Poultry farming is when you keep birds like turkey, geese, ducks, chickens, quails, and others for sake of getting feathers, meat, and eggs. People usually raise birds for two reasons; domestic and commercial. However, today we’re going to focus on the commercial mass-scale poultry farming business.
Speaking of mass-scale commercial poultry farming, the objective of poultry farmers is to amplify the muscular organs, skin, and feathers of the birds by feeding them an energetic protein-based balanced diet. Farmers maintain and control the environment of the poultry farms in order to avoid external factors like overheating, crowding, cold chilling, and frightening.
According to a study, the poultry farming industry produces and slaughters over 60 billion chickens annually. When we talk about the American lifestyle and diet, then the chicken is one of the main food items because of its lower cost than any other meat.
It’s important to mention here that broiler is when farmers raise chickens for meat, and it would be layers when they raise it for eggs. However, many poultry farmers use advanced mechanical tools to feed, water, egg picking, and many other routine cleaning operations.
Today, we’re going to study the swot analysis of poultry farming. Our focus here would be to analyze the strengths, weaknesses, opportunities, and threats impacting the poultry farming industry.
The swot analysis of poultry farming as follows;
Table of Contents
Strengths of Poultry Farming
Difficult to Enter
According to a statistical estimate, the cost of establishing a poultry farm is within the range of 75000 to 1 million dollars in the US market. It could be up or down depending upon the number of factors like farm size, location, equipment, and many other fixed and variable costs. Only serious businesses and investors would take the risk of such a heavy investment.
Experienced Operators
The chick feed supplier and poultry farmers have a network in different regions. Often some operators deal with poultry farmers and provide them various services. If you’re in the poultry farming business, then the poultry farmer network and operators would provide you guidelines and keep you updated. Such type of assistance plays a significant role for new farmers.
Low Competition
There are a very limited number of competitors and the poultry farmers don’t have to spend a lot of resources on marketing and promotion of your products. When your chickens are ready and have gained sufficient muscles and weight, then you could easily sell them at the local market, hotels, and restaurants via distributors.
Profitability
According to a study, the poultry farming industry adds approximately 49 billion US dollars to the American economy. Chicken farming is one of the world’s most growing businesses.
Lower Risk factor
A limited number of competitors, high profitability, no marketing expense, and not easy entry show that the poultry farming business has a very stable business environment. However, if you conduct various farming operations by the book in terms of feeding the chickens and controlling the farm environment at the optimum level, then it pays off well.
Weaknesses of Poultry Farming
Low Differentiation
It’s no doubt that poultry farming is one of the world’s most profitable businesses. One of its most prominent weaknesses is that you can’t differentiate your product (chicken meat) from competitors. If you want to increase your earnings, then you have to follow the conventional business method of expansion.
Higher Investment
The initial investment of launching the poultry farm, buying/leasing the proper, and many others fixed and variable costs are much higher. If you want to secure your investment, then you have to invest a couple of hundreds of thousands of dollars in the controlled environment. It’s because the failure rate is much higher in the open environment.
Transportation Cost
The distribution of chickens to stores, restaurants, and slaughterhouses is the additional cost that many poultry farmers have to incur. Normally, a farmer could manage the transportation expense. It becomes difficult to manage when the retail price is lower.
Fixed Pricing
The network and regulatory department set the prices of chicken meat, and you don’t have a say in it. If you’re new in the industry and the market price is lower, then it becomes difficult to survive in the poultry farming industry.
Opportunities for Poultry Farming
Partnership & Acquisition
Expansion through acquisition is the best way to increase your earning. For this purpose, you have to maintain your financial position in order to attract the attention of potential investors and banks. Once you acquire the capital from the bank or the investor, then you can use it to buy small farms and expand your business and market influence.
Vendor Relationship
If you use your influence and PR and make partnerships with the hotels, restaurants, and vendors, then it would increase your sale. You can offer them special services like delivery on call at any time; they could visit the farm and buy chickens at any time whenever they need the delivery.
Product Line Extension
Most of the poultry farmers start the business with chicken meat farming as a broiler. When their business starts growing, then they establish their own egg hatcheries and layer farming. The product line extension allows them to diversify and expand their earning and business portfolio.
Wholesale Distribution
If you have got a large network of poultry farms, then you could offer a delivery service to the supermarket, malls, and stores. It would further amplify your business growth and sale.
Selling Business
The poultry farming business allows you to sell your business at any time. For instance, you’ve started farming at a small scale and expanded your business over time. However, you have maintained a very good market and financial position. Now, you can sell your farm at the current market rate instead of your old position.
Threats to Poultry Farming
Bird Flue
Bird Flu or Avian Influenza is a chicken viral disease that spreads in crowded poultry farms. It’s significant to mention it here that it doesn’t happen often. When it does happen, then it would destroy the entire livestock of your farm.
Regulations
The animal welfare movements and NGOs are protesting for the better treatment of chickens in poultry farms. If any such legislation is passed, then it would increase the management cost.
Increasing Cost
Rents, insurance, transportation, distribution, chicken feed, and many other administrative and operational costs increase the expenses of the poultry farm.
Conclusion
After conducting the detailed swot analysis of poultry farming, we can say that the poultry farming business is one of the most in-demand and profitable businesses. However, this sector has several challenges like increasing cost, influenza virus, location, and transportation and harsh weather. Poultry farm business investors should spend on research and development to minimize the associated risk and increase Return on Investment.
