broiler production
1st Annual International Interdisciplinary Conference, AIIC 2013, 24-26 April, Azores, Portugal
- Proceedings-
BREAK EVEN ANALYSIS OF BROILER PRODUCTION IN THE
ACCRA-TEMA AND KUMASI AREAS
Mahama, E.A.
Agricultural Research Centre, University of Ghana, Legon
Andah, E.K.
Amegashie, D.P.K.
Mensah-Bonsu, A.
Dept of Agricultural Economics & Agribusiness, University of Ghana, Legon
Abstract:
The paper examines the profitability of broiler production, using the break even concept. The break even quantities, net present values and internal rates of returns have been estimated for 20 selected poultry farms. Poultry farms located in Kumasi area broke even in the production of broiler while about 38.5 percent of the farms in Accra-Tema area produced below their break even levels.
Only 30 percent of the farms registered positive net present value. Under an interest rate scenario of
25 percent about 70 percent of all farms, would be profitable (break even). The results suggest that lower interest rate is essential for more farms to break even (be competitive) and stay in the poultry business. Key Words: Break even, interest rate, installed capacity, broiler production, Accra – Tema and
Kumasi areas
Introduction
Poultry production, especially broiler production is a big business throughout the world today.
It has become a standard form and source of cheap protein. It is also a competitive industry in the developed world and fast becoming so in the less developed countries. With continued population growth, urbanization, income growth and changes in lifestyles and food preferences, it was projected that meat demand in the developing world will double between 1995 and 2020 to 190 million tons and increase by 25 percent in developed countries to 122 million tons (Delgado et al, 1999). Demand for meat will grow faster than cereals in the developing world by 2.8 percent per year for meat compared with 1.8 percent for cereals (Pinstrup-Andersen
- Proceedings-
BREAK EVEN ANALYSIS OF BROILER PRODUCTION IN THE
ACCRA-TEMA AND KUMASI AREAS
Mahama, E.A.
Agricultural Research Centre, University of Ghana, Legon
Andah, E.K.
Amegashie, D.P.K.
Mensah-Bonsu, A.
Dept of Agricultural Economics & Agribusiness, University of Ghana, Legon
Abstract:
The paper examines the profitability of broiler production, using the break even concept. The break even quantities, net present values and internal rates of returns have been estimated for 20 selected poultry farms. Poultry farms located in Kumasi area broke even in the production of broiler while about 38.5 percent of the farms in Accra-Tema area produced below their break even levels.
Only 30 percent of the farms registered positive net present value. Under an interest rate scenario of
25 percent about 70 percent of all farms, would be profitable (break even). The results suggest that lower interest rate is essential for more farms to break even (be competitive) and stay in the poultry business. Key Words: Break even, interest rate, installed capacity, broiler production, Accra – Tema and
Kumasi areas
Introduction
Poultry production, especially broiler production is a big business throughout the world today.
It has become a standard form and source of cheap protein. It is also a competitive industry in the developed world and fast becoming so in the less developed countries. With continued population growth, urbanization, income growth and changes in lifestyles and food preferences, it was projected that meat demand in the developing world will double between 1995 and 2020 to 190 million tons and increase by 25 percent in developed countries to 122 million tons (Delgado et al, 1999). Demand for meat will grow faster than cereals in the developing world by 2.8 percent per year for meat compared with 1.8 percent for cereals (Pinstrup-Andersen
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