Establishing a viable poultry enterprise

For many years, poultry production has been dominated by a few, extremely large, vertically integrated organisations, operating with extensive infrastructure, enormous volumes and subsequent economies of scale. This has enabled these organisations to produce a product very cost efficiently, making it virtually impossible for a smaller competitor to successfully compete in the same marketplace.

An increase in consumer awareness brings opportunities

However, there has been increasing interest in the welfare of chickens and other poultry grown under intensive systems, and the health issues, both real and perceived, of food produced under these same systems. This has led to an increase in consumer awareness of these issues, and an increase in demand for poultry products grown under non-intensive conditions. The proliferation of ‘free-range’ and ‘organic’ product available on supermarket shelves bears mute testimony to this change in attitude toward poultry products, particularly eggs and meat.

For this reason, an opportunity exists for those with a pioneering spirit to establish a non-intensive poultry operation, but only after careful consideration of a number of crucial factors that will determine the viability (or otherwise) of such an operation.

In this article we will look at the various different types of non-intensive poultry operations that could be established, and discuss the broad issues that affect them.

Will a poultry enterprise have an impact on the overall viability of your farm?

Before embarking on a discourse focusing on poultry alone, it is important to remember that a poultry operation can be an enormous benefit to a farming or grazing operation, from an agronomic and soil health perspective. Any student of permaculture will know the necessity of poultry to a successful operation, and these principles apply to agriculture on a broader scale.

By careful and sensitive management, poultry can be used to lift nutrient levels, biological activity and diversity and humus in the soil, whilst contributing to greater plant diversity and plant health to pastures. These benefits are then passed on to the other livestock or crops on the farm, reducing the need for other inputs (e.g. fertilizers, herbicides etc.) and improving profitability. Every time you take delivery of a load of chicken feed, you can imagine a load of fertilizer!  What an enormous difference in attitude from the intensive producer, who has long viewed the manure and litter produced on the farm as a waste product, and has even paid to have it removed!

These are important factors to consider when evaluating the viable scale of an operation, because in some cases, a small, barely profitable operation may contribute to the overall viability of the farm.

So what about poultry, what to get involved in?

Most people will recognise chicken eggs and meat as potential products, but there are also the other species, turkeys, ducks, geese and game birds (quail, partridge and pheasant).

As we look briefly at each of these species, it is very important to remember two vital points.

First – there is no way of viably competing with the large, vertical integrators in their established, intensive market place.

Second – there is no point producing anything unless you can sell it.

Therefore, consider how your proposed product can be readily differentiated from the conventional product, and what, where, who and how many is your potential market, and what is your ability to supply. The importance of these two points cannot be overstated, and they should be clearly and frankly addressed before pursuing your plans any further.

Chicken eggs and meat are the most popular poultry products in this country, and represent over 90% of poultry product consumed. This figure is significantly assisted by fast food products, which is currently increasing the per capita consumption of chicken products, particularly meat, in Australia. The vast majority of this product is intensively produced, however, the percentage of non-intensively produced is increasing every year, as consumers become increasingly aware of what they are eating and make purchasing decisions based on health and/or ethical grounds.

Egg Production

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Non-intensive egg production falls into three ‘broad’ categories: barn, free-range and organic. Presently, there is still a significant amount of confusion and suspicion associated with these terms, and this has only served to stifle the market from growing to its full potential.

However, whilst ever this confusion exists, and the various controlling bodies struggle to clarify and standardize the different classifications of product, the onus will be on the producer to describe to the consumer the way in which the product is produced and to clearly differentiate their product by distinctive branding. In this way the producer not only provides the consumer with the information they need to make an informed choice, they also consolidate the position of their product and brand in the marketplace, by becoming accountable to the customer, and in doing so, gain their confidence.

These three types of egg production systems provide the consumer with an alternative to intensive, cage-laid eggs, and can be described as follows:

Barn – where the laying hens are run in houses without access to the outside, but free to roam around on the floor of the shed and lay their eggs in the next boxes provided. Feed and water is provided in the shed. In larger operations, which accounts for nearly all barn eggs on the market, egg collection is automated to some degree, as is the feeding.  The only real difference that barn production provides over caged production is the fact that the birds aren’t housed in cages. However, there are some ‘barn’ operations incorporating enclosed forage areas, sometimes referred to as “winter gardens”.

Free-range – in this system the laying hens have access to a house or shed in which to lay their eggs and roost during the night, and are provided with outside areas or ‘runs’ in which to wander and forage. Free-range is supposed to provide the birds with an environment as close as possible to an ‘ideal’ in terms of freedom and behavioral expression, however, many large free-range operations have the hens running on bare earth runs, providing little more than extra space to roam around. Egg collection and feeding can be either manual, semi or fully automated, depending on the scale of the free range operation and capital expenditure.

Organic – the system that should produce the ideal product, and sometimes it does.  Sadly, however, there is still a great deal of confusion concerning organic produce, and consumer ignorance is still alarmingly high. Simply because a product is labeled ‘organic’ doesn’t mean that it is, only those products that carry an organic certification are those which are produced to strict, organic standards. Without going into too much detail (as the subject of organic certification is the topic for an article in its own right), for any chicken or poultry product to be certified organic, it must be grown on certified land, fed certified food and grown under certified conditions. All these factors are independently audited, to ensure that producers are conforming to their certification standards.

Chicken meat production

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Chicken meat production, excluding intensive, can be described by two general terms: free range and organic.

Broadly speaking, a free-range meat chicken (broiler) can be produced in any reasonable shed that provides access to an appropriately sized outside run. Certification guidelines are relatively loose regarding the management of these runs, which means, just as with free-range eggs, very soon a large part of the run can become denuded of grass and reduced to bare dirt. When this occurs, the birds are not inclined to forage far or often, (particularly given the fast weight gain of modern broiler strains). They are still fed exactly the same feed as conventional chicken, unless otherwise stipulated on the packaging.

Certified organic broiler producers have relatively tighter guidelines on stocking density and sustainable run management, and their birds are only fed organically certified feed.

Other Types of Poultry

The foregoing has concentrated solely on chickens, what about the other types of poultry?

Turkeys

Turkeys are a table bird with a tremendous growth rate and eating quality, but are still considered a ‘special occasions’ meat by many Australians. This is changing, as the large, intensive producers try imaginative ways of processing and presenting turkey products, increasing their appeal and availability as a ‘main stream’ meat product. The situation for turkeys is the same for chickens, in that the conventional industry is dominated by a few large integrators who, with few exceptions, control the market. To try and penetrate this market would be foolhardy, however, there are some alternatives.

Once again, free-range and organic turkey production are definite possibilities, and at the moment, the market for these products, particularly organic turkey is chronically under supplied. Turkeys have very specialised needs, particularly when they are young, so, as with non-intensive chickens, seek professional advice on your proposal.

Waterfowl – ducks and geese

ducks and geese are a market that continues to grow as Australian palates become more adventurous, and various ethnic and cultural groups enjoy more and more of their traditional cuisine.

Ducks are reasonably easy to raise, and grow at a surprising rate when the appropriate strains are used. The duck market is supplied by a number of different growers, some quite large, others somewhat smaller. These growers produce ducks to different specifications; some markets require a reasonably fat bird, with fat deposited under the skin, whilst others prefer a leaner product.

Once again, the important issue is to investigate the market, its needs and demand, before looking at a business model. As with turkeys, organic ducks are still quite rare, and are certainly worth investigating.

The market for geese is considerably smaller than that for ducks, largely because they are quite seasonal in their reproductive habits, and aren’t anywhere near as prolific in terms of egg production. These production difficulties are offset somewhat by the relative ease of production (geese are pretty tough and simple to grow) and the potentially high returns for product.

Game Birds

The various breeds of game bird – pheasant, quail and partridge, are grouped together as they all have similar, specific requirements. All require specialized housing and management; all have very specific markets, and all have relatively high capital costs to establish. There are some very successful producers of game birds in Australia, and they guard the secrets of their success very closely. Therefore, if you have an uncontrollable passion to produce game birds, be prepared for a very steep learning curve and a few heartaches along the way. The rewards for the persistent are potentially significant, as quality game birds always command a premium price, particularly at the ‘high’ end of the market, i.e. exclusive restaurants.

Planning considerations common to all poultry enterprises

To this point we have looked at the various potential poultry enterprises that could be pursued, but there are some important limiting factors that they all have in common.

At the risk of becoming boring, the most important consideration is marketing, including your own level of marketing skills and the ability of the market to consume and pay.

The remainder of the considerations are basically all physical, and are described as follows:

Physical Resources

Is your land suitable to the production of poultry? Broadly speaking, the major considerations are aspect, slope, flock size, accessibility (for feed delivery and egg collection), proximity to other poultry, proximity to neighbours and potential environmental concerns (odours, run off etc.). Do you live on a very steep hill where access might be impossible, do you live in an area that experiences extremes of temperature, can you practically sustain pasture coverage. These are just some of the physical characteristics of your location that must be considered.

Planning Approval

Are you zoned appropriately to consider such an enterprise, and will the relevant authorities allow such an enterprise to be established there. Make sure that you have written permission, and that you have carefully considered the ultimate scale of your operation. It would be a shame to be approved for 250 birds a week, but be denied for 500.

Proximity to processing facilities

For poultry meat, are you within a reasonable distance from a processing plant ? (ideally within 1 hour, 2 hours would be acceptable, many birds are being transported over 3 hours at the moment). Are you prepared to construct your own facility? Whilst this is certainly the best way of ensuring quality and control, a processing plant represents a significant capital investment, and the volume of product would need to reach a level that justifies such commitment. Please remember that this must be constructed to comply with various Government regulations, and all this must be clearly understood before you proceed.

For eggs, the ‘processing facility’ is the grading floor, where the eggs are graded according to quality and size, washed and packed. Whilst there are many free range egg producers who provide eggs to the larger grading packaging companies, these growers must accept the price the packer offers, and do not have any control over the marketing of their product. This has created a situation where many producers are carefully assessing the profitability of their operation.

Sourcing Stock

Can you source a reliable supply of appropriate chickens, poults, ducklings etc.?  The smaller the traveling times for chicks, the lesser the likelihood of mortalities. Whilst speaking of stock, it is important to consider what commercially viable strains are available, and their suitability to a free range environment. It is also important to consider how often you will need to place new stock, and your supplier’s need to have orders in advance to fit in with their breeding and hatching cycles.

Breeding your own commercially viable stock will add another tier of complexity and cost, and it is highly advised you seek specialist advice.

Access to capital

Do you have access to appropriate capital; do you know how much you need?  A well-constructed, honest business plan is paramount in ensuring the success (or otherwise) of an enterprise. Carefully go through all your figures, set goals and timelines, and establish accurate cost of production figures. It may well be that you may never make any money by growing poultry.

Access to appropriate skills

In my experience, most good stockpersons can turn their hand to poultry production. If you have patience, good observation skills, discipline, and pay attention to detail, you should have the essentials of being a ‘poultry person’. However, there will be many new skills that you will need to learn, so you should establish the availability of qualified advice prior to commencing this type of operation.

Access to appropriate water

Water is a critical element, consider it very carefully. The quality of the water in terms of chemical composition, actual physical quality or cleanliness and the source of the water.

The cleanliness of the water is important not only for the welfare of the birds, but also for the reliability of the watering equipment. When producers choose to use nipples for example, fine silt suspended in the water can settle in the drinker lines, eventually affecting the flow rate of the nipple, or even blocking the flow of water altogether.

The use of surface water is fraught with danger, and should be avoided at all costs. Both town water, rain tank water and bore water are acceptable – as long as they are tested and comply with the relevant health, welfare and certification criteria.

If surface water is the only alternative, then the producer will have to treat the water with chlorine (or equivalent if available) to destroy any pathogens in the water, with an emphasis once again on avian influenza, which is endemic in wild, water bird populations.

Feed

All poultry have very specific dietary needs. Organic chickens will require specialised, organically certified feed. Can you access such a feed, and are the transport costs reasonable? The nutritional needs of modern breeds of commercial poultry is a very specialised field, and if you are contemplating formulating your own feed, (from homegrown ingredients for example), please seek the advice of a nutritionist.

Feeding

The birds must be given access to the feed in such a way as to protect the feed from contamination or degradation (for example by contact with direct sunlight or moisture) and be presented so that all the birds in the shed can gain access to the feed, without having to conflict with its shed mates. As poultry establish a very strict hierarchical regime (pecking order) the feeding system must ensure that those at the bottom of the ladder can still get adequate access.

The degree of automation in the feeding system is completely dependent on your housing design and budget. Obviously, the greater the level of automation, the more efficient the operation becomes in terms of labour input.

Feeding outside can attract larger birds, including water birds like ducks and ibises, and these present some significant disease threats, particularly from avian influenza, for which waterfowl are known to be vectors or carriers.

Permanent or movable housing

While permanent or ‘fixed’ housing certainly allows for a greater level of automation, a great degree of management skill is required to provide sustainable forage, and to manage potential nutrient build up in these areas. With large scale free range egg production in particular, recent changes allowing higher stocking densities has greatly exacerbated this problem. However, at the same time, it has also served to even further differentiate other production systems, for example “pastured free range” production utilising mobile housing.

Movable or ‘mobile’ housing on the other hand, allows for greater flexibility in terms of forage maintenance, and certainly fits much better into a whole-farm management scheme, where the nutrient laid down by the birds can be used by a specific crop, or to boost pasture for ruminant grazing. However, producers are locked into a certain level of labour intensiveness, as automation is limited under a movable house system.

michael and stuart grower shed May 2016

There is an enormous amount to be gained by providing birds with good pasture, with overall bird health and nutrition as two important issues, as well as the marketing edge of being able to state the birds are ‘pasture fed’. This is a detailed and complex issue, and deserves more than can be given in the context of this article.

Environmental Control

In large, intensive sheds, the environment (i.e. shed temperature, air speed, relative humidity and static pressure) are all controlled by computers. This provides the birds with an environment conducive to optimum production, taking away any extremes of temperature etc. By providing access to the outside world, the free-range producer cannot exercise the same level of control. There are certain measures that can be taken to minimise any ill effects caused by environmental extremes.

All shelters must comply with the The Model Code of Practice for the Welfare of Animals – Domestic Poultry clause 6.3 which states:

 “The housing facilities must be designed to ensure adequate air-flow and temperature control at maximum stocking densities when birds cluster at night or during extreme weather conditions.”

The first thing to consider is air-flow. Sheds should be designed to allow maximum airflow through the sheds. Adjustable blinds or awnings are the most commonly used method of achieving this.

Shade trees in the runs can be advantageous, however there are a couple of problems that must be understood. Firstly, layers can be encouraged to make nests under low bushes and shrubs, so these should be avoided at all costs. The second problem is that of wild birds. Shade trees can also be used by wild birds, which has at least two inherent problems, one is disease and the other predation. Wild birds roosting in shade trees can pass droppings and feathers into the run, and can even encourage them to come into physical contact with the fowls.  This is obviously not a desirable situation, but sometimes unavoidable and an acceptable risk if the shade afforded is significant. Shade trees can also provide a vantage point for raptors (birds of prey), allowing them to size up intended victims, and pounce at close range.

Another commonly used method of shed cooling is to run sprinklers on the roof of the shed, and this can be quite effective, as long as the ambient temperature isn’t too high – 380c +.

Modern breeds of commercial layers and broilers differ in their ability to cope with hot weather extremes and professional advice should be sought.

As far as cold is concerned, chickens are endowed with a wonderful insulation in the form of feathers, and provided their plumage is in good condition, they can tolerate quite cold (sub zero) conditions. However, air movement through the shed during cold weather should be minimised, as this creates a chill factor, and can diminish production. As with extremes of heat, extremes of cold will also affect overall flock performance.

Egg laying facilities

The range of egg laying facilities is extensive to say the least, ranging from simple, waxed cardboard boxes for manual collection right up to fully automated roll-away nests where the eggs are conveniently transported to a central location by way of a belt.

Once again, the choice depends very much on the type and scale of the operation, but this large variety of options is also a good indication of the scale of operation that could be undertaken. It may well be that it is far more profitable to run 2000 layers than it is to run 200. This is true for conventional, free-range producers in particular, whilst it may not be the case for some alternative producers who may well find that they are better specialising in a particular product for a particular market, and focus on producing a smaller quantity of high quality product, and charging accordingly.

Lighting

Lighting is an important issue, during brooding as well as for egg production, and producers need to understand the needs of the birds, and regulations concerning lighting, and then develop a management system that falls within certification guidelines.

Egg production for example is directly related to photoperiod, (day length), so the appropriate management of photoperiod will result in increased productivity.  The lighting of layers should be approached very carefully, as the application of lighting at an inappropriate time, or for an inappropriate length of time can be counterproductive, sometimes even disastrous.

The final component I want to discuss is commitment.

Embarking on an operation like this requires rock solid commitment for many reasons, the two most obvious I will list here.

First, these birds will require your daily attention, and whilst you shouldn’t have to spend all day, you will certainly have to give a portion of every day.

Secondly, you are entering a market that is still in its infancy, with many changes occurring. You will have to be prepared to weather a few storms, both personally and financially. You may well be joining the ranks of what some might consider the ‘lunatic fringe’, be prepared.

This article has been written to provide an overview of the alternatives available to those contemplating entering the poultry industry. Every one of the enterprises discussed warrants much more detailed information than that provided, and all prospective producers are advised to seek professional advice including various state departments of agriculture.

For those who wish to pursue one of these enterprises, do your homework. This is an exciting and rewarding industry, particularly for those who enjoy working with livestock. Poultry are very different from other domestic stock, and have fascinated and entertained for generations, and will continue to do so for a long time to come.