A short working life
A layer hen starts laying around week 30 and is most productive from about week 35 to week 60. After that she is sold for meat, mostly to north Kerala and north Karnataka where a chewier chicken is liked, though she can lay until about week 80. Each bird gets about 110 grams of feed a day: maize, jowar and soya.
In cost terms the hen is a short-lived asset: bought as a chick, raised for months before she earns anything, then sold for a little at the end. Her cost has to be spread over the eggs she lays.
The hen is a short-lived asset. Her cost has to be spread over the eggs she lays.
A price set every day
Farmers do not haggle egg by egg. The National Egg Coordination Committee announces a rate for the Namakkal zone, and traders buy at that rate less 10–20 paise an egg. When the rate was ₹4.20, a trader buying 22,000 eggs a day paid about that much.
With a margin of paise per egg, size decides everything. A study of the zone found a farm needs at least 30,000–50,000 hens to break even; a farm with one lakh birds reported a net profit of about ₹7 lakh a month in 2016-17.
A third of India’s eggs
By 2022 about 1,100 farms in Namakkal produced 5–6 crore eggs a day, against India’s total of about 18 crore. Some farms hold 8 lakh birds. Eggs go to Kerala, Karnataka, north India, school mid-day meals in Tamil Nadu, and abroad to the Middle East, the Maldives and West Africa.
Feed and disease
Two things can wipe out a year: feed prices, since maize is the biggest cost, and disease. In 1985 an outbreak caused heavy losses, and the state set up a veterinary college in Namakkal. Today farms sanitise every vehicle at the gate, test maize for toxins at a local lab, and the district has been declared free of bird flu.
Points for a finance reader
- Know your break-even size. With paise of margin per unit, fixed costs need volume. Work out the smallest size that pays.
- Spread the cost of a short-lived asset. Treat each flock like a machine with a known useful life, less what it fetches at the end.
- Your biggest input is your biggest risk. When maize moves, the whole cost sheet moves. Watch it daily.