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Agriculture

How to Write a Poultry Broiler Business Plan 2026: The Complete Method with a Worked Financial Model

· 55 min read

How to Write a Poultry Broiler Business Plan 2026: The Complete Method with a Worked Financial Model

Part 4 of 9  ·  Section 8, steps 1–5

Building the Financial Model: From Chicks Placed to Cost per Bird

Every figure that follows is calculated, not asserted, and the arithmetic is shown so you can replace the assumptions with your own.

Part 4 of 944% through the guide

Step 1From chicks placed to birds sold

Saleable birds = birds placed × (1 − mortality rate)

60 000 × (1 − 4.5%) = 57 300 saleable birds

Converting birds placed into saleable output
Step Calculation Result
Birds per cycle — 10 000
Cycles per year — 6
Birds placed per year 10 000 × 6 60 000
Mortality — 4.5%
Birds lost 60 000 × 4.5% 2 700
Saleable birds 60 000 − 2 700 57 300
Average live weight — 2.2 kg
Total kilograms sold 57 300 × 2.2 kg 126 060 kg

Step 2Calculate the feed requirement

Total feed (kg) = (saleable birds × feed per bird) + (birds lost × feed per bird × partial share)

(57 300 × 3.74) + (2 700 × 3.74 × 40%) = 218 341 kg

At a delivered bulk feed price of R7.20 per kilogram, the annual feed bill is R1 572 057, or R27.44 per saleable bird. Feed is bought in three phases — starter, grower and finisher — at slightly different prices; the blended rate is used here for clarity, but your plan should show the three-phase split if your supplier prices them separately.

Step 3Build the variable cost structure

Figure 2Annual variable costs for 60 000 birds placed
ANNUAL VARIABLE COSTS FOR 60 000 BIRDS PLACEDFeed52.6%R27.44R1 572 057Day-old chicks23.1%R12.04R690 000Transport and delivery5.9%R3.10R177 630Brooding energy4.8%R2.51R144 000Health programme4.4%R2.30R132 000Bedding and shavings3.2%R1.68R96 000Catching and loading2.6%R1.35R77 355Crates and packaging1.7%R0.90R51 570Litter removal0.9%R0.47R27 000Water0.7%R0.37R21 000PER BIRDANNUALTotal variable costsR52.16R2 988 612Feed and day-old chicks together are 76% of variable cost — which is why feed conversion is the most valuable metric on the farm.

Feed and day-old chicks together are 76% of the total, at R2 988 612 a year or R52.16 per saleable bird.

Step 4Add the fixed cost base

Fixed cost base for the worked example
Fixed cost Annual Note
Salaries and wages (permanent staff) 486 000 7 permanent employees
Depreciation 392 000 Non-cash; added back in EBITDA
Farm electricity, standby power and fuel 168 000
Repairs and maintenance 124 000
Vehicle running costs 112 000
Insurance 88 000
Security (outsourced) 84 000 Outsourced guarding
Accounting, compliance and audit 72 000
Administration, telephone and sundry 66 000
Biosecurity programme and laboratory testing 58 000 Includes veterinary retainer
Marketing and customer development 46 000
Total fixed costs 1 696 000 R29.60 per saleable bird

Step 5Calculate the cost per broiler

Cost per saleable bird = total production costs ÷ saleable birds

R4 684 612 ÷ 57 300 = R81.76 per bird

Figure 3The full cost build for one saleable broiler, against the selling price
THE FULL COST BUILD FOR ONE SALEABLE BROILERFeedR27.44ChicksR12.04Other variableR12.68Fixed costsR29.60TOTAL COST R81.76SELLING PRICE R88.002.2 kg × R40.00/kgMARGIN R6.247.1% of selling priceCost per kilogram: R37.16The only figure that compares farms fairly. A 1.6 kg bird at R70looks cheaper but costs R43.75/kg.Thin-margin, high-volumeA plan showing a large margin per bird is almost alwaysunderstating costs.

Feed R27.44, chicks R12.04, other variable R12.68 and fixed costs R29.60 total R81.76, against a selling price of R88.00.

Cost per bird and margin
Measure Value How it is calculated
Feed cost per bird R27.44 Total feed cost ÷ saleable birds
Chick cost per bird R12.04 Chicks placed × chick price ÷ saleable birds
Variable cost per bird R52.16 Total variable costs ÷ saleable birds
Fixed cost per bird R29.60 Total fixed costs ÷ saleable birds
Total cost per saleable bird R81.76 All costs ÷ saleable birds
Cost per kilogram R37.16 All costs ÷ kilograms sold
Selling price per bird R88.00 2.2 kg × R40.00/kg
Margin per bird R6.24 Selling price − total cost per bird
Margin as % of selling price 7.1% —
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