Did you know the average poultry farm provides over a million dollars of chicken for people to eat every year? John Mathia and Geoff Scott showed us how to start a poultry farm and turn it into a vertically integrated award-winning business. You can too!
Geoff and John started Marion Acres in 2012 so they could eat healthier food than they could buy at the supermarket. Their first attempt at growing their own food went horribly wrong: tractors broke, rains made the land unusable, and the landowner sold the land out from under them––but they persevered. They went from 32 chickens in Geoff’s garage to a poultry farm with different animals, a grocery store, a slaughterhouse, and award-winning chickens.
We’ll share how they developed one of the northwest’s most successful poultry farms! You’ll learn about government subsidies, partnerships, and building a vertically integrated business.
They’ve got information any poultry business can use. Let’s start by learning about the poultry industry.
Step 1. Learn About Poultry Farming
Don’t try to just jump straight into the chicken business and expect to make a million dollars overnight. There’s a lot to learn about the chicken farming business. You will have federal, state, and local laws to follow. In addition, there are lots of capital expenditures. Plus, you’re raising animals, so without proper hygiene, your whole farm could die.
Don’t be scared, though. You can start small. Geoff told us:
Geoff recommended Reading Pastured Poultry Profits by Joel Salatin, plus we added some other best sellers on Amazon for avid readers.
Here are some interesting reads I found while researching the topic:
We’ll help you understand the poultry business so you can decide the best strategy for your chicken farm. Let’s start by looking at the poultry industry.
How much to start a chicken farm?
Geoff and John started off with:
- 32 broiler chickens: $75
- One chicken tractor: $220
- 150 pounds feed: $100
- Gravity water dispenser: $60
- Total: Under $500
So, you don’t need a lot of money to start raising chickens. If you don’t have land, that’s another story. Let’s look at how much it costs if you need land.
How much does it cost to start a chicken farm if you don’t own land?
Poultry farming will be more expensive if you don’t already have land to use. Chickens need space and a healthy environment. Chickens require at least three square feet per chicken plus space for storage, vehicles, home, etc.
That means the first acre will hold a maximum of 4500 chickens and each additional acre can hold around 5,000 chickens.
If you don’t have land, you can expect at least $100K startup costs for poultry farming. Some resources even say a poultry farmer should expect to spend $250K. The number of chickens you can hold will depend on the number of acres you buy. Check out the table below for an idea of how land will impact the costs and revenue.
Of course you don’t have to start off with 5,000 chickens. You can start smaller and build your way up. But realistically expect to spend the cost of a down payment and the first two to six months of the mortgage right away. Then, with every 100 chickens expect to spend $1.500.
Is chicken farming profitable?
A poultry farm business can sell both chicken and eggs on the commodity markets or direct to consumers (DTC). Let’s look at each.
Poultry companies selling DTC
Egg production and meat production can be highly profitable if you sell directly to consumers. Marion Acres sells most of its meat to people and local restaurants, which differs from many farms that sign contracts with major poultry corporations. Geoff told us:
Check out the rest of our interview with Geoff and Josh.
They sell their meat at $13.99 per pound (lb) because it is non-GMO, pasture-raised broiler farming. That means they make about $50 per chicken and $15 is margin.
Unless a poultry farmer processes the meat onsite, they shouldn’t expect to get such high margins, though.
Selling as a commodity
A poultry farm business might sell on the open market as well. In this scenario, you’ll need to register with the USDA. You’ll be selling to companies that process the live chickens and turn them into breast, wings, thighs, and other meat for consumption. In this scenario, your profit would be:
You’ll want to compare current pricing for broilers versus eggs to decide which is more profitable. Alternatively, you could do a mix of broiler meat and egg laying.
Geoff told us about how a lot of farmers operate:
During many years farmers will run at a loss and have to be subsidized by the government, so make sure you talk to a financial advisor before you jump into the poultry farm business.
According to IBISWorld, the average American eats approximately 112 pounds of chicken, eggs, turkey, and other farm fowl each year. They expect Americans to increase their consumption by about half a pound per year.
Chicken farms sell chicken and other birds based on the commodity market rates, which have ranged from 59 cents per pound at the beginning of the COVID-19 shutdowns to an all-time high of 99 cents per pound on June 17, 2022. Estimates expect that this inflation will level off and return to approximately 1% increases in the prices paid for full birds.
From the poultry farm, the birds will go to:
As a result, a bird that sold for 99 cents per pound, increases to about $5.99 to $7.99 for a whole chicken in the supermarket. Breasts and tenders can go for over $4 per pound according to the USDA.
However, Geoff and John reap most of the profits from their poultry farming because they own the processing and supermarket. Let’s look at each of the players in the poultry farm business to see how it quadruples in price from the farm to the consumer.
A farmer’s main costs include:
- Land: It’s best to be near but not in big cities. Prices of land can vary dramatically. For example, you might find two to five acres ranging from $5,000 per acre to $2.5 million per acre.
- Chicken coop: Later on, we’ll explain how to build a chicken coop, but if you’re building with three square feet per chicken, you’ll probably end up spending a ton on your chicken house.
- Chickens: You might find day-old chickens for approximately $1 to $2.50 per chick based on the quantity, sex, and whether they are GMO-raised.
- Feed: You’ll need to feed the chickens, and you’ll probably want to buy in bulk. Per pound, smaller bags are much more expensive than when you buy a ton of feed.
- Transportation costs: IRS mileage deductions change each year, but have been over $.50 per mile since 2008. You can deduct actual costs instead.
- Employees: If you have over 500 chickens per owner, plan to spend $15 per hour according to the BLS.
Poultry and other meats require processing, which is an industry worth approximately $227.6 billion with a 4.8% profit margin according to IBISWorld. Poultry processing is included in US Industry (NAICS) Report 31161. I strongly suggest you pay for the report if you’ll be involved in processing, especially if you need a loan.
Using current market rates, the spending breaks down to:
- Purchase price per pound: $.99
- Additional expenses per pound: $.75
- Profit per pound: $.09
- Sell to the wholesaler by the pound: $1.83
Processing is where most of the additional costs in the industry occur, but not where most of the profits are. At the time of writing, there are 5,486 processing companies, and the major players get 57% of the revenue and 98.25% of the profits. The major players are included in the chart below:
That means the average company can expect to achieve a maximum of $18,000,000 revenue and up to $867,000 per year. There are a lot of industry participants operating at losses.
Once the meat has been processed, it is sent to the wholesaler.
These are the companies that sell to grocery stores and restaurant chains. There are between 700 and 800 businesses in this category, but the industry is dominated by Sysco and Cal-Maine foods, which get a combined 52% of the revenue.
Interestingly, smaller wholesalers seem to perform better with a higher profit margin of 3.19% on a little over $8 million revenue on average.
- Purchase price per pound: $1.83
- Additional expenses per pound: $.40 per pound
- Profit per pound: $.57
- Sell to supermarkets by the pound: $2.80
The supermarket industry makes $757 billion in revenue with 21.3% of that attributed to meat, poultry, cheese, and eggs. The purchase of food items accounts for almost 70%. They also average 1.8% profit, but Publix manages to hit a 27.6% profit margin.
- Payment to wholesaler: $2.80
- Profit: $.07
- Other expenses: $1.13
- Consumer price per pound: $4
Why does this matter to a poultry farm?
It means that by the time the food gets to the customer, three other companies are adding $3.01 to the price of the chicken, of which 75 cents is profit.
That’s why John and Geoff’s business model is so brilliant. Instead of being a commodity that gets the short end of the stick, they’ve built their poultry farm into a slaughterhouse, packager, retailer, and online store.
While this comes with additional costs, they effectively make 2.5 times the revenue while increasing the costs by approximately $2.28 per pound with potential profit margins of 10%.
There are a lot of laws covering poultry farming and egg production. You’ll want to familiarize yourself with:
- EPA rules on animal feed operations
- USDA policies regarding livestock
- Farmers Service Agency (FSA, a division of the USDA specifically to help farmers succeed)
- State agencies may have policies about farming permits, licensing, or inspection. Check the FSA map to find experts on your state regulations.
- Many cities and counties may have regulations that apply to starting a chicken farm. I would suggest talking to your local SBA office and health district.
Don’t forget to register your farm. Marion Acres is a multi-member LLC, but it operates similarly to a partnership. Read our blog that walks you through how to register an LLC.
Weather, unemployment, and disposable income all have an impact on farming poultry. Chickens don’t sweat, so temperatures above 90 degrees can jeopardize their health. Make sure to take that into consideration if you are considering how to start poultry farming.
Choose a Poultry Sector Next
Now that you know a little about the types of businesses involving poultry, what kind of poultry business are you going to start?
Whichever one you choose, your focus should be on how to maximize the output for the lowest cost. Given the primary variable cost is feed, you want to focus on the following ratios:
- Broiler farm: meat per pound of feed
- Laying eggs: Eggs per pound of feed
Let’s look at the different breeds of chickens you can choose for your own poultry business.
Type of Bird
Were you raised on a chicken farm?
If you weren’t, I bet you’ll be surprised by the number of chicken breeds available. Fortunately, Chicken Breeds List has an extensive knowledge-base about chickens. It’s basically a one-stop-shop about poultry farming for beginners, with over 31 different breeds ranked based on:
- Number of eggs per year
- Growth potential
- Space requirements
- And other considerations
They rate the Leghorn as the best egg-laying chicken and the Cornish Cross as the best for producing fast and plentiful chicken meat production.
Look for their awards on sites that educate, breed, or cook chicken. If you see one of them, this means they are a poultry company focused on excellence.
Oops! I spent half the blog educating us on the chicken industry. Let’s carry on with how to start a poultry farm in the USA.
Step 2. Write a Poultry Farming Business Plan
Poultry farming business plans help you keep yourself focused on your goals. Whether you just want enough to feed family and friends, you want to sell eggs or chicken meat locally, or you have dreams of becoming a major chicken farming business, a business plan will help.
Check out our blog about business plan writing and write your own. If that’s not your style, we understand. Marion Acres has never had an official business plan. They told us;
After you have a business plan for your poultry farm, you’ll know whether you need extra funding or not. If you do, you might want to consider business loans.
Step 3. Poultry Business Loans
If you don’t already have land to start a poultry farm, you’ll need to get some. That means you probably need to buy it. Most landlords won’t love a chicken coop in their garage.
Plus, there’s other poultry farming equipment you’ll need. In addition to the standard loans available for most businesses, the FSA has farming loans that help people buy land, invest in equipment, and make it until the next harvest.
There’s even youth funding to help 10 to 20-year-olds do farming projects. Put your kid to work raising chicks! Teaching them young is great for when they want their own business.
Next, choose a location for your poultry farm.
Step 4. Find a Location of Chicken Farm
Where are you going to raise chickens?
Well, that depends on how many you have. Raising chickens can be a space-consuming venture. The poultry farm business can consume three to ten square feet per chicken meaning you can fit about 33 chickens in a 10 x 10 space.
That means an acre can hold between 4k and 14k chickens, but that doesn’t leave room for much else. That would also be a massive chicken house.
Chickens also do best in 70° to 75° weather, and they can have heat strokes when temperatures get above 90°. Geoff told us:
You also want to create a farm where the cost of land plus transporting poultry products is balanced to minimize costs.
Step 5. How to Make a Chicken Farm
Poultry farm design is focused on creating effective layouts and processes to help chicken farms become more profitable and efficient. Check out the Big Book Project.
You’ll need to do things like:
We’ll look at a few, but I strongly advise checking out the Big Book Project and talking to other poultry farming businesses to learn more about designing a small farm. Acclimating to the setting in person will give you a powerful perspective on chicken farming.
How to start a poultry farm: Build a Chicken Coop
Marion Acres uses what they call a Chicken Tractor with a Gravity Water Delivery System for their broiler chickens. It’s an 8-foot by 8-foot enclosure made from:
- Nine 2” x 2” wood beams: $4 each = $36
- Seven 8’ x 2’ corrugated steel panels: $22 each = $154
- Chicken wire: $39 (should be approximately 1 roll)
- Nails and screws: $5
- Estimated Total: $234 + tax, shipping, and handling
When they built it, the total cost would have been about $220 for the coop and $60 for the gravity water delivery system.
This makes it where they can easily move the chicken coop to different spots on the poultry farm. Watch the video below to view how they built the chicken tractor.
Almanac.com has a good read on how to make a chicken house. They suggest keeping the poultry house near where people are at all times of day so that someone can hear if a fox tries to enter the chicken house.
Farm innovations have created intensive poultry housing systems. With automated feeders, watering systems, and other improvements, you can more easily care for your chickens. You’ll have to establish the proper settings for your poultry house because chicken breeds vary on their needs. Learn about some of the best feeding systems.
How to start a poultry farm: Buy Feed
Every chicken will need to eat. Without poultry feed, you’ll have a hard time keeping your chickens healthy. Chicken feed is made with specific purposes in mind. You can buy poultry feed for:
- Baby chickens: Starter food is best for ages that range from day old chicks to 20 weeks.
- Chicken broilers: If you’re just trying to raise chicks to sell the meat, get food specifically for broilers.
- Teenage chickens: If you want to keep your chicks properly cared for until they each become an adult chicken, you might want to change from starter food to grower food at six weeks. You’ll want to change this when they start laying eggs.
- Egg layers: Once chickens start laying eggs, they need layer feed to help produce healthier eggs. It’s like grower feed but with more calcium and minerals.
When you’re just getting started, you can buy feed from Amazon or Walmart, but you may want to buy in bulk. When comparing a 40 to 50 lb bag to a 2,000 lb order, you can save up to $1,000 by buying in bulk based on online pricing.
Check out this blog to learn more about feeding chickens.
You’ll want other equipment, too.
How to start a poultry farm: Other Equipment
You will need equipment based on the chicken products you sell, the space you have, and your budget. Some of the items you might need before you buy your chicks include:
Once you have all the equipment setup, it’s time to find dependable breeders.
Get Your Chickens
It’s time to buy some quality chicks from a reputable breeder. You can buy locally or online, but be careful when buying online. There are two ways to get new chickens and it sounds like a joke. You get to choose between the chicken or the egg.
Geoff told us:
Based on my research, it seems that eggs and chickens sell for about the same price, which means you are better off with the chicks. If you decide to expand your business to incubate your own eggs later, you can potentially increase your profit. You’ll need to learn poultry science first, though.
Some breeders are more honest than others, so make sure they have a guarantee. You might also ask if they have an American Poultry Association flock certification.
Some of the ones consistently mentioned include:
- Jenks: Business success is often measured by profitability, but longevity is also important. As the longest operating poultry company supplier, they know they understand the poultry farm business.
- Cackle Hatchery: If you are looking to buy from only one supplier, Cackle is probably the place. They sell pretty much everything you need for raising and selling chickens. Plus, they’ve been around for over 80 years.
- Privett Hatchery: If you are on the west coast, you might consider getting your chickens from Privett. It’s in New Mexico making it more convenient for a farmer located in the southwest United States.
You can find more breeders and fertile egg suppliers on Chickens and More.
Step 6. How to Run a Chicken Farm
Poultry farming is a delicate business. You have to:
- Feed your birds the proper nutrients: We discussed this in the section on feed. This will help promote chicken health.
- Treat against poultry diseases: If your flock catches a chicken disease, you need to separate the sick ones and care for them. You may also have to hire a vet. Learn more about diseases chickens catch.
- Protect against predators: We discussed this during the section on design.
- Dispose of their waste: You’ll need a waste disposal system to help keep the chicken coop clean.
- The deep litter system is a method of composting inside the coop.
- You can also use an automated system.
Geoff and John use manual processes. They told us:
- Treat against poultry diseases: If your flock catches a chicken disease, you have to separate sick ones and care for them. You may also have to hire a vet.
- Maintain documentation of care: You’ll need a great system to document your date of purchase, care, date of processing, and more. Check out USDA documentation requirements.
Author’s note: During my experience in the building automation industry, I found that automated systems make documentation of anything much easier. When you can easily check a log to see when feed was distributed, water consumed, temperatures, and other relevant data, it is much easier to comply with government regulations.
Step 7. Process the Birds
Once the birds have matured to an age you can sell them (typically six to 20 weeks), you need to turn them into meat. Most people will do this using an external processing company, which we discussed in the industry overview, but Geoff and John do it themselves. They told us:
And I don’t wanna be distracted by explaining to the county about our storage tanks… In the end, I think it (hiring a land-use consultant) probably would’ve saved us a lot on (the) schedule.
And I don’t wanna be distracted by explaining to the county about our storage tanks… In the end, I think it (hiring a land-use consultant) probably would’ve saved us a lot on (the) schedule.
Step 8. Sell the Chickens or Eggs
There are several ways for a poultry farm business to sell their chickens and eggs. The business can sell its products to:
- Consumers: Reach this target market through websites, social media, your own retail location, and farmers’ markets.
- Restaurants: Get in touch with restaurant owners through similar channels as consumers but also through trade organizations.
- Poultry processors and wholesalers: Join trade associations or keep reading to find out how to farm for Perdue or Tyson.
How to start a chicken farm for Perdue
If you want to learn the benefits of poultry farming with Perdue, check out the links on their poultry initiatives. As a Perdue farmer, you get access to:
They’ll guide you through the process of how to start a poultry farm for Perdue.
How to start a chicken farm for Tyson
If you’re wanting to contract with Tyson, check out their prospective farming partners page. They use guidelines from the University of Georgia and contract with more than 6,000 contract farmers. Contact the nearest live operations manager if you’d like to discuss how to start a poultry farm with Tyson.
How to start a chicken farm to sell eggs
Egg-selling poultry farms have many of the same requirements as broiler farms, but they are focused on getting the most eggs per unit of feed. You’ll be trying to keep your chickens healthy for a longer period of time because layers often start egg production near 20 weeks and can produce eggs daily for three to four years.
Step 9. Other Business Functions
In addition to the basic equipment and chicken care, you’ll need to have your systems in place for standard business operations like:
Fortunately, John and Geoff gave us a ton of information on what they use to operate their business selling broiler chickens.
How to start a poultry farm: Hiring
Marion Acres, LLC emphasizes two aspects when hiring:
- Skill: Do they at least somewhat understand the job?
- Personality: Are they fun to be around? Similar values? Work Ethic?
For processing employees, they told us:
They also explained most other positions are easily filled with walk-ins and “now hiring” signs.
How to start a poultry farm: Accounting
Marion Acres uses a variety of tools for accounting. John told us:
You can connect QuickBooks to most software, so you might be able to integrate it with other software you love. Geoff and John told us:
Make sure you understand your accounting processes because you’ll need to have sufficient funds or be well documented for the farm programs. Learn about other accounting software for farmers and have a professional accountant help you set it up properly.
How to start a poultry farm: Marketing
John discussed their marketing strategy with us:
We use Wix, which is very user-friendly, and a very simple platform. It just uploads some pictures and types in some things and they make it look good. So kudos to Wix. The team that manages that also manages the inventory.
We use Wix, which is very user-friendly, and a very simple platform. It just uploads some pictures and types in some things and they make it look good. So kudos to Wix.
The team that manages that also manages the inventory.
Marion Acres uses social media because it’s so powerful. Check out their Instagram and LinkTree. Like most business owners, they have found that their search engine optimization is what truly helps drive awareness.
They also mentioned that customer service is a big part of their value. They treat people like family and have a beautiful view with picnic tables. Geoff and John have created such a pleasant experience that some customers come almost daily.
Go start your own business!
Chicken is a staple of most people’s diets. Now you have an idea of how to start a poultry farm, so take a training course with poultry farming for beginners, buy some baby chicks, and get farming today!
Which type of farming would you rather do, broilers or egg-layers?