Table of Contents

Preface Acknowledgement Introduction Tables Figures

Pages
i ii iii iv v

Chapter 1
Project Summary
Name of the Enterprise 1 Location 2 Descriptive definition of the Project 3 Projects Long Range Objectives 5 Feasibility Criteria 6 Highlights of the Project 7

Chapter 2
Market Study
Name of the Product 11 Composition and attributes of eggs 11 1

Other Uses of the Product 17

Major Users of the Product 20 Historical Demand Historical Supply 21 22 23 23 24 25 28

Demand and Supply Analysis Market Share Historical Price Marketing Costs Marketing for Eggs

Chapter 3
Technical Study
The Product 31 Quality Maintenance 32 Factors affecting egg production 35 Egg Production Cycle 40 Production Planning Equipments Farm Lay-out 49 Production Costs 52 42 47

Storage of Eggs Transport of Eggs

55 56

Chapter 4
Financial Study
Major Assumptions 57 Income Statement 61 Projected Income Statement 62 Cash flow Statement 63 Projected Cash Flow Statement 64 Balance Sheet 65 Projected Balance Sheet 67 Financial Ratio Analysis 68

Chapter 5
Socio - Economic Study
73

Chapter 6 Management Study

Management of the Layer Farm 74 Flock Care and Management 79 Sanitation and Waste Management 81 Form of Ownership 82

Tables
Table I - Historical Demand Table II - Projected Demand Table III - Historical Supply Table IV - Projected Supply Table V - Unsatisfied Demand Table VI - Market Share Table VII - Historical Price per Tray Table VIII - Marketing Costs Table IX - Total Cost for a Production Cycle Table XI - Temperature and its effects on egg production

Table XII Sizes and Mass of Eggs Table XIII - Production schedule Table XIV - Production planning Table XV - Farm Equipments and Costs Table XVI - Materials Needed for Farm Construction Table XVII - Expenses for rearing Table XVIII - Costs for a production cycle 1st year Table XIX - Production Assumption Table XX - Expense Assumption Table XXI - Revenue Assumptions Table XXII - Income and Costs for a production cycle 1st year

Figures
Figure 1 - Egg Composition Figure 2 - Direct marketing Figure 3 - Lighting schedule Figure 4 - Egg weight increase according to age of layer Figure 5 - Percentage of productive laying flock over a period of time Figure 6 - Number of eggs produced over a period of time Figure 7 - Floor Plan Figure 8 - Front Face of the Farm Figure 9 - Cage Size

Chapter 1 Project Summary

A. NAME OF THE ENTERPRISE
Jamz Supreme Eggs is owned by Mr. Jeffrey D. Janeo. The name of the business was derived from the name of the owner and his long time partner Mae Ann P. Bahinting. J stands for Jeffrey, a is and, and m is Mae Ann. Letter z is just an additional letter to make it more unique.

Supreme in the sense that the business aims to be well known to their costumers defeat its competitors by producing quality products

and maintain its supremacy to them. The owner is optimistic to be successful in this chicken laying industry.

B. LOCATION

The location of the business is located at Purok #3, Brgy. San Jose, Sto. Tomas, Davao Del Norte. It is in the backyard of the owner. It is also located four kilometers away from the public market. The location of the farm also is located far from the residence of the place to avoid bad smell of the chickens waste. Water and electricity is also available in the area which are very important in the operation.

In terms of transportation, the business firm can use the farm to market road which is the project of the government. The said road project is from the business firms location going to Fd. Rd. #5, Sto.

Tomas, Davao Del Norte. The road is conducive in delivering the products and can ensure that there will be no cracked eggs delivered. The farm is also located in an isolated place that will minimize the risk of disease.

C. DESCRIPTIVE DEFINITION OF THE PROJECT 1. Related national programs

Jamz Supreme Eggs is in line with the Department of Agriculture program, the poultry, piggery, duck raising and fruit and vegetable farming activity. The said government agency are encouraging entrepreneurs to engage into agricultural business and giving them tips and effective strategy on how to manage it in a proper way. It is also in line with the Philippines Agricultural Training Institute abbreviated as ATI, is an agency of the Philippine government under the Department of Agriculture responsible for training agricultural

extension workers and their clientele; conducting multi-level training programs to promote and accelerate rural development; and ensuring that research results are communicated to the farmers through appropriate training and extension activities. The ATI is ISO 9001:2000 certified.

2. Affinity to the regional or sectoral studies

Jamz Supreme Eggs helps many sectors in the region or in any other sectors which droves gain to them including wholesaling and retailing of the product. Like the department stores, sari-sari stores, and restaurants. The business firm is assuring that all the laying chickens are healthy and disease free, in such a way all sectors in the community will continue to patronize the product because they were sure that it has a good quality.

3. Project Potential and Proponent

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Chicken eggs are widely used in many types of dishes, both sweet and savory. Eggs can be pickled, hard-boiled, soft-boiled, scrambled, fried and refrigerated. They can also be eaten raw, though this is not recommended for people who may be especially susceptible to salmonella, such as the elderly, the infirm or pregnant women. In addition, the protein in raw eggs is only 51% bio-available, whereas that of a cooked egg is nearer 91% bio-available, meaning the protein of cooked eggs is nearly twice as absorbable as the protein from raw eggs. As an ingredient, egg yolks are an important emulsifier in the kitchen, and the proteins in egg white allow it to form foams and aerated dishes. That is the projects worth.

The business firms manager and employees who are competitive in their fields are working hard to attain their ones goals and objectives and produce quality products as well.

D. PROJECT LONG-RANGE OBJECTIVES

Jamz Supreme Eggs is expecting to be more successful in its 10years of existence. The chicken coop size will be expanded 3 times its first size. The volume of the laying chickens will also be tripled, in such a way the production will raise. There will be office workers and 10

utility workers added to help unemployed citizen in the community. And to help the economy in the sense that the tax will raise if the project will be bigger. Jamz Supreme Eggs aims to operate not just in Sto. Tomas but in the whole Mindanao, the firm also aims to engage into other farming activities like broiler raising, duck raising and goat raising.

Channel business profits to help fund other community facilities, such as schools or churches. Improve environmental, agricultural, and business awareness and understanding in the area.

E. FEASIBILITY CRITERIA
Technological Technological feasibility measures the practicality of a specific technical solution to the problem. It is also a measure of the availability of technical resources and expertise. Operational Operational feasibility is a measure of how well the project will work in the organization. How the management address the

11

operations strength and weaknesses. To make the operation at speed, accessibility to the location is also important. Economic Economic feasibility is a measure of how cost effective the proposed project will be. This is often called a cost-benefit analysis. Benefits can usually be estimated during request analysis.

Schedule Schedule feasibility is a measure of the ability of the project to meet proposed deadlines. Deadlines may be mandatory or desirable. Mandatory deadlines are often imposed when the government passes a new law or changes an existing regulation.

F. HIGHLIGHTS OF THE PROJECT 1. History

The owner of the business choose to establish poultry egg production an agricultural business because he noticed that there is no such business established in his hometown Sto. Tomas, Davao Del Norte. There is a poultry egg production in Bobongon, Sto. Tomas, Davao del Norte owned by the Department of Agriculture by Municipality of Sto. Tomas but it was not developed by the said institution and its not that big. The purpose of the business is 12

commonly to earn profit and to help the people in the community by providing job to several unemployed people. That is how the project comes about.

Jamz Supreme Eggs produces quality eggs that are essential for the daily needs and consumption of the people in the society. The owner will do his best to maintain the supremacy of his product to his competitors.

2. Project timetable and status

Description of activities
1. Acquisition equipments. of chicken coop

Timeframe
2 days 1 week 5 days

2. Construction chicken coop. 3. Registration of the business before start up: a. Registration of business name with the Department of Trade and Industry b. Application of Mayors Permit: 13

1. Municipal License 2. Ecological Solid Waste Management Permit 3. Sanitation Permit d. Bureau of Fire Protection Permit 4. Purchase Day-old chicks 5. Start of the Operations 1 day 1 week after the completion of aboves activity

Layer starts giving eggs at the age of 15 to 20 weeks. The operation is recommended to start in the month of February or March. The layer is ready to lay eggs in July/August.

3. Nature of the Industry

Chicken egg production in the Philippines is a minor industry compared to the broiler production sector that takes center stage in the Philippine chicken trade. But the chicken layer sector had the most growth between 2001 and 2002 because of the increase of chicken layers in the country. In 2002 alone, chicken egg production contributed 3% of the total value of agriculture in the Philippines.

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Egg production is the most progressive animal enterprises in the Philippines today. The poultry industry in fact began as a backyard enterprise but has shifted to the formation of very large integrated contract farming operations. The growth of tile poultry industry in the Philippines has indeed been impressive but its problems including inefficient management and the prevalence of many destructive poultry diseases and parasites cannot be ignored. With the current socio-economic problems in the country, the chicken egg is one of the cheapest food products that are vastly available in the market. The chicken egg is also considered as one of the most complete food sources with high nutritional value. Chicken egg production in the Philippines mainly serves the domestic market.

4. Mode of financing
The capital of the business will be come from the owners equity.

5. Investment Cost

Costs Chicks (125x50)

Pesos 6,250

15

Feeds Housing Vaccinations Equipment Total costs

10,500 10,651 2,000 1,300 30,701

Chapter 2 Market Study

A. Product Description 1. Name of the Product
The chicken egg is most correctly named as Gallus gallus domesticus. Gallus gallus is the wild form. The name Gallus domesticus is also used. 16

A. Composition and attributes of eggs An egg consists of shell, membrane, albumen or white and yolk. The shell. The shell of an egg has a rigid yet porous structure. The porous shell has great resistance to the entry of micro-organisms when kept dry and considerable resistance to the loss of moisture by evaporation. The color of the shell, which may be white or brown depending on the breed of the laying chicken, does not affect quality, flavor, cooking characteristics, nutritional value or shell thickness. Shell membrane. Inside the shell there are two membranes. The outer membrane is attached to the shell; the inner membrane is attached to the albumen or egg white. These two membranes provide a protective barrier against bacterial penetration. Air space. An air space or air cell is a pocket of air usually found at the large end of the egg interior between the outer membrane and the inner membrane. This air cell is created by the contraction of the inner contents while the egg cools and by the evaporation of moisture after the egg has been laid. The air cell increases in size as time passes. Figure 1 Egg composition

17

Source: American Egg Board, www.aeg.org

Egg albumen or white. The albumen of the egg is composed of the outer thin albumen and the inner firm or thick albumen. The outer thin albumen spreads around the inner firm albumen. The inner firm albumen in high quality eggs stands higher and spreads less than the outer thin albumen.

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White fibrous strips. These are twisted, cord-like strands of egg white, known as chalazae, which hold the yolk in position. Prominent thick chalazae indicate high quality and freshness. Yolk. The yolk is almost spherical and is surrounded by a colorless membrane. The color of the yolk varies with the type of feed given to the laying hen. If the laying hen is fed on maize, for example, the yolk will become a bright yellow. The color of the yolk does not affect the nutritional content. The components of an egg weighing 60 grams are made up as follows:

yolk (29%) - 17.4 g white (61.5%) - 36.9 g shell (9.5%) - 5.6 g

B. Nutritional value Eggs are a good source of high quality protein. They provide important sources of iron, vitamins and phosphorus. As a nutritional 19

source of vitamin D, eggs rank second only to fish liver oils. Eggs are low in calcium, which is discarded in the shell, and contain very little vitamin C. Eggs provide a unique and well-balanced source of nutrients for persons of all ages. Hard-cooked egg yolks are of great nutritional value as a major supplementary source of iron for infants. When children reach one year of age they may also be given egg whites. Eggs contain significant nutritional value, which is essential during rapid body growth, and therefore are excellent food for young children and teenagers. Low caloric value, ease of digestibility and high nutrient content make eggs valuable in many therapeutic diets for adults. During convalescence, when bland diets may be required, eggs provide a good nutritious diet. For older people, whose caloric needs are lower, eggs are an easy, inexpensive and nutritious food to prepare and eat. Availability, modest cost, ease of preparation, popular taste appeal and low caloric value give eggs a primary advantage for human nutritional needs.

C. Shell quality: texture, color, shape and condition

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The ideal shape of an egg as established by tradition and by practical considerations. Shell quality characteristics that must be considered are as follows:

cleanliness soundness (unbroken) smoothness shape two most desirable shell qualities, cleanliness and

The

soundness, are largely controlled by the production and handling of eggs. Eggs with shell defects should be removed from eggs destined to the retail trade. Clearly, consumers have adverse reactions to cracked or dirty eggs. Even if the cracks in an egg are only visible when candling, the micro-cracks may have serious consequences on quality. These eggs may be sold locally and possibly only a few hours after lay. When the membrane is broken as well as the shell, the contents of the eggs can leak, and therefore the only practicable market outlet is sale as egg pulp. If the eggs are dirty, for example, with blood or feces, consumers will react unfavorably to them. Although shell color is no indication of quality, consumers in some markets may prefer white eggs or brown eggs. In such circumstances, it is advisable to sort eggs by shell color. 21

D. Yolk and albumen quality In quality eggs the yolk should be round, firm and stand up well, and be yellow in color. There is often prejudice against very pale or deeply colored yolks, however, there are some exceptions. In some Italian markets, for example, red yolks are a strong selling point. The yolk should have a pleasant, mild egg odor and flavor and should be surrounded by a large amount of upstanding thick white with only a small amount of thin white. The egg white should have the normal slightly green-yellow color, though it may be slightly cloudy in appearance. Consumers are generally very critical of any abnormal conditions in the egg yolk and white. Factors that may cause loss of quality are as follows:

natural factors temperature humidity time handling storage tainting

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2. Other Uses of the Product

A. Egg for the Face:

Egg can reduce the puffiness under the eye. Apply thin film under the eye and allow to remain for 10-15mins.

Egg white mask can make the pores appear almost invisible right away. Just apply the Egg white to a clean damp face and make it stay for 10 min (sensitive and dry skin) and 20 minutes (normal to oily skin).

Egg mask can make the skin tighter and firmer. Egg yolk mask is ideal for those with sensitive and dry skin. Egg yolk is rich in vitamin A that is a strong anti-wrinkle vitamin.

Egg mask is ideal for irritated skin, because it contains amino acids that help nourish skin cells to reduce inflammation.

B. Restore Radiance to Stress and Damaged Hair.

Excessive exposure in the sun, pollution and chlorine from the swimming pool can wreak havoc on your hair. To revive dry and 23

damaged hair, combine 1 egg yolk, 1 tbsp of olive oil and 1 cup of water. Apply to damp hair from roots to tips and let sit for 5 minutes and then rinse with cool water. The yolk is rich in fatty acids and when applied to dry hair will make it shiny for up to a week. This concoction will also fortify hair with healing vitamin A, E and D to combat future damage.

C. Egg white can keep the piecrust from getting soggy.

Fruits are often used as filling on pie recipes, but the juice from fruits can make the crust soggy instead of flaky. To get a perfect crust every time, using a pastry brush, coat the bottom of a prebaked crust with 1 egg white. Let it sit for 2 minutes before adding the filling, then bake as usual. Egg whites contains Albumins a protein compound that form waterproof barrier that prevents fruit juices from penetrating the piecrust.

D. Egg can make your plant stronger.

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To keep indoor and outdoor plants healthy, crush leftover eggshells and sprinkle over the soil. The nutrients-rich shells add the dirt with calcium, a mineral that plants use to build the new cell walls and membranes required for growth. The shells' sharp edges scrape the soft bellies of outdoor pests like snails and slugs, preventing them from snacking on the plants' leaves. Beaten egg is also applied to leaves of indoor plants to make it strong and shiny.

E. Restore the shine of your old leather

To restore the shine of your old and worn out leather, separate the whites of 2 eggs into a bowl. Then use a dry cloth to apply the whites to the leather in a circular motion. The proteins in the egg whites moisturize the material to give it a like-new shape and shine.

F. Egg white can be use as temporarily plug when a car radiator leak.

If there is a minor radiator leak and there is not time for you to bring the car to the mechanic. It happens, the radiator springs minor leak midweek when there's no time to get the car to the shop. To keep the vehicle running until the drip can be fixed, pour 1 egg white into the radiator (through the same opening the coolant goes into) immediately after turning off the car. The heat 25

from the engine quickly cooks the egg, and the solid particles sink into any holes, blocking the leak temporarily. G. Egg white can be use as an alternative to Glue to bind light materials like paper.

To do these just separate an egg white into a bowl, then use a paintbrush to apply egg white in light material that needs to be binded. The proteins in the egg white clump together to bind pieces.

3. Major Users of the Product

Major users of the product are local bakeries, restaurants, cafeterias, groceries, or sari-sari store, higher income families and even lower income families and other regular users. The product also is fit to all ages.

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4. Historical Demand
The data gathered for the total number of household population is from the Municipal Planning Development Office, Sto. Tomas Davao Del Norte. According to them the population increases 1.92% every year. Table I Historical Demand Year Population (Household ) Estimate d % of the populatio n 40% 43% 45% No. of consumer (household ) 26,049 28,540 30,441 Frequency of used eggs/mont h 30 35 40 Monthly Demand No. of Mont ha year 12 12 12 Annual Demand

2007 2008 2009

65,122 66,372 67,646

781,470 998,899 1,217,62 8

9,377,640 11,986,78 3 14,611,53 6

Source of population: MPDO Sto. Tomas Table II Projected Demand

Year 1 2 3 4 5

Projected Demand 14,903,587 15,201,658 15,505,691 15,815,804 16,132,120

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Based on the historical demand data, the projected demand for eggs will increase to 0.02 percent (see Table II for the computation).

5. Historical Supply
The Competitors of Jamz Supreme Eggs are the Jewms Eggs from Panacan, Davao City, D.A Bobongon, Sto. Tomas Davao Del Norte and Mahayag Farms also from Davao City. They are the main supplier of eggs in Sto. Tomas public market. The proponent does not know what is the exact capacity of the suppliers except in Bobongon farm. The proponent makes some estimated capacity of the supplier based on the opinion of the wholesalers and retailers because they could not give detailed information. Table III Historical Supply Existing Suppliers DA, Bobongon Mahayag Farms Jewms Eggs Total 2007 300,000 1,500,00 0 1,200,00 0 3,000,00 0 2008 250,000 1,700,00 0 1,500,00 0 3,450,00 0 2009 230,000 1,800,000 1,600,000 3,630,000

Table IV Projected Supply Year Projected Supply

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1 3,884,100 2 4,155,987 3 4,446,906 4 4,758,189 5 5,091,268 Based on the historical supply data, the projected supply increase in eggs and able to use 0.07 percent in the projected supply, (see Table IV for the computation).

6. Demand and Supply Analysis

PROJECTED DEMAND AND SUPPLY ANALYSIS Table V Unsatisfied Demand Year Total Projected Demand 14,903,587 15,201,658 15,505,691 15,815,804 16,132,120 Total Projected Supply 3,884,100 4,155,987 4,446,906 4,758,189 5,091,268 Unsatisfied Demand 11,019,487 11,045,671 11,058,785 11,057,615 11,040,852

1 2 3 4 5

7. Market Share
The market share is computed based on the capacity of the firm to supply. Table VI Market Share

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Unsatisfied Demand 11,019,487 11,045,671 11,058,785 11,057,615 11,040,852

Proposed Production Volume per year 36,000 39,600 43,560 47,916 52,708

Market Share % .003 .004 .004 .004 .005

8.

Historical Price

History of the Price Table VII Historical Price per Tray

Year
2007 2008 2009 2010

Small
120 123 127 130

Medium
130 133 136 140

Large
137 140 145 149

Extra Large
147 153 156 160

Jumbo
157 163 168 172

PRICING
Usually market demand and supply determine egg prices. It is important to ascertain market prices for eggs and the price trends over a one-year period. Once market prices are known, we will be able to calculate if that price or prices in a market or various markets will

30

cover their costs and give them a sufficient profit. It must be remembered that prices change and that pricing information must be up to date when calculating possible profits. In pricing we must calculate both production costs and marketing costs.

9. Production costs
Refer to Chapter 3 for a detailed description of production costs.

10. Marketing costs

Marketing costs will vary according to the method of marketing chosen. The main operating expenses for marketing include:

packaging and storage; handling; transport; product losses; unexpected costs.

A. Packaging and storage costs. Costs for packaging include the materials used for packaging, which may vary from a simple basket to a carton made of plastic, tie back and labeling. The cost of storing the eggs must also be considered. 31

B. Handling costs. The cost of packaging the eggs, putting them into storage, loading them for transport and unloading them at their destination must all be calculated as handling costs. Each individual handling cost may not amount to much; however, the sum total of all such handling costs can be significant. C. Transport costs. Costs for transport will vary according to the method of transport used and the distance covered. D. Product losses. Product can be lost during the marketing period. There are two types of losses - quality and quantity. Eggs exposed to heat with consequent deterioration are an example of quality loss. Breakage of eggs during transport on a bumpy road is an example of quantity loss. E. Fees, taxes and unofficial payments. It may be that set fees have to be paid, for example, to a local authority for the use of a market stall. Taxes will have to be paid and, in some situations, bribes may be required to pass a roadblock or to access determined markets. These are all costs that must be considered. F. Unexpected costs. It is always important to calculate expenses for unexpected events that may raise costs. For example, it could happen that a road is closed and this may result in a longer distance to be covered to consign eggs. This will raise costs.

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Table VIII - Marketing Costs

Costs Packaging/storage Handling Transport Product losses Fees, taxes, unofficial payment Unexpected costs Total costs

Pesos 500 1,040 1,040 100 220 100 3,000

Table IX - Total Cost for a Production Cycle Production costs Rearing Expense Houses Equipment Feed Labor Vaccinations Mortality Various expenses Total production costs Marketing costs Packaging/storage Handling Transport Product losses Fees, taxes, unofficial payment Unexpected costs Total marketing costs Total costs Price per eggs 5.00 500 1,000 1,000 100 220 100 2,920 114,544 PESOS 19,297 400 200 77,027 6,000 4,800 600 3,600 111,624

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Less: Cost of production and Marketing Net Profit per eggs Formula:

3.15 1.85

Total Costs/no. of days operated/no. of chicken = cost of production and marketing 114,544/364 days/100 Chickens = P 3.15

11. Marketing for Eggs

The greater the distance between producer and consumer, the more complex is the marketing organization required to ensure that eggs reach consumers in the form, place and time desired. The owner chooses the direct marketing. Direct marketing includes the following methods of selling:

sales from the farm (farm gate); door-to-door sales; sales to local retail shops.

Figure 2 - Direct marketing Producer

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Farm Gate

Door to Door

Retail Shop

Consumers

DIRECT MARKETING Egg producers who are situated a short distance from consumers may be able to practice direct marketing. There are four main ways to carry out direct marketing. Sales from the farm Producers may be able to sell eggs directly from the farm (farm gate). This, however, will depend on whether consumers are able and willing to go to the producers facilities. The main advantage of farmgate selling is that the producer may be able to obtain a market price for eggs without incurring marketing costs. The main advantage for the consumers is that eggs will be fresh with little or no quality loss.

Door-to-door sales/street hawking

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Some consumers prefer that eggs be brought directly to their door. This means that the producer must spend time on marketing; however, consumers may appreciate the service and be willing to pay a good price. Furthermore, the producer can take orders directly from consumers and carry only what he/she is assured will be bought.

Sales to local retail shops Producers can also sell directly to local retail shops. This requires some sort of agreement between the two parties regarding constant supply, quality and payment methods. In some cases it may be possible for producers to sell directly to institutional consumers such as hotels, restaurants, schools and hospitals. This type of direct marketing, however, requires negotiation, which may result in a written contract of the duties and obligations of both parties. It also requires continual interaction over time between producer and buyer, a standard egg quality agreement and a constant supply. The producer must carefully evaluate the issues involved including the regular production and transport of large quantities of eggs.

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Chapter 3 Technical Feasibility

1. The Product
An egg consists of: 1. Shell 2. Shell membrane 3. Egg albumen or white 4. White fibrous strips 5. Yolk

2. Other uses of the Product

1. Egg for the Face. 2. Restore Radiance to Stress and Damaged Hair. 3. Egg white can keep the piecrust from getting soggy.

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4. Egg can make your plant stronger. 5. Restore the shine of your old leather. 6. Egg white can be use as temporarily plug when a car radiator leak. 7. Egg white can be use as an alternative to Glue to bind light materials like paper.

3. QUALITY MAINTENANCE
Maintaining fresh egg quality from producer to consumer is one of the major problems facing those engaged in marketing eggs. Proper attention to production, distribution and point-of-sale phases are of vital importance in maintaining egg quality.

4. Production factors
The main production factors that affect quality maintenance are the following:

breed age feed management disease control handling/collecting eggs

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housing

A. Breed. The breed of the laying hen affects shell color; for example, Leghorns produce white eggs, while Rhode Island Reds produce brown eggs. The following egg quality factors are partly inherited: shell texture and thickness, the incidence of blood spots and the upstanding quality and relative amount of thick albumen.

Though it may not always be possible, a consistent policy of selection for breeds by egg producers can bring noticeable

improvements to quality. From 5am to 3pm are the time layers giving eggs. The layers must not be disturbed in their laying house. Avoid cleaning or give feeds or waters within that time. B. Age. Birds typically begin producing eggs in their twentieth or twenty-first weeks and continue for slightly over a year. This is the best laying period and eggs tend to increase in size until the end of the egg production cycle. Birds lay fewer eggs as they near the molting period. In the second year of lay, eggs tend to be of lower quality. C. Feed. Egg quality and composition derive primarily from what a layer is fed. In terms of taste, for example, eggs laid by hens fed on fishmeal will have a "fishy" taste. The type of feed will also influence the shell of an egg and the color of the yolk. Layers must be kept away 39

from certain plant foods if egg color defects are to be avoided. These may include cottonseed meal and the foliage of the sterculiaceae and malvaceae such as mallow weed. Regular access to fresh or high-quality dehydrated green feed helps birds to produce eggs with a uniform yellow yolk. Yellow maize, alfalfa meal, and fresh grass provide good pigment sources for a normal yellowish-orange yolk color. D. Management. Good general management of the laying flock can improve egg quality. If birds are treated correctly and not put under conditions of stress they will produce properly. E. Disease control. Diseases have an effect on egg quality. Infectious bronchitis and Newcastle disease, for example, will cause birds to lay eggs with poor quality shells and with extremely poor quality albumen. Many of the birds continue to lay poor quality eggs even after recovery. Effective vaccines should be administered. F. Handling/collecting eggs. Frequent collection is essential each day in order to limit the number of dirty and damaged eggs and also to prevent the hens from eating the eggs. Careful handling is necessary in order to avoid breakage.

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G. Laying house. The number of dirty eggs produced can be reduced significantly by providing good housing and clean nests for the layers. Cleaning and hygiene operations should be carried out frequently.

5. Factors affecting Egg Production

Typically, a layers production cycle lasts just over a year (52-56 weeks). During the production cycle many factors influence egg production; therefore, the cycle must be managed effectively and efficiently in order to provide maximum output and profitability. The following factors influence egg production. A. Breed. The breed of the laying bird influences egg production. Management and feeding practices, however, are the key determining features for egg production. The owner chooses to use the white leg horn breed.

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B. Mortality rate. Mortality rate may rise due to disease, predation or high temperature. The mortality rate of small chicks (up to eight weeks of age) is about 2 percent; that of growers (between eight and 20 weeks of age) is about 3 percent; and that of layers (between 20 and 72 weeks of age) is about 10 percent. The average mortality rate of a flock is from 15 to 20 percent per year. C. Age. Birds typically begin producing eggs in their twentieth or twenty-first week and continue for slightly over a year. This is the best laying period and eggs tend to increase in size until the end of the egg production cycle. D. Body weight. In general, optimum body weight during the laying period should be around 1.5 kg, although this varies according to breed. Underweight as well as overweight birds lay eggs at a lower rate. Proper management and the correct amount of feed are necessary in order to achieve optimum body weight. E. Laying house. The laying house should be built according to local climatic conditions and the farmers finances. A good house protects laying birds from theft, predation, direct sunlight, rain, excessive wind, heat and cold, as well as sudden changes in temperature and excessive dust. If the climate is hot and humid, for example, the use of an open house construction will enable ventilation. The inside of the

42

house should be arranged so that it requires minimum labor and time to care for the birds. F. Lighting schedule. Egg production is stimulated by daylight; therefore, as the days grow longer production increases. In open houses, found commonly in the tropics, artificial lighting may be used to increase the laying period. When darkness falls artificial lighting can be introduced for two to three hours, which may increase egg production by 20 to 30 percent. In closed houses, where layers are not exposed to natural light, the length of the artificial day should be increased either in one step or in a number of steps until the artificial day reaches 16 to 17 hours, which will ensure constant and maximized egg production. Effective day length should never decrease during the laying period. G. Feed. Free-range hens will produce more meat and eggs with supplemental feed, but only if they are improved breeds or

crossbreeds. The selection of local hens is done on the basis of resistance and other criteria rather than feed utilization for production. Fresh and clean water should always be provided, as a layer can consume up to one-quarter of a liter a day. Figure 3 - Lighting schedule

43

Source: Smith

H. Culling. Culling is the removal of undesirable (sick and/or unproductive) birds, from the flock. There are two methods of culling:

Mass culling, when the entire flock is removed and

replaced at the end of the laying cycle; and

Selective culling, when the farmer removes individual

unproductive or sick birds. Culling enables a high level of egg production to be maintained, prevents feed waste on unproductive birds and may avert the spreading of diseases. 44

I. Climate. The optimal laying temperature is between 11 and 26 C. A humidity level above 75 percent will cause a reduction in egg laying. Figure 2 indicates the effect temperature has on egg production. Table XI - Temperature and its effects on egg production Temperature (C) 11 - 26 26 - 28 28 - 32 32 - 35 25 - 40 Good production. Some reduction in feed intake. Feed consumption reduced and water intake increased; eggs of reduced size and thin shell. Slight panting. Heat prostration sets in, measures to cool the house must be taken. Effects

40 and above Mortality due to heat stress. Source: Kekeocha When the temperature rises above 28 C the production and quality of eggs decrease. Seasonal temperature increases can reduce egg production by about 10 percent. J. Management factors. Effective and efficient management

techniques are necessary to increase the productivity of the birds and consequently increase income. This entails not only proper housing and feeding, but also careful rearing and good treatment of the birds. K. Vaccination and disease control. Diseases and parasites can cause losses in egg production. Some of the diseases are as follows: 45

bacterial: tuberculosis, fowl typhoid viral: Newcastle, fowl plague fungal: aspergillosis protozoan: coccidiosis nutritional: rickets, perosis

Some of the parasites are:

external: lice, mites internal: roundworms, tapeworms

Vaccinations are administered to birds by injection, water intake, eye drops and spraying. Clean and hygienic living quarters and surroundings occurrences. may eliminate up to 90 percent of all disease

6. EGG PRODUCTION CYCLE

Birds usually start to lay at around five months (20-21 weeks) of age and continue to lay for 12 months (52 weeks) on average, laying fewer eggs as they near the molting period. The typical production cycle lasts about 17 months (72 weeks) and involves three distinct phases, as follows.

46

Phase 1: Small chicks or brooders. This phase lasts from 0 to 2 months (0-8 weeks) during which time small chicks are kept in facilities (brooder houses) separate from laying birds. Phase 2: Growers. This phase lasts about 3 months, from the ninth to the twentieth week of age. Growers may be either housed separately from small chicks or continue to be reared in brooder-cum-grower houses. It is important to provide appropriate care to the growers particularly between their seventeenth and twentieth week of age as their reproductive organs develop during this period.

Phase 3: Layers. Growers are transferred from the grower house to the layer house when they are 18 weeks old to prepare for the laying cycle. Birds typically lay for a twelve-month period starting when they are about 21 weeks old and lasting until they are about 72 weeks old. Figure 4 - Egg weight increase according to age of layer

47

Table XII Sizes and Mass of Eggs Modern Sizes Size Jumbo Very Large or ExtraLarge (XL) Large (L) Medium (M) Small (S) Peewee Mass per egg Cooking Yield (Volume)

Greater than 2.5 oz. or 71 g Greater than 2.25 oz. or 64 56 ml (4 tbsp) g 46 ml (3.25 Greater than 2 oz. or 57 g tbsp) Greater than 1.75 oz. or 50 43 ml (3 tbsp) g Greater than 1.5 oz. or 43 g Greater than 1.25 oz. or 35 g

7. Production Planning
On average a bird produces one egg per day. Furthermore, not all birds start to lay exactly when they are 21 weeks old. Planning is

48

therefore required for egg production to be constant so as to meet market demand. A schedule similar to the one shown in Table 2, which indicates on average satisfactory levels of production for a flock of birds, can be used. In more temperate climates birds can produce on average between 250 and 300 eggs per year. In Table 2 the age of the flock is shown in the first column and the percentage of birds that actually lay during that week of age is shown in the second column. Usually at 21 weeks of age only 5 percent of the flock lay. As shown in the third column, for 100 birds at 21 weeks of age only five would actually be laying. In the fourth column the actual number of eggs produced is shown. On average a bird produces 208 eggs over a twelve-month period, which is a weekly production rate of four eggs per bird. At 21 weeks of age 20 eggs are produced (five birds produce four eggs each) and at 22 weeks 40 eggs are produced, etc. The graph in Figure 3 shows the actual percentage of productive laying flock over a period of time, and the graph in Figure 4 shows the number of eggs produced over a period of time for 100 birds. Egg production rises rapidly and then starts to fall after 31 weeks of age. When less than 65 percent of the flock are laying eggs (71 weeks of age), it may become uneconomical to retain birds. Feed costs

49

and sales of culled birds for meat must be considered as well as prices for eggs. In some instances when egg prices are high it may be viable to delay culling birds until only 45 percent of the flock is still laying eggs (78 weeks of age.

Table XIII - Production schedule (100 birds)

Age of flock (in weeks) 21 22 23 24 25 26 27 28 29 30 31 32 - 39 40 - 47 48 - 59 60 - 64 65 - 70

% of flock laying 5 10 18 34 52 65 74 84 88 92 94 88 83 77 73 70

No. of birds No. of eggs produced laying per week 5 10 18 34 52 65 74 84 88 92 94 88 83 77 73 70 20 40 72 136 208 260 296 336 352 368 376 352 332 308 292 280

50

Figure 5 - Percentage of productive laying flock over a period of time

51

Figure 6 - Number of eggs produced over a period of time

Clearly, egg production requires planning for costs as well as for profit generation and for meeting market demand. Planning involves not only the number of eggs laid by the flock over a period of time, but also when to hatch chicks to replace birds with diminishing laying capacity.

52

If production is to be kept constant, a simple chart as shown in Table 3, for example, will be needed to plan when new chicks must be hatched so that they can be introduced to laying in time to pick up on diminishing egg production.

Table XIV - Production Planning Layer flocks 1st layers 2nd layers 3rd layers 0 Born 11 21 Lay Born Lay Born Lay 31 41 51 61 71 81

(......................... Time in weeks..........................)

As indicated on the chart, the first layer flock was hatched at 0 weeks to become productive after 21 weeks. The second flock of layers was hatched at the 21st week to be ready to lay after the 41st week, as the first layer flock starts to diminish production. This type of production entails having flocks of birds of different age groups. Clean and hygienic living quarters and surroundings are essential to control disease. There should be no more than three or four different flock age groups present at one time. The mortality rate on average is between 15 and 25 percent. This means that if one wants 100 birds to lay, it may be necessary to buy between 115 and 125 small chicks.

8. Equipments
53

A. Feeding troughs or feeders Feeders can be placed inside or along the front of cages. When making feeders, consider the ease in cleaning and avoidance of feed spillage. Feed spillage may be avoided by placing a metal or wooden strip along the inner mouth of the feed trough. B. Waterers To facilitate cleaning, the shape and size of the waterers should be semi circular, fairly wide and supported by an adjustable bracket to permit easier adjustment. It may have a removal stopper at the drainage end to allow for easier cleaning. For chicks, the waterers are usually one gallon plastic jars The most common waterers are the plastic waterers because they do not rust therefore they will last longer.

54

C. Lighting In shade houses, natural daylight must be supplemented with artificial lighting in order to obtain desirable lighting patterns which are necessary to adequately control sexual maturity. A constant or decreasing lighting pattern during rearing is essential to prevent too early sexual maturity. An increasing or constant light pattern is necessary after 22-24 weeks of age. D. Egg trays It is where the harvested eggs are placed. Table XV - Farm Equipments and Costs

Farm Equipment

1. Feeders 2. Waterers 3 Lighting 4. Egg Trays Total

Unit 5 5 5 30

Unit Cost 100 100 30 5

Total cost 500 500 150 150 1,300

9. Farm Layout

55

Figure 7 - Floor Plan

Rearing cage
1m

6m

5m

Rearing cage

2m

1m

2m

Figure 8 - Front Face of the Farm

56

4m

Figure 9 - Cage Size

.5 Square meters

Table XVI - Materials Needed for Farm Construction

Materials

Unit

Unit

Total

57

Cost
1. Galvanized Iron 2. Round Timber post 3. Wood ( 2 x 2) 4. Wood ( 1 x 1) 5. Sand 6.Cement 7. Screen (Plastic) 8. Nails 4 9. Nails 2 10. Labor 11. Bisagra Total 12 pcs. 6 pcs. 10 pcs. 20 bundles 1 dump 6 sacks 25m 1.5 kls. 3 kls. 7 days 20 pcs. 141 80 30 50 1000 226 120 60 64 200 7

Cost
1,692 480 300 1,000 1,000 1,356 3,000 90 192 1,400 141 10,651

10. PRODUCTION COSTS

58

Records should be kept of costs incurred during the operation and of proceeds from the sale of eggs. Costs must be covered by the sales of eggs. The difference between the proceeds from the sales and costs incurred represents profit. A. Brooder-grower stage The costs to be considered are not only those concerned with the birds during the laying period, but also those incurred in the brooder and grower stage during which time no eggs are being produced. The brooder-cum-grower stage lasts about five months (0-20 weeks). The main costs to consider during this stage can be seen in Table 4. B. Laying birds Once the costs for the brooder-cum-grower stage have been calculated, it will be possible to calculate costs for the laying birds. Calculations may be made on a daily, weekly or monthly basis. However, the most useful calculations are made at the end of the laying cycle. Daily, weekly or monthly calculations give approximate indications of costs and relative profits or losses. The main concern for farmers during this period is probably whether or not the proceeds from the sale of eggs cover feed and rearing costs. Feed cost is generally estimated to be about 75 percent of the production cost of eggs.

59

Comparing feed and rearing costs and egg proceeds for a week or a month may give an indication of profitability or loss. A farmer would have to subtract the cost of feed for a week from the proceeds for the total number of eggs sold that week. Furthermore, the rearing costs (expenses incurred before the birds start laying) should be amortized. This can be calculated by dividing the total rearing costs by the laying period.

11. Costs for the laying cycle

Calculations for the laying cycle (52 weeks) are more accurate and enable the farmer to determine whether the egg laying enterprise is running at a profit or a loss.

Table XVII - Expenses for Rearing Costs Chicks Feeds Housing(maintenance) Equipments(maintenance) Labor Vaccinations Mortality Various Total costs (115x50) Pesos 5,750 9,597 200 100 0 2,000 150 1,500 19,297

60

Costs. When calculating costs for the laying cycle, the main expenditures to consider are:

rearing - rearing brooders until they become layers; housing - building or maintaining laying house and brooder

house;

equipment - the cost of miscellaneous items such as

feeders, buckets, etc.;

feed - total feed used during the year; vaccinations - medicines and veterinary visits; mortality - loss of laying birds due to disease, etc.; and various expenses - lighting, water, etc.

Table XVIII - Costs for a production cycle 1st year Costs Rearing (carried forward from table 4) Houses(Maintenance) Equipments(Maintenance) Feeds Labor Vaccinations Mortality Various expenses Total costs Pesos 19,297 200 100 77,027 6,000 4,800 600 3,600 111,624

12. STORAGE OF EGGS

61

The storage of shell eggs during the main laying season, in order to conserve them for consumption when they are scarce, has been practiced for many centuries. For the successful storage of eggs, the following conditions must be met.

The eggs placed in storage must be clean; they must not

be washed or wet.

Packaging material used should be new, clean and

odorless.

Loss of water due to evaporation should be reduced to a

minimum.

The storage room must be free from tainting products and and should be cleaned regularly with odorless

materials

detergent sanitizers.

The storage room must be kept at a constant temperature

and humidity must be checked.

There should be air circulation in the storage room. Eggs should be stored so that they are allowed to breathe. As far as possible, interior quality should be monitored;

there should be a good proportion of thick white, the yolk should stand up well, and the flavor of white and yolk should be good.

62

13. TRANSPORT OF EGGS

For the successful transport of shell eggs three essential requirements must be met. a. The containers and packaging materials must be such that the eggs are well protected against mechanical damage. b. Care should be taken at all stages of handling and transport. Workers handling eggs should be instructed so that they appreciate the need for careful handling. The provision of convenient loading platforms at packing stations, loading depots and railing stations, and handling aids, such as hand trucks and lifts, are of great help. c. The eggs must be protected at all times against exposure to temperatures that cause deterioration in quality as well as

contamination, especially tainting.

63

Chapter 4 Financial Feasibility

1. Major Assumptions
Table XIX - Production Assumption Number of chickens Total Mortality Rate Mortality Rate ( Rearing period ) Mortality Rate ( Laying Period ) Total Mortality Loss (Birds) Total number of Birds Laying Eggs Length of Rearing Period (weeks) Length of Laying Period (weeks) Lag time between the Flock(Weeks) 115 15% 3% 12% 15 100 25 52 2

Table XX - Expense Assumption Raw material price growth rate DOC Cost (Day Old Chicks) Weight of Feed Bag(Kg) Rearing Period Feed Consumption/Bird/Month(Kilo) Rearing Period Cost of Feed/Bird/Month Laying Period Feed Consumption/Bird/Month(Kilo) Laying Period Cost of Feed/Bird/Month Vaccination Cost per Bird Electricity Expense per Month Water Expense per Month

2% 50 50 427 9,597 3,349 77,027 3.49 3,000 600

64

Feeds consumed Computation

1. Rearing Period First two weeks Chick Booster 13gms x 14 days x 115 chicks = 21 kilos 21 kilos x P22 = P462 Preceding two weeks Chick Starter 28gms x 126 days x 115 chicks = 406 kilos 406 kls. x P22.5/kl. = P9,135 Total price of feeds consume P9,597 2. Laying Period Layer Mash 80gms x 364days x 115 chickens = 3,349 kilos 3,349 x P23/kl = P77,027

Table XXI - Revenue Assumptions Availability of Eggs in Year 1 (Months) Production Capacity in Year 1 (Dozens) Eggs selling price (per Dozen) Birds selling price
Chicken Manure Selling price( kilo )

12 300 60 100 1 1,150 10%

Feed Bags selling price Sales price growth rate

65

Income. When calculating income for the laying cycle, the earnings to consider derive from:

the sale of eggs; the sale of culled birds after the first cycle of production;

and

where applicable, manure sold as fertilizer.

Initially, capital is required to start an enterprise; proceeds from the sales of eggs should, however, provide funds to continue with the business before the end of the first laying cycle. Indeed, three months after point of lay (30 -31 weeks of age), when the birds should normally have reached peak production, the proceeds from the sale of eggs should be sufficient to operate the business on a revolving fund basis. The three-month period is sufficiently long even for the low producing birds or those that peak late.

66

Table XXII - Income and Costs for a production cycle 1st year Income Sale of eggs Sale of manure Total income Production Cost Rearing Expense Houses Equipments Feeds Labor Vaccinations Mortality Various expenses Total costs Marketing costs Packaging/storage Handling Transport Product losses Fees, taxes, unofficial payment Unexpected costs Total marketing costs Total costs 500 1,000 1,000 100 220 100 2,920 114,844 19,297 400 200 77,027 6,000 4,800 600 3,600 111,924 (300eggs x 100chickens x 5pesos) (1peso per kilo x 500kls) Sale of culled birds (P100 x 100chickens) PESOS 150,000 10,000 500 160,500

67

Jamz Supreme Eggs Income Statement For the fiscal year 2011
Sales Less: Cost of Goods Sold Feeds Rearing expense Labor Gross Profit from Sales Less: Operating Expenses: Farm House Maintenance 400 Equipments Maintenance Vaccinations 4,800 Mortality 600 Electricity expense 3,000 Water Expense 600 Depreciation Expense (Housing) 1,065 Depreciation Expense (Equipment) Selling Expenses: Packaging/Storage Handling Transport Product losses Fees, taxes, Unofficial payment Unexpected losses Net Income 500 1,000 1,000 100 220 100 200 77,027 19,297 6,000 160,500

102,324 58,176

130

10,795

2,920 44,461 =====

68

PROJECTED INCOME STATEMENT

Year Year Year 1 Year 2 3 4 Year 5 160,50 176,55 194,20 203,91 0 0 5 5 220,228

Jamz Supreme Eggs

Sales Cost Of Goods Sold Feeds Rearing Expense Direct Labor Total Gross Profit From Sales Less: Operating Expenses Farm House Maintenance Equipments Maintenance Vaccinations Mortality Electricity expense Water Expense Depreciation Expense(Housing) Depreciation Expense(Equipment) Total Operating Expenses Less: Selling Expense Packaging/Storage Handling Transport Product losses Fees, taxes, Unofficial payment Unexpected losses Total Selling Expense

77,027 19,297 6,000 102,32 4 58,17 6

78,568 80,139 81,742 19,500 20,200 20,700 6,000 6,400 6,400

83,377 21,100 6,600

104,06 106,73 108,84 8 9 2 111,077 72,48 2 87,46 6 95,07 3 109,15 1

400 200 4,800 600 3,000 600 1,065 130 10,79 5

500 400 5,000 600 3,060 600 1,065 130 11,,35 5

400 200 4,800 500 3,120 600 1,065 130 10,81 5

450 350 4,800 550 3,180 600 1,065 130 11,12 5

480 360 5,200 600 3,240 600 1,065 130 11,675

500 1,000 1,000 100 220 100 2,920 44,46 69 1

600 1,050 1,100 120 250 130 3,250 57,87 7

550 1,120 1,130 160 300 120 3,380 73,27 1

560 1,130 1,170 200 330 150 3,540 80,40 8

620 1,150 1,190 230 350 130 3,670

Net Income

93,806

Jamz Supreme Eggs

Cash flow Statement For the fiscal year 2011

Cash flow from operating activities: Net Income Depreciation Decrease/Increase in: Accounts Receivable 7,657 Stocks and Inventory (7,656) Total Increase/decrease in: Accounts payable Net Cash provided by operations Cash flow from Investing Activities: Reduction/addition in: Housing and equipment Net Cash provided by investing Cash flow from financing activities: Capital/Retained earnings Net Cash provided by financing Net increase in cash Cash Balance, beginning Cash Balance, end

44,461 1,195 0 38,000 2,000 40,000

0 0 40,000

Jamz Supreme Eggs

70

PROJECTED CASH FLOW

Year 0 Cash flow from operating activities: Net Income Depreciation Decrease/Increase in: Accounts Receivable Stocks and Inventory Increase/decrease in: Accounts payable Net Cash provided by operations Cash flow from Investing Activities: Reduction/addition in: Housing and equipment Net Cash provided by investing Cash flow from financing activities: Capital/Retained earning Net Cash Provided by financing Net increase in cash Cash Balance, beginning Cash Balance, end Year 1 Year 2 Year 3 Year 4 Year 5

0 44,461 57,877 73,271 80,408 93,806 0 1,195 1,195 1195 1,195 1,195 0 18,750 0 18,75 0 (7,656 ) 0 2,000 40,00 0 (2695) (2500) (500) 0 53,37 7 (3616) (2100) 700 69,45 0 475 (2100) 300 80,26 0 2,496 (2050) 200 95,24 7

11,951 11,95 1

0 0

0 0

0 0

0 0

0 0

30,701 30,70 1 0 0 0

0 44,461 57,877 73,281 80,408 44,46 1 0 57,87 7 73,28 1 80,40 8

8,916 11,573

6,989 14,839

0 40,000 48,916 60,489 67,478 40,00 0 48,91 6 60,48 9 67,47 8 82,31 7

71

Jamz Supreme Eggs Balance Sheet For the fiscal year 0 ASSETS
Current Assets: Cash Accounts Receivable Stocks and inventory Total Current Assets Non-current assets: Housing Equipment Less: Accumulated Depreciation Total Non Current Assets Total Assets ===== 10,651 1,300 0 11,951 30,701 0 0 18,750 18,750

LIABILITIES
Accounts Payable 0

Owners Equity
Jamz, Capital Net Income Total Liabilities and Owners Equity ==== 30,701 0 30,701

72

Jamz Supreme Eggs Balance Sheet For the fiscal year 2011 ASSETS
42,604 5,052 18,750 56,802

Current Assets: Cash Accounts Receivable Stocks and inventory Total Current Assets Non-current assets:

Housing Less: Accumulated Depreciation Equipment Less: Accumulated Depreciation Total Non Current Assets TOTAL ASSETS

10,651 1,065 1,300 130 1,170 10,756 75,162 ===== 9,586

LIABILITIES
Accounts Payable 2,000

Owners Equity
Jamz, Capital Net Income TOTAL LIABILITIES AND OWNERS EQUITY 30,701 44,461 77,162 =====

73

Jamz Supreme Eggs

PROJECTED BALANCE SHEET
Year 0 ASSETS Current Assets Cash Accounts Receivable Stocks and Inventory Total Current Assets Non - Current Assets Housing Less: Accumulated Depreciation Total Equipment Less: Accumulated Depreciation Total Total Non - Current Assets Total Assets LIABILITIES Accounts Payable OWNER'S EQUITY Jamz, Capital Net Income Total Liabilities and Owner's Equity 30,701 30,701 30,701 0 44,461 57,877 30,70 1 77,16 2 90,07 8 30,701 73,271 106,17 2 30,701 80,408 113,60 9 30,701 93,806 126,80 7 0 2,000 1,500 2,200 2,500 2,300 0 40,000 48,916 0 7,656 10,351 18,750 18,750 21,250 18,750 66,406 80,517 10,651 10,651 10,651 0 1,300 0 1,065 9,586 1,300 130 1,170 2,130 8,521 1,300 260 1,040 9,561 90,07 8 60,489 13,967 23,350 67,478 13,510 25,450 82,317 11,014 27,500 Year 1 Year 2 Year 3 Year 4 Year 5

97,806 106,438 120,831 10,651 3,195 7,456 1,300 390 910 8,366 106,17 2 10,651 4,260 6,391 1,300 520 780 7,171 113,60 9 10,651 5,325 5,326 1,300 650 650 5,976 126,80 7

11,951 10,756 30,70 1 77,16 2

74

2. Financial Ratio Analysis

A. Tests of liquidity These measures are used to determine a firms ability to meet short term obligations, and to remain solvent in the event of adversities. Current Assets Current ratio = -----------------Current Liabilities Year 1 = = Year 2 = = Year 3 = = Year 4 = = Year 5 = = 66,406 ---------2,000 33.20 80,517 ---------1,500 53.68 97,806 ---------2,200 45.46 106,438 ---------2,500 42.56 120,831 ---------2,300 52.53

75

B. Test of debt-service - These tests are employed to present the projects ability to meet long-term obligation. Total liabilities Debt-to-networth ratio = ----------------Total equities Year 1 2,000 = ----------75,162 = Year 2 .026

1,500 = ----------88,578 = .017

Year 3

2,200 = ----------103,972 = .021

Year 4

2,500 = ----------111,109 = .023

Year 5

2,300 = ----------124,507 = .018

76

C. Tests of profitability These show the operational performance and efficiency of the project. 1. Net profit margin Net income = --------------Sales 44,461 = --------------160,500 = Year 2 28%

Year 1

57,877 = --------------176,550 = 33%

Year 3

73,201 = --------------194,205 = 38%

Year 4

80,408 = --------------203,915 = 39%

Year 5

93,806 = --------------220,228 = 43%

Net Income 2. Return on owners investment = -------------77

Stock equity Year 1 44,461 = --------30,701 = 149%

Year 2

57,877 = --------30,701 = 186%

Year 3

73,201 = --------30,701 = 238%

Year 4

80,408 = --------30,701 = 262%

Year 5

93,806 = --------30,701 = 306%

D. Test of operating leverage These functions indicates how the project employs assets for which it pays a fixed cost.

78

1. Break-even selling price analysis Total cost BESP = ------------ x Selling price Sales 114,844 = = 160,500 3.58

---------

x 5.00

2. Break-even sales analysis

BES

= BESP X Unit Volume = = 3.58 x 3,600 12,888

Chapter 5 Socio-Economic Study

79

In

terms

of

employment,

the

business

directly

benefits

individuals and families in the society by providing jobs. If the business become more successful and make some expansions in the future operation, it can help those unemployed citizens because the business will need more manpower. Indirectly, the entire economy may be benefited. More income in the hands of the people would mean greater demand for other goods. This additional demand may in turn, stimulate the production of more of the other goods.

It also helps the municipality in terms of taxes and fees collected from the business. The firm also aims to help in some community development projects.

Eggs are one of the basic commodities that every household used. In other way, the business help lowered the prices this means another supplier of the certain commodity because if the supply is high the prices are low.

Chapter 6
80

Management Study
1. Basic Consideration
A. MANAGEMENT OF THE LAYER FARM The success of the egg-production business greatly depends on successful management of the layer farm. Each factor below

contributes to the success of the business. 1. Housing and Equipment Poultry housing and equipment can be as simple as a shed roof with chicken water fountains and hand-filled feeders to an

environmentally controlled fully automated cage layer house. Make sure that the birds are given adequate floor space. A maximum of three birds per half square meter is ideal one. Keep the housing and equipment always clean. 2. Lighting, heating and ventilation Heat stress is one of the major risk factors that one must consider in layer farm management. The ideal temperature for laying hens is between 18 degrees and 29 degrees Celsius. Air movement around birds at floor level has a beneficial cooling effect. In shade houses, take full advantage of natural breezes using

81

paddles or circulating fans in periods of still weather and particularly during the heat of the day. In controlled environment houses, use inlets with moveable louvers which can direct moving air directly on to the birds at floor level. 3. Rearing equipment Poultry housing should provide clean, dry, comfortable quarters for birds throughout the year. To brood chicks, you need adequate heat and space. The house and equipment should be clean and in good repair. Set up and warm the brooding area before the chicks arrive. Chicks will need a warm, draft-free location with proper ventilation and access to clean water, appropriate feed and protection. The normal brooding period, when heat is required, is from the time chicks hatch until they are about six weeks old. Chicks may be brooded many places on the farm. The main requirements are adequate space, a reliable source of heat and proper ventilation. A brooder house measuring 10 by 12 feet will take care of 120 chicks to eight weeks of age. The feeders are placed in a spoke like arrangement radiating outward from underneath the outer portion of

82

the brooder canopy. This provides chicks access to feed and allows them to move freely in and out from the heat source. 4. Feeding equipment The mechanics of feeding are nearly as important as the feed itself. Supply enough feeder space so that all the birds can eat at the same time. When space is limited, some birds dont get enough to eat. Keep feed available for the birds constantly. Meal feeding (giving a limited amount of feed several times each day) can reduce productivity if not managed carefully. Place feeders so the trough is at the level of the birds backs. This practice reduces feed spillage, which encourages rodents, wastes feed, and costs money. 5. Watering equipment The distribution of waterers should be such as to minimize the distance any bird has to move in order to drink; ideally, both feed and water should be distributed so that no bird has to move more than 1 1/2 meters to get its requirements.

Whenever possible, use a water supply such as well which provides cool water. Bury or insulate water pipes to maintain the original coolness. Additionally, supply troughs in which breeders may dip their combs and wattles so that evaporation of water cools the blood supply 83

in the combs and wattles. In extremely hot weather, do not place drugs or other substances in the water which might decrease its palatability. 6. Dead bird disposal Disposal of dead birds on the farm continues to be a challenge from the standpoints of cost, environmental safety, biosecurity and practicality. While we, hopefully, have to deal with only a relatively small amount each day, disposal or preservation must also occur daily in order to meet the above challenges. Burial has been the method of choice for years because of its low cost and convenience. A deep pit with inside framing and a tight-fitting cover can be constructed. Incineration is probably the most biologically safe method of disposal. It creates only a small amount of benign waste that can be easily disposed of and does not attract pests. It is also a serviceable option where a high water table or soil type precludes excavation.

84

7. Biosecurity As a bird owner, keeping birds healthy is a top priority. Your birds can become sick or die from exposure to just a few unseen bacteria, viruses, or parasites. In a single day, these germs can multiply and infect all your birds. However, by practicing biosecurity, you can keep your birds healthy. Restrict access to your property and your birds. Consider fencing off the area where your birds are to form a barrier between clean and dirty areas. The clean area is the immediate area surrounding your birds, and the dirty or buffer area must be considered to be infected with germs, even if the birds appear healthy and disease free. Allow only people who take care of your birds to come into contact with them. Keep cages, food, and water clean on a daily basis. Clean and disinfect equipment that comes in contact with your birds or their droppings. That includes tools such as feed scoops, shovels, rakes, and brooms. All manure must be removed before disinfectant can work so clean surfaces with soap and water first. Properly dispose of dead birds by burial or incineration or take them to a landfill.

85

B. FLOCK CARE AND MANAGEMENT 1. Chick quality Healthy flocks start from healthy stocks. So from the start, choose only healthy chicks for the farm. Do not acquire chicks that have wet vents and dull eyes. Characteristics of healthy chicks are dry, fluffy feathers, bright eyes and alert and active appearance. 2. Rearing Sufficient heat should be provided to keep day-old chicks warm during the day or night. Abrupt changes in brooder temperature should be avoided during the first two weeks. Provide adequate space for chicks as they grow. Overcrowding is one of the factors affecting poor growth. Also provide a good light source, as a well-lighted brooder encourages chicks to start feeding. Also prove good ventilation for chicks to avoid future respiratory diseases. Egg-type chicks should be transferred from the brooding house to the grower pens at six to eight weeks old. They are then transferred to the laying house when they reach the age 16 to 18 weeks old or three weeks before they lay eggs. Make sure to provide anti-stress drugs, vitamins and minerals to the birds two to five days before and after their transfer. Also make

86

sure the bird houses are thoroughly cleaned before the birds are transferred. The head should be moderately long and well-filled in forward to the eyes to avoid a crow-headed appearance. The face should be clean-cut, smooth and free from wrinkles. The comb should be large and bright red in color. The eyes should be large, bright, and prominent. The pullet should be fully feathered with plumage of good quality. Shanks should show a good healthy color, but place no emphasis on color intensity with birds of this age. Feet and toes should be completely normal and the bird should be well balanced on her legs. The body should be deep, broad, and well developed, with a heart girth of ample circumference. The keel should be of good length and the back should be relatively long, broad, and flat.

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3. Sanitation and waste management Maintain only a very shallow layer of litter on concrete floors. This will maximize any cooling effect which the concrete floor may have on the birds through absorption of body heat. Dry, dusty litter can cause severe irritation and damage to the eyes of chickens. Avoid dustiness by sprinkling water generously on litter at regular intervals. This spraying can, during extremely hot, dry spells, be advantageously extended to the birds themselves and the feed. Vaccinations and control of common pests and diseases many bird diseases can be difficult to diagnose. The list below includes some of the things to look for that signal something might be wrong with your birds. Early detection of signs is very important to prevent the spread of disease. Watch out for the following signs of disease: Sudden increase in bird deaths in your flock Sneezing, gasping for air, coughing, and nasal discharge Watery and green diarrhea Lack of energy and poor appetite Drop in egg production or soft- or thin-shelled misshapen eggs Swelling around the eyes, neck, and head

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 Purple discoloration of the wattles, combs, and legs (Al) Tremors, drooping wings, circling, twisting of the head and neck, or lack of movement. Proper handling of vaccines should be practiced. The quality of a vaccine cannot be guaranteed if the product is mishandled or improperly used after it leaves the manufacturing plant. All vaccines are labeled with instructions for use and dates of expiration. Selling directly to local shops, institutions and businesses like restaurants, schools and hospitals would require a prior agreement and contract. The owner should be able to meet the quantity and quality demand of the customer organization.

2. Form of ownership

The form of ownership is single proprietorship because it is solely owned by one person. This proposed feasibility study is owned by Mr. Jeffrey D. Janeo.

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