A QUANTITATIVE ANALYSIS ON FACTORS AFFECTING PROFITABILITY OF SMALL SCALE BROILER PRODUCTION

Abstract

The purpose of this study was to demonstrate the use of the profit function regression model as a decision support tool in small scale commercial broiler production. The study was carried out in major broiler production areas in Sri Lanka. Data were collected form 120 broiler rearing farmers. The factors considered in the model were Sale price of broiler (SLR/kg LW), Price of purchased chick (SLR/chick), Price of feed (SLR/kg), Cost of labor (SLR/kg LW), Cost of veterinary service and medicine (SLR/LW), Feed Conversion Rate - FCR (kg feed consumed per kg LW gain). As observed in the field, the most important factors affecting profit in this study were the feed conversion ratio and the price of feed. It was also found that except the cost of labor all the other factors were significant in the model and thus were the determinants of the profitability. The fact that the estimated impact factors affecting profitability on the profit per kg live-weight were similar to those observed in the field indicates the power of the model as a decision support tool in broiler production.