A pastured chicken business plan has two numbers at its heart: what a bird costs to raise, mostly chick and feed, and how many birds you'll process, because that decides the rules. Federal poultry inspection doesn't apply to a farmer who slaughters no more than 1,000 birds of their own raising a year and sells only within the state. Up to 20,000 birds, the producer/grower exemption lets a farm slaughter and sell its own birds within the state without USDA inspection, under sanitary conditions, with each package labeled with the producer's name and address and "Exempted—P.L. 90-492". Past that, or across state lines, the birds go through an inspected plant. States can add their own licenses or limit the exemptions, so the state's rules come first. In the example below, a farm raises about 1,760 birds in its first year, uses the producer/grower exemption, and ends the year about $6,300 ahead on $41,600 of sales, after paying $20 an hour for processing. Below is a description example, each part of the plan, the exemptions, the year, the startup budget, and a free template.
The short version
- Cost a bird from chick to package: chick, feed, processing supplies, time, losses, card fees.
- Price whole birds direct, to restaurants, and as prepaid shares.
- Under 1,000 birds of your own raising a year, sold in-state: outside federal inspection.
- Up to 20,000: the producer/grower exemption, with its exemption statement on the label and sales within the state.
- More than 20,000, or across state lines: an inspected plant.
- Check your state first; it can require a license or limit the exemptions.
- Raise on pasture in the warm months and sell from the freezer through the winter.
- TaroStack keeps each processing day as a lot, with its weights and where every bird went. More below.
Part 1: the business description
Hickory Bottom Farm, a made-up pastured poultry farm in Missouri I use in these examples, writes:
Hickory Bottom Farm raises meat chickens on pasture in moveable shelters from May to October, processes them on the farm, and sells whole birds frozen at a farmers market, to three restaurants, and as prepaid 10-bird shares. Every package carries the processing date.
Part 2: what a bird costs
| Per bird | Whole bird, direct | To restaurants | In a 10-bird share |
|---|---|---|---|
| Chick | $1.50 | $1.50 | $1.50 |
| Feed, 15 lb at 40¢ | $6.00 | $6.00 | $6.00 |
| Bags, labels and ice | $1.20 | $1.20 | $1.20 |
| Processing time, 20 min at $20 an hour | $6.67 | $6.67 | $6.67 |
| Losses, 5% of birds | $0.45 | $0.45 | $0.45 |
| Card fees, 3% | $0.75 | $0.69 | |
| Variable cost | $16.57 | $15.82 | $16.51 |
A share of 10 birds costs $165.10 in all. The feed is the line that moves: a 10-cent rise in feed costs $1.50 a bird.
Part 3: customers and prices
| Product | Price | Variable cost | Contribution | Margin | In a peak month |
|---|---|---|---|---|---|
| Whole chicken, about 4.5 lb, direct | $25.00 | $16.57 | $8.43 | 33.7% | 150 |
| Whole chicken to restaurants | $21.00 | $15.82 | $5.18 | 24.7% | 60 |
| Chicken share, 10 birds prepaid | $230.00 | $165.10 | $64.90 | 28.2% | 8 |
Shares are paid up front in spring, which pays for chicks and feed before the first bird is sold.
Part 4: the exemptions
| Exemption | What 9 CFR 381.10 says |
|---|---|
| 1,000 birds | A producer slaughtering no more than 1,000 poultry of their own raising on their own farm in the calendar year, not buying or selling other poultry products, with none moving in commerce |
| Producer/grower, up to 20,000 | A producer slaughtering and processing birds raised on their premises, distributed only within the state; sanitary handling; labeled with the producer's name and address and "Exempted—P.L. 90-492" |
| Direct to consumers and restaurants | Slaughter or processing for distribution only within the state directly to household consumers, restaurants, hotels and boardinghouses |
| The cap | None of these exemptions for anyone who slaughters or processes more than 20,000 poultry in the year |
The rules are in 9 CFR 381.10. In this example, the farm's state lets it use the producer/grower exemption with a state license; states differ, and some require more. Beef and pork have their own rules, explained in custom exempt meat processing. This is general information, not legal advice.
Part 5: the year, month by month
Fixed costs are $535 a month: insurance ($60), market fees ($100), freezer power ($80), processing equipment upkeep ($50), the state license and inspection ($40, averaged), the website and preorders ($35), software and card fees ($30), marketing ($60), and delivery ($80). Month 1 is May; July to September is full speed:
| Month | Birds direct | To restaurants | Shares | Sales | Profit | Cash, year to date |
|---|---|---|---|---|---|---|
| May | 30 | 12 | 2 | $1,462 | −$90 | −$90 |
| Jun | 90 | 36 | 5 | $4,156 | $735 | $645 |
| Jul | 150 | 60 | 8 | $6,850 | $1,560 | $2,204 |
| Aug | 150 | 60 | 8 | $6,850 | $1,560 | $3,764 |
| Sep | 150 | 60 | 8 | $6,850 | $1,560 | $5,323 |
| Oct | 120 | 48 | 6 | $5,388 | $1,115 | $6,438 |
| Nov | 75 | 30 | 4 | $3,425 | $512 | $6,950 |
| Dec | 60 | 24 | 3 | $2,694 | $290 | $7,240 |
| Jan | 30 | 12 | 2 | $1,462 | −$90 | $7,150 |
| Feb | 23 | 9 | 1 | $994 | −$230 | $6,920 |
| Mar | 15 | 6 | 1 | $731 | −$313 | $6,607 |
| Apr | 15 | 6 | 1 | $731 | −$313 | $6,295 |
The year's sales are $41,593 and the profit $6,295, on top of $20 an hour for processing. That's about 1,760 birds, past the 1,000-bird line, which is why the farm works under the producer/grower exemption. The template counts birds when sold; chicks and feed are bought months earlier, so keep cash for them.
Part 6: the startup budget
| Item | Cost |
|---|---|
| Pasture shelters | $2,400 |
| Feeders and waterers | $600 |
| Brooder | $500 |
| Scalder, plucker, cones and stainless table | $3,800 |
| Chest freezers | $1,500 |
| Shrink bags and labels | $400 |
| Market tent and display | $450 |
| Website with preorders | $300 |
| Working cash | $3,000 |
| Total | $12,950 |
What an egg flock earns is in egg business plan.
Get the template
Download the chicken business plan template. Four sheets: products with price, variable cost and units at full speed; the year month by month with a ramp you can change; fixed costs; and the startup budget. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
Every processing day makes a batch of birds of different weights that go into the freezer and out over months, to a market, three restaurants and a list of share members. A count of birds processed this year also matters, because the exemptions have limits. How a lot follows a product is in what is lot tracking.
How TaroStack does it
TaroStack keeps each processing day as a lot, with its weights and where every bird went.
Each day a lot. A processing day is a batch with a lot and its date, so every bird in the freezer belongs to a day, and the year's count is a total of batches.
Oldest first. First-expired-first-out is the default, so July's birds go out before September's, and a forecast shows what will be left in spring.
Where it went. Each restaurant's and share member's order records the lots it got, so one recall report shows every customer a processing day reached.
| The job | Notebook | In TaroStack |
|---|---|---|
| Birds processed this year | Tally marks | The year's batches |
| Which birds to sell first | Remembered | First-expired-first-out |
| Who got July 12th's birds | Not recorded | One recall report |
Lots, batches, expiry and orders are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.