2004 Annual Poultry Report: Demmel Farm

Perkins County , Nebraska

2/1/05

Introduction

This report has been prepared by Dennis Demmel, farm operator. The Demmel Farm has raised pasture poultry since 1997, marketing processed chickens directly to local consumers. The operation has been a business of Demmel children, Paul, Sarah and Laura. Laura is the current owner and manager of the Demmel Farm Poultry Division. The operation uses grass, buildings and equipment already available on the farm, so capital investments are very minimal with this “stacked enterprise”. Birds are raised in a brooder house the first 4 weeks and on grass in portable pens for another 4 weeks. The chickens are slaughtered off farm at a USDA certified “custom exempt” facility near Sutherlund , Nebr. The portable pens of the system contain 100 birds and are moved 2-3 times per week. Birds are allowed “free range” during the day. “Limit feeding” is used during the day. Volume of the operation has steadily increased over the years to 1600 birds in 2004. Customers pick up processed birds at the farm and are charged $7.50 per bird rather than per pound for simplicity purposes. This report covers observations on primarily the 2004 season, with comments on future operation considerations. The report is based on observations rather than scientific analysis.

Summary

Feed processed on the farm can be a lower cost alternative to purchased bulk feed when milling equipment is available. In addition, quality is likely improved when grains are grown under sustainable management. This is important to quality for the consumer.

“Limit’ feeding has stimulated greater foraging when using free range systems, and bird quality has been excellent.  Feed efficiency has been favorable.  Evidence indicates that vegetative intake is high.  Adequate feeder space is likely important to uniformity of bird size at slaughter. Medication for starter ration has been eliminated with no negative effects.

Return to labor is excellent in this enterprise.  Feed cost is 30-40% of total cost.  Little capital investment is required, unless the business is scaled up considerably.

Free range during the day is considered important to avoid heat stress and to allow more foraging. Predators have not been a significant challenge. Lack of slaughter facilities probably inhibits the expansion of the pasture poultry industry. Public policy change concerning regulations, financial incentives and technical support could well influence greater utilization of pasture poultry operations.

2004 Pasture Poultry Observations

Feed Costs & Ingredients

A major change in 2004 was to eliminate medication in the starter ration which is purchased in bags for convenience.  (A 23% protein starter ration makes up about 10% of total feed use.) The change resulted in no negative results and many customers prefer the non-medicated ration.

For this operation, feed costs have steadily dropped over the years, as the farm moved from bagged feed to bulk feed. Eventually farm raised grain milled on the farm has been used for the finish ration. 2004 feed costs were up about 10% from the previous year primarily due to increases in grain prices. In recent years, feed costs have dropped from $2.10 to $1.25 per bird with a cost of $1.37 per bird in 2004. Farm raised grains are considered to be of better quality over bulk feed purchases, since grains are raised under sustainable practices. Extruded soybeans have been used in recent years. In 2005, the ration will use soybean meal instead. Extruded soybeans have a higher fat content and it is not known if that is beneficial. Experience on this farm indicates that feed does not seem to go rancid when using the extruded soybeans when stored for several months, although warnings in some publications have raised concerns about this factor. The ration also includes corn and wheat in addition to fish meal and vitamin/mineral supplements. Millet is another alternative in this western region and can be used up to 30% of the ration. Currently corn is cheaper. Coarse milling is preferred.

Feed Efficiency and Limit Feeding

 In recent years, feed has been limited to approximately 30-32 pounds per day for a group of 100 birds during the last several weeks of production. Feeders are empty by mid-day.  We feel that this “limit feeding” stimulates more foraging of the birds outside of the pens. Although some producers report weight loss due to chickens running around in a free range environment, we do not believe this is a major issue. Exercise probably improves muscle tone and, along with the “limit feeding”, is considered a factor in lowering the risk of overfeeding and lameness. Feeder space is a consideration during the last couple of weeks as the birds are larger and more crowded.

During 2004, feed consumption was approximately 11 pounds per bird.  A random sampling of birds at slaughter showed an average of about 4.3 pounds per bird. Since birds are sold by the bird, rather than by the pound, total weight is not available, although some extra effort here could provide a more scientific analysis.  Using the 4.3 pounds per bird, the consumption is estimated at 2.6 pounds of feed per pound of gain. University of Wisconsin researcher David Trott recently reported in the Stockman Grass Farmer, October, 2004 that “indoor broilers had similar feed efficiency to the outdoor broilers (average was about 2.35 lb. feed per pound of gain)”. Therefore, the Demmel feed efficiency seems to be slightly higher than other analysis, although these are crude numbers and less than scientific.

Pasture grass should be short enough for poultry consumption and growing. The grass sometimes requires mowing prior to poultry utilization. Grazing with cattle would be a better approach. The chickens do consume considerable amounts of grass and weeds. They really like legumes such as alfalfa.  An examination of gizzards at slaughter in October indicated considerable vegetative content.  Since pens are moved only several times per week, the sleep area of the pen is raked by hand after pen moving to break up the chicken waste “pad” so it does not seal off the grass.  The waste is also spread out to avoid “burning” the grass. A tractor harrow would perhaps simulate this aeration process in larger operations. This farm has irrigated winter wheat with a clover legume that has been considered as a late season pasture for poultry after harvest. With the stubble mowed or grazed, the volunteer wheat and clover would be good grazing for the chickens.

Gross Profit

Customers are charged $7.50 per slaughtered broiler, which is bagged and ready for the freezer. Feed expense is one of the larger costs, accounting for 30-40% of the total cost. Since the poultry enterprise is a “stacked” enterprise utilizing existing grass, buildings and equipment, the “gross profit” is favorable with other enterprise opportunities.  Profit per bird has been over $3.50 per bird in recent years. Feed costs were about 10% higher in 2004. Chicks are purchased for just over 60 cents per bird delivered to the local post office from a Madison , Nebr. Hatchery. Along with feed cost, slaughter cost is also a major expense. The business realizes a good return to labor and capital. Very little capital is needed in the operation. Several time studies have been conducted with regard to time involved in management labor. The return to management is over $20 per hour.  If the business were to be expanded, more time would be required in advertising and marketing. Here, advertising is primarily by word of mouth. Joel Salatin, according to some sources, has suggested that 40% of time is required in marketing for a larger enterprise, which would be much higher than in this small business.

Uniformity of Bird Size and Age at Slaughter

The operators of the slaughter facility, that conducts slaughter of the Demmel broilers, are very impressed with the uniformity of size of the birds when compared to other producers. Producers that have groups of birds that are over 100 birds/pen seem to have greater variation in slaughter size. The Demmel Farm birds ranged in size after slaughter in October, 2004 from 3.25-5.6 pounds, with an approximate average of 4.3 pounds, based on random weighing. This seems short on uniformity, but reportedly is better than others, as indicated previously. One improvement on this farm would be to provide more feeder space during the last two weeks of production so that all birds have equal access to limited feed.

 In 2004, one group of the chickens was slaughtered at 7 weeks to determine if slaughter at a younger age was feasible, even when feeding extra feed the last several weeks.  The results were less than satisfactory. Eight weeks is now the rule for maturity.

Heavy Pens Utilized

The pens used on the Demmel Farm are 10 X 10 ft square and made of old steel gates used previously for a hog operation that was discontinued. Most operations utilize light wood or PVC pipe to make pen moving a simple task for even the youngest of a family member. However, high winds in this region require heavier pens. Dolleys are used to move the pens. For a larger operation, it is thought that a small tractor and loader could be utilized to move heavy pens, especially after morning pen opening and feeding when the birds would be out of the pens. The best approach would be backing up away from the birds. A hook on top of the pen would be preferable for the loader to easily engage without chains, etc.

In this operation, the “open” side of the pen is often turned toward the sun and away from the wind in cooler weather, and dollies are used to adjust the direction to provide adequate comfort.

Several years ago, side doors were added to the pens to allow for free range during the day. This was a necessity to allow the birds to spread out during hot weather and to utilize shade of trees or other shade. This provides exercise for the birds and more fresh air. In addition, capacity was increased 33% from 75 to 100 birds per pen, since the pens are primarily occupied during cool nights. Watering is provided both inside and outside of the pens. Feeders are placed outside of the pens except in the first days the birds are placed on pasture, when the side doors remain closed until the birds are fully acclimated to the facility. As the birds get older, they will wonder great distances to forage for food; however, they seem to always know where “home” is at night, even if they may get close to other chickens from another pen. All birds are usually back in pens before dark when doors are closed.

Pens are best located away from low areas where water can accumulate in case of heavy rains. Straw placed on the ground has been used temporarily within pens to provide dry conditions in extremely wet weather. In hot weather, some poultry growers run water under the birds to help keep them cool.

Chickens are loaded onto a stock trailer with a double deck arrangement for transport to slaughter. However, loading can provide some stress to the bird. One attempt was made at loading at night when the birds remain less active. This works well the night before slaughter. However, pens with a taller ceiling or movable top cover would allow for ease of lifting the birds out of the sleeping area. Chickens do not move easily in the dark, but they are easy to catch. Currently, birds are normally moved from the low-roofed pens to an outer catch pen for easier loading during the day.

Predators and Bird Hospital

Predators have not been a major issue for the Demmel Farm poultry business, although animals like coyotes exist in the area in fairly high populations. However, the birds are grown on grass that is near to the farmstead, which may inhibit wild predators.  The farm is not near a river or stream which reportedly increases such predators. However, this past season, a farm cat was found to be killing birds and had to be destroyed. Pens, as indicated, are closed at night. For high predator areas, pens may need to be closed during the day or an electric “netting” would be used to keep out predators from the grazing area.

In 2004, a “hospital” was contrived as a small pen in a shop building for birds that became lame or had other afflictions, so that they would not have to compete with healthy birds for adequate water and feed. Birds that may have gotten a cut or laceration can be a subject of cannibalism by other birds, but can be returned to pasture pens after healing. This all requires careful observation by the flock manager.

Future Considerations & Comments

 Any future expansion would likely require more expense in advertising and marketing.  Press releases are welcomed at local papers when a news-worthy change in operation occurs, such as expansion or change in management. Expansion may require higher capital investment in equipment, perhaps a slaughter facility. Surveys of buyer interest would be valuable to this operation. Customers may wish to comment on preferences of processed bird size after processing, charge by the bird or pound, taste and fat content, dislikes, etc.

Every community should have a local pasture poultry operation. What seems to be an inhibiting factor is the access to slaughter facilities, rather than return on investment in labor and capital. The question seems to be related to what communities need for facilities. Should such a facility be on-farm, or be at the local multi-species slaughter facility, or be in the form of a portable operation? These are questions related to public policy review and related to public incentives designed to stimulate pasture poultry and direct marketing. Changes in regulations, more technical support and perhaps financial incentives, as from “value added” programs, would be beneficial to stimulating growth of the small pasture poultry industry.

                 

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