Swot analysis of poultry farming. Poultry farming is the process of raising birds like chickens, ducks, turkeys, geese, and others to get eggs, meat, or feathers. The bird raising could be domestic or commercial, but our focus would be on commercial and mass-scale chicken poultry farming.
When we talk about commercial-scale poultry farming, then the poultry feed comprises of a perfectly balanced high energy protein based diet to maximize the feather, skin, organ, and muscles. They raise chickens in a perfectly controlled environment to avoid frightening, overheating, chilling and crowding.
Most importantly, they use mechanical processes to clean operation, pick eggs, water, and feed the chickens. The chickens’ farmers raise it for meat are broilers, and the ones they raise it for eggs are layers.
According to an estimate, approximately 60 billion chickens are produced and slaughtered every year. Poultry and chickens are one of the main types of food in the American diet and lifestyle. It’s because the cost of chicken is relatively lower than other types of meat.
Today, we’ll discuss the swot analysis of poultry farming. Here’s it’s going to focus on the internal and external factors impacting one of the world’s large meat industries. Here’s the swot analysis of poultry farming as follows;
Strengths of Poultry Farming
If you’ve established a chicken poultry farm and you’re doing everything by the book. Whether it’s feeding of chicken, keeping the environment controlled, or following the farming regulation, then your chickens would be ready for layers and broilers within 4 to 6 or 8 weeks depending on the feed. It allows you to sell the final product in the market and earn profit and start the process all over again.
Poultry farming is one of the most profitable businesses in the world. According to an estimate, it contributes more than 49 billion dollars annually to the US economy.
Poultry chicken farming isn’t a competitive industry. When your product (chickens) is ready, then you can easily sell it in the market without investing any capital on marketing and promotion every time. You just have to build the relations at once with local sellers, hotels, and restaurants; it would benefit you in the long term.
When you establish your poultry farm, then you’d need to buy chicks, feed, and other relevant products. It compels you to increase your business circle and connect with other poultry farmers, suppliers, distributors, and operators. The experienced operators give you tips and tricks to improve your productivity.
Not Easy Entry
According to an estimate, the initial investment of starting a poultry farm in the US market ranges from 75,000 dollars to 1 million dollars depending upon the location, size, and various factors. It’s a huge investment, and only serious businessmen join this industry.
Weaknesses of Poultry Farming
No Flexible Prices
The prices of chicken are fixed and you can’t negotiate over the price. Whatever price food and price regulatory authority set, you have to accept that even if it doesn’t meet your expenses.
High Transportation Cost
The transportation cost of bringing the small chicks to the farm and then distributing the final product to the stores, hotels, and local food markets is very high. If the retail price is good, then it pays off all the expenses and generates revenue. Otherwise, you have to pay it from your pocket.
High Initial Investment
It requires a plethora of capital to establish a well-controlled poultry farm that could generate some revenue. It’s difficult to make a profit from ordinary poultry farms. In fact, the failure rate is higher among the poultry farms that don’t follow the controlled environment.
Your competitors are selling the same product (chickens) whatever you’re selling. In other words, there’s no product differentiation in this industry. It doesn’t give anyone a competitive edge over the other.
Opportunities available to Poultry Farming
Sale of Business
The most interesting thing about the poultry farming business is that it allows you to conveniently sell your business at the price to earnings ratio. For instance, if your current earning and share price is good, then you can sell your business at a much higher profit than your original investment.
If your poultry farm’s production is growing, then you can expand your business by becoming a wholesale distributor of chickens. It would allow you to build relations with bigger hotels and supermarkets.
Relevant Products Extension
Most of the poultry farmers start with broilers. Later they expand their portfolio by establishing layers and hatcheries to further diversify their portfolio. It would strengthen farms’ position and minimize the risk factor.
Relation with Vendors
If you develop better relations with vendors and provide them an option of urgent delivery. It means that they could come and take the chickens anytime they need it. It would reduce your transportation cost.
You could borrow additional capital and loan from the banks and the investors by showing them your previous record. You could utilize the borrowed money to further expand your farm in terms of product and business portfolio.
Threats Poultry farming has to face
High rent, costly feed, high distribution, and transportation costs, insurance, and other running, variable, and administrative costs make the overall expenditure very high. It could bankrupt your entire business. Therefore, it’s important to keep in mind various costs before investing your capital.
Many animal welfare activists are working to pass legislation about the better treatment of chicken on farms. It would further increase the cost.
Avian influenza or bird flu is a very deadly virus for chickens and it could occur at crowded chicken farms. Once it breaks out, it could jeopardize your entire livestock. Although it happens rarely, the risk of spread is there.
Conclusion: Poultry Farming Swot analysis
After a careful study of the swot analysis of poultry farming, we’ve concluded that poultry farming is indeed one of the world’s most profitable businesses. The influenza virus, increasing cost, heavy investment, and limited price flexibility are some of the main challenges. Poultry farmers should conduct a thorough cost and market research analysis before investing their capital.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.