Poultry Feed Dilema – Mix My Own or Outsource?

The major factor affecting poultry egg production and therefore revenue & profitability is the feed. Its not enough to just provide feed, but rather a consistent product, with little variability in composition, quality and texture.
Birds are usually kept in high concentrations, so any change in the feed will quickly have a ripple effect on the productivity measured in days, with return to regular production taking longer usually weeks. The cause is that egg laying, a.k.a reproduction is not critical to a bird’s well being, so is reduced in any shocks to nutrition.
Given how critical this is, should I mix my own feed so that I have full control of the process, and outputs. That is a loaded question, my answer and advice being that it varies depending on your (the farmer) strengths and your business model.
Considerations for mixing your own feed:
  • Cash flow – as most of the ingredients are to be paid for in cash
  • Supply chain – you need to develop relationships with the providers of the ingredients to cater for times of shortages as most of them are agricultural based
  • Storage – you need to maintain your own stores and manage moisture contents along with other contamination sources. This will also include bio-security controls for the traffic within the farm related to ingredients
  • Mixing Space- you will have to mix feed regularly which period reduces with the size of operation you are running. In Uganda, you also need to manage electricity supply, repairs and operations of the motors, human resources (the mixers) along with pillage (some ingredients like premix are prone to this due to their high unit cost)
  • Dust from mixing operations – if you have a large area then this will not affect you much as this areas can be separated from the rest of the farm and living quarters
  • Consistency – can you keep doing this regularly, consistently for ever?
  • Cost – does the capex & opex for mixing your own feed add up to savings?
  • Feed formulation – do you have the necessary expertise to formulate, adjust formulae for the birds as conditions change?
Considerations for outsourcing your feed mixing:
  • Operational Capability – what capacity does your supplier have to stock up on key ingredients, ensure a consistent supply from the market even when they are shortages, and to maintain a consistent predictable feed mix. Do they have the right machinery and personnel in place, as well as capability to formulate, refine and advise on feed formulations.
  • Consistency – how consistent is the output of the feed mixing
  • Checks and balances – how is the quality of the feed maintained, and controlled, do you have to be there when the feed is being mixed all the time. Do you trust the quality of the product that you are receiving?
  • Turn around time – what is the turn around time from ordering to receiving your feed
  • Scale – will your supplier be able to scale with you as the numbers grow?
  • Feed formulation – does your supplier have the necessary expertise to formulate, and adjust formulae for the birds as conditions change?
Essentially the two camps are evenly matched with the choice depending on your particular conditions, with the ability to mix and match options as your farm grows and scales.
What choice did you take? I took the choice of outsourcing feed mixing, with the major drivers being:
  • We do not have experience with agricultural ingredient selection and quality management
  • The space we are working with is too small to allow mixing
  • The supplier we have is currently is working out for us, and we have been able to develop an efficient operation to ensure un-fettered just-in-time feed supply to the farm
  • The largest customer that our supplier services has 30,000 birds there is scaling capability there
  • There are no major cost savings given the local cost of capital & operations, so we are focusing our energies on ensuring higher revenue for our products.
  • The feed supplier is well versed with feed formulation, as well as other aspects of poultry layer management which provides additional value

Why did you make the choice you did, how is that working out for you, if you had to do it again what would you do?

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s