Factors Affecting Profitability of Layer Hens Enterprises

Abstract

Problem statement: Layer hen enterprises suffer from low profitability or losses in many of developing countries all over the world. Jordan is not an acceptance. Approach: This study aimed at investigating the influence of ten main factors affecting the profitability of layer hen producers. The investigated factors include price of purchased pullet, feed price, cost of labor, cost of veterinary service and medicine, building and machinery depreciation, repairs and maintenance and miscellaneous costs, length of production cycle, feed conversion ratio, mortality rate, egg sale price and laying percentage. Results: The study used a multiple regression profit model to estimate the effect of the above mentioned factors on profit per kg egg produced. The direction and quantity of relationship between profit per kg egg and variables affecting profit were investigated. Data from 40 operating and randomly selected egg production enterprises in the country was collected. Data was obtained directly from the producers during April to mid August 2010. Semi structured interviews were conducted with a pre-tested questionnaire. The data obtained via interview surveys were processed to calculate profit per kg egg and other relevant information for inclusion in a profit function model. Fifteen eggs are registered to be 1 kg in the study. Cost and income items used to calculate profit in the study. The results of the study revealed that the feed price was found to be the factor which has the highest negative impact on the profitability showing the coefficient-3.01. The egg sale price was with high positive impact on profitability showing the coefficient 2.633. Conclusion/Recommendations: From the results of the study it could be concluded that higher prices of purchased or breeding pullet, higher feed price, higher cost of labor, higher cost of veterinary service and medicine, higher other costs including building and machinery depreciation, repairs and maintenance and miscellaneous costs, higher feed quantity to be converted to eggs and higher mortality rate are associated with lower profitability of laying hen enterprises, while higher length of production cycle, higher egg sale price and higher laying percentage are associated with higher profitability. Critical limits indicated for various cost components should be used as a guideline to adjust budget in commercial egg operation thereby, ensuring higher net profit per bird.