How to make money raising chickens

Note: this is a condensed version of the presentation done by OPN at the 2026 OSU Small Farms Conference. So if you missed that, this will help get you caught up.

If you are raising poultry as a business, this may be the most important article you ever read. This is no click-bait “farm hacks” story, so get your thinking hats on to learn about a revolutionary new tool created by OPN that can take your poultry business to the next level.

When most farmers start selling products, they often get stuck on the “How much do I charge?” question. They often get to an answer by asking more questions:

• Do I set a low price to attract customers?
• Do I set a high price to highlight the premium nature of my product?
• Do I go a little higher, or a little lower, than the grocery store?
• Do I go a little higher, or a little lower, than other pasture based producers?

 Don’t feel bad if this is how you established your prices, as almost every one of us have used this thought process. Market research is important, and should play a part in your eventual decision, but all of this misses the critical question, “Am I making any money?”

The answer to that question is a little more complicated than most new producers (and many experienced producers) account for. You probably do a good job of tracking expenses like; the purchase of chicks, feed costs, market fees, egg cartons, and the like. You then compare that to your total income to determine profitability, right?

This method is like reading a book with half the pages ripped out, you are not getting the whole story. So, how do you access the rest of the pages in the book?

Let’s dive in.

Things like feed, chicks, egg cartons, labels, etc. are called direct costs (or variable, as in the chart below)- or expenses that rise in direct proportion to production. For example, if you add one more chicken, you need to purchase one more unit of food.You’ll also need to buy that chick, get more egg cartons, or shrink bag and label if it’s a meat bird. For most people, these types of expenses are easy to track.

But there is a whole other category of expenses that is equally important, but is all too often ignored or not included in profitability calculations. These are called overhead costs (fixed costs in the chart above), and are defined as expenses that do not have a direct correlation with production. For example, you are not going to add a new tractor, or additional acres of land, just because you increased your flock size by 20%. Think about things like: equipment, land, labor, utilities, marketing, distribution, bookkeeping, membership fees, and on and on. There are likely many more line items in overhead costs than in direct costs, so all the more important to not ignore them. 

Consider all the things that can fit in that category on your farm, whether or not you are paying for them directly. If you own your land, you may not be charging the farm to “rent” it from you, but you should include that as a non-cash overhead expense. Even if you are not collecting a paycheck, include an amount that it would cost you to hire someone to do everything you do on the farm. Do your best to add up every type of overhead expense on your farm for an entire year, and divide that by your total revenue. This gives you an important number called the overhead percentage. 

So where does profit come in? It can be included in your overhead percentage. Let’s say you calculate your operational overhead at 44%, and you have a profit target of 8%, your total overhead would be the sum of those, or 52%. It is also critically important to remember that your pay does not come out of profit. Profit is what the business makes after all costs, including your paycheck, are covered. 

This is so important, we are going to repeat it: your paycheck is a business expense, if you are not making enough to pay yourself, you do not have a profitable business. 

What do we do with these numbers? We are glad you asked. All of that figuring that ended up in that one number, total overhead percentage, becomes an important figure in OPN’s new suite of powerful calculator tools. 

Whether you are raising poultry for eggs or meat (you can toggle between them in the upper right corner of the calculator page – the stock density calculator is for grazing and a topic for another blog post), these tools will take all of your direct costs, overheads, and then combined with information about your operation, will calculate the price you need to charge to achieve your target profitability. 

Here are some important points to consider when entering your data:

• Make sure you enter a wage for yourself, even if you are not giving yourself a paycheck right now. 
• Several categories ask for the average amount of time you spend on a task; you may need to do a time audit of your daily activities. This number should be an average over the course of a year or season.
• Some of the variables can be considered independent, while others are dependent on other categories. For example, inputs like labor rate per hour or the number of eggs a breed lays in year one are independent – they can be changed without needing to make a change in another category. But if you change something like the number of chickens in your flock, especially if you change it dramatically, other categories are dependent on that and will need to change, too. You will likely need to go buy feed more often, and your time in the brooder, the field, or distribution might change, too.
• These calculators take some costs that might be considered overheads and treats them similar to direct costs. These are only things that are specific to a poultry enterprise, though, like processing equipment, chicken tractors, and labor that is specifically related to poultry production. 
• If you don’t know your overhead costs yet, it is set to default to 50%. That number would be considered a bit high for most industries, but many small farms have relatively high overhead costs compared to revenue, so 50% is a reasonable number to use here. 
• Feed costs are calculated differently for layers and meat birds. Layer feed is calculated using dollars per unit of feed (by the bag, ton, etc) and the average amount of fed feed per day. You will need to weigh your daily feed amount and divide by the number of birds you have. The calculator range only goes from 4 to 6 ounces per bird per day, if you are outside that range, you might consider making some adjustments. Broiler feed is calculated by looking at your annual feed cost, and the number of birds you finished. It was done this way to account for mortality in the field – if a bird dies one week before harvest, you still paid to feed it most of its life, so your annual feed bill accounts for that, and then the cost is spread over the number of finished birds you have.

Key Takeaways:

• Scale is important. Raising the most birds you can, with the facilities you have, and generating a product you can feasibly sell, makes the most efficient use of your time and investment.
• For laying hens, breed matters, A LOT! Play with the calculator, changing only the expected number of eggs a breed is expected to lay in year one. Compare a heritage breed that might lay 225 eggs per year to a more production-oriented breed that will lay 300 per year, and you’ll see a huge difference in price. Using all the other default numbers, the heritage breed will require you to charge $10.41 per dozen to be profitable, while the higher lay rate birds will only require $8.00. Which do you think you’d have an easier time selling?
• How long you keep your layers matters. Their production will decrease each year (this calculator assumes a 20% decline each year), and keeping them any longer than two years significantly increases the price you need to charge. If you keep your birds for three or four years, the calculated price is what you need to charge for every dozen their entire life, even in years one and two. 
• Have a plan for culling your old hens. Any revenue here is like a bonus and has a real impact on your calculated price. Whether you sell them live, or as processed stew hens, even $10 net, has a 40 to 50 cent impact on what you need to charge for every dozen over their entire life. 
• Infrastructure – You may be hesitant about investing in expensive equipment, but quality equipment that increases efficiency and lasts a long time, has very little impact on the price you need to charge. So, if you know you are in this for the long haul, make the investment in quality equipment. For example, compare two DIY processing setups, one that costs $3,000 and one that costs $10,000. The more expensive equipment will increase efficiency, allowing you to do more birds in less time, and those labor savings could amount to $1.50 per pound you need to charge. 

These tools were made possible by using the knowledge gained from attending the Ranching for Profit school, and we here at OPN feel strongly that it is the best farm business training program in existence. That is why we are working with them to bring the school to Oregon for the very first time in their 40+ year history. Like the investment-quality equipment mentioned above, making this investment in yourself will provide returns for your business for the rest of your farming career. Please consider joining us in Bend, October 26-31, 2026.