Agricultural Economics and Extension Project Topics

Profitability Analysis of Layer Enterprise

Profitability Analysis of Layer Enterprise

Profitability Analysis of Layer Enterprise

Chapter One


  • The broad objective of the study was to investigate the profitability of poultry egg production in Esan North East and Ovia North East Local Government Area of Edo State.
  • To meet the general objective, the study focused on the following specific objectives:
  • Examined the socio-economic characteristics of egg producers in the study area.
  • Estimated the farmers’ current level of profit from egg production.
  • Estimated the viability of egg production in Esan North and Ovia North East Local Government Areas.
  • Identified the constraints faced by poultry farmers in the area of study.
  • Analysed the relationship between input used and quantity of eggs produced by respondents.
  • Estimated the farmers’ current level of profit from day old chicks to point of lay production.




This chapter will review literature related to the study, it will focus on poultry production, poultry management, problem facing poultry production and solution to the problems, economics of poultry production and analytical techniques used in economics of poultry production.


The term “poultry” in agriculture generally applies to a wide variety of birds of several species including chicken, guinea fowls, pigeons, ducks, geese, turkey, swans, peafowl, ostriches, pheasants, quails and other game birds kept for eggs or meat production (Alders, Robyn). Chicken (Gallus domesticus) is the most common poultry dominating the small holder poultry production systems of Africa hence, it is sometimes considered synonymous with poultry. The domestic fowls (chickens) belong to the order “Galli” it originated in the tropical countries of the world, therefore birds from any country in the world can be easily introduced to the tropics with little difficulty of adaptation (Mgbakor Miriam Ngozi and E. Nzeadachie Chinonso 2013).

Commercial hybrids (layers and broilers) all over the world are being propagated for production of eggs and meat. The hybrid layers usually start laying, at about 20 weeks of age and peak egg production is attained during the first production cycle. The average production rate of commercial layers usually remains very close to 0.9 eggs per day (Ashagidigbi et al., (2011)).

However, as the age increases, their egg production decreases. This situation is further aggravated during the second production cycle. Appetitive behaviour of hens is also affected during the later stage of production age. The climatic conditions have also been known to affect the production behaviour of the laying hens (Ashagidigbi, W.M, S.A. Sulaiman and A. Adesiyan (2011)). In areas where climate is hot and humid, commercial hybrids produce an average of 180 200 eggs per year, while in more temperate climate, birds can produce between 250 and 300 eggs per year. The production cycle of eggs may also be influenced by many other factors such as breed, mortality rate, body weight, laying house lightening schedule, feed and culling (Spielman, D.J. & Pandya-Lorch, R. 2009.).

After one year of production, layers are culled and used for meat purpose without exploiting their full inherent potential, which can be exploited up to second production cycle (Spielman, D.J. & Pandya-Lorch, R. 2009). The factors like diseases and market rates usually reflect a miserable picture of annual flock replacement while rearing new pullets for profitable egg production.

Moreover, keeping aged hens as such is uneconomical because of gradual decline in egg production with more erratic clutch cycles and poor feed efficiency in the relatively heavy layers. Therefore, pullets and spent layers must be managed effectively and efficiently in order to get maximum output and profitability (Beutler, 2007). However, very little research work has been conducted under local climatic conditions in Pakistan to exploit the production potential of spent layers.

Over the years there have however been human interventions on the natural habitat through domestication and research which have resulted with different management systems. This manipulation on the natural habitat is simply as a result of rise in the standard of living of Nigerians, which consequently makes the call for high demand for eggs and poultry-meat become substantial because most people cannot raise their own poultry. Essentially there are three (3) main prevailing management systems in Nigeria. The term “poultry” in agriculture generally applies to a wide variety of birds of several species including chicken, guinea fowls, pigeons, ducks, geese, turkey, swans, peafowl, ostriches, pheasants, quails and other game birds kept for eggs or meat production (Binuomote et al., (2008).





In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.


Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.



This chapter is concerned with the presentation of analysis and the interpretation of data collected during the distribution of the questionnaires of the study.




An attempt to examine the economics of poultry production in selected local government area of Edo State was the principal focus of this study. The specific objectives were to: describe the socio-economic characteristics of poultry farmers in the study area, estimate profitability of poultry production in the study area, and determine the relationship between inputs and output obtained in poultry production. Primary data were collected from 80 poultry farmers selected through multi-stage random sampling technique from Esan North and Ovia North East Local Government Areas, using structured questionnaire. Descriptive statistics, farm budgetary technique, benefit cost analysis and ordinary least square regression analysis was used to analyze the data.

The results of the analyses revealed that majority (72.5%) of the respondents were male   with the mean age of 38.7 years. (63.8%) of these youths had keen interest in poultry production and chose poultry farming as their main occupation. Result of the cost and returns to estimate the profitability of poultry production in the study areas revealed that there is profit in poultry production in the study area with net farm income from layers production stood at ₦1,534,093.53 while that of broilers was ₦ 1,966,086.49 in one production cycle respectively. The finding reveals that poultry production is profitable in the study area. Analysis of the result also showed that inputs such as cost of day old chick, labour, feeds, depreciating cost of equipment and operating expenses have significant relationship with poultry output in the study area.


This study investigated the economics of poultry production in the selected local government areas of Edo state. Three important findings emerged; first, poultry production in the state is dominated by highly educated youths, a positive sign for future poultry activities. Second, poultry production is highly profitable in edo state; however, broiler production contributed the highest return in the area of study. Thirdly, the costs of inputs as revealed by the regression analysis were high and increasing with the size of production thereby depriving the farmers the full benefit of their efforts


  1. To reduce cost of production Farmers should form agricultural cooperative groups which will enable them to benefit from the economy of scale through bulk purchases of farm inputs.
  2. Government should encourage the youths involved by providing them technical knowledge in the area of resource management through the extension agents to assist in reduction of production cost.
  3. Government should try to provide the essential farm input such as drugs and vaccine to the farmers at the right time and at subsidized prices to reduce the cost of production in order to improve profitability.


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  • Alabi, R.A. and M.B. Aruna (2006). Technical Efficiency of Family Poultry Production in Niger Delta, Nigeria, Journal Central European Agriculture 6(4) 531-538.
  • Alders, R.G. & Pym, R.A.E. 2009. Village poultry: Still important to millions, eight thousand years after domestication. World’s Poultry Science Journal, 65(2): 181-190.
  • Alders, R.G., Bagnol, B. & Young, M.P. 2010. Technically sound and sustainable Newcastle disease control in village chickens: Lessons learnt over fifteen years. World’s Poultry Science Journal, 66: 433-440.
  • Ali, M.D. (2002).Nigeria poultry and products-poultry update. USDA, Foreign Agriculture
  • Ashagidigbi, W.M, S.A. Sulaiman and A. Adesiyan (2011).Technical and Allocative
  • Bell, D.D. & Weaver, W.D. 2001. Commercial chicken meat and egg production, 5th edition. Los Angeles, California, USA, Kluwer.