦550,000
Fast forward to today, and the price of DOCs has increased to approximately ₦1,800 per chick.
To restock the same 500 birds, you now need:
500 × ₦1,800 = ₦900,000
The Difference?
🔥 ₦350,000
That is the additional amount required just to replace the same number of birds.
Why This Matters
Many farmers make the mistake of pricing their mature birds based on what they paid months ago rather than the current cost of replacement.
As a result, they may appear profitable on paper, but when it is time to restock, they discover that their capital can no longer sustain the same production scale.
You may start with 500 birds, sell them successfully, and believe you have made a good profit.
However, when you return to the market to purchase another batch, you realize that your available capital can only buy 350–400 birds instead of 500.
In many cases, this is not because the business made a loss. It is because the business failed to preserve its replacement capital.
The Questions Every Farmer Should Ask Before Pricing Birds
Before setting a selling price, ask yourself:
✅ Can I buy the same number of DOCs again?
✅ Can I afford the feed for the next production cycle?
✅ Can I cover all other production costs?
✅ Can I start the next batch without injecting personal funds?
If your answer to any of these questions is No, then your pricing strategy may need adjustment.
Price for Sustainability, Not Emotion
Avoid pricing your birds:
❌ Based on what you paid months ago.
❌ Based on what neighboring farmers are charging.
❌ Based on emotions or desperation to sell.
Instead, price based on:
✔ Current market realities
✔ Replacement cost
✔ Production expenses
✔ Sustainable profit margins
The Key Lesson
Profit is not simply the money left in your account after sales.
True profit is what remains after you have recovered your production costs, preserved your capital, and maintained your ability to restock at the same scale.
Using the example above:
₦700 increase per DOC × 500 birds = ₦350,000
That amount can determine whether your next batch remains at 500 birds or drops significantly.
Protect Your Capital
The objective is not just to sell birds.
The objective is to:
✅ Recover your production costs
✅ Preserve your capital
✅ Earn a reasonable profit
✅ Maintain or grow your production capacity
That is the foundation of a sustainable and profitable poultry business.
Don't just calculate profit. Calculate replacement cost.
© ABILITY INTEGRATED FARM AND AGRIBUSINESS LTD (AIFA)
