Chicken Business Profit Margin: What a Pastured Bird Earns

A pastured meat chicken costs about $8 to raise, the chick, 15 pounds of feed and the birds lost along the way, and then about 20 minutes of processing at the farm, which costs nearly as much as the feed. A whole bird sold direct keeps about a third of its price; a restaurant keeps the farm's margin thinner. Margin = (price − cost) ÷ price. In the example below, a whole bird costs $16.57 to raise, process and sell and goes for $25.00, a 33.7% margin. A peak month of four ways of selling brings $7,750 of sales and about $2,390 of gross profit.

The short version

• Margin = (price − cost) ÷ price; markup = (price − cost) ÷ cost.
• Count your time as a cost, even if you don't pay yourself yet.
• A whole bird direct: $16.57, $25.00, 33.7%.
• Feed is the biggest cost to raise; processing time is nearly as much.
• Restaurants keep a thinner margin.
• Prepaid shares bring the cash before the birds are raised.
• TaroStack costs each bird from what each flock used. More below.

A bird, costed

Hickory Bottom Farm, the made-up pastured poultry farm in Missouri I use in these examples, raises meat chickens in moveable pens and processes them on the farm under the federal exemption for small growers:

The exemption and the year are in chicken business plan, and setting the price per pound in how to price chicken.

Margins by channel

The restaurant bird keeps 24.7%; the cut-up bird keeps 32.5%, with ten more minutes of knife work in it.

A month's numbers

A peak month for Hickory Bottom Farm:

Direct birds bring most of the gross profit; the restaurant takes 60 birds a month the farm doesn't have to sell one by one. The shares pay in spring for birds raised in summer, which buys the chicks and the feed. What "pasture-raised" on the label needs is in pasture raised label requirements.

Get the calculator

Download the chicken margin calculator. One sheet: one line for each product and channel, with its price, materials, packaging, labor and fee rate; the cost, gross profit, margin, markup and the price your target margin needs fill in. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

The calculator holds one feed price and one loss rate. A hot July that loses 10% of a flock, or feed at 50 cents a pound instead of 40, changes every bird, and only the flock records show it.

How TaroStack does it

TaroStack costs each bird from what each batch used, so margins sit on real cost.

True cost from the batch. Each batch takes chicks and feed at the price of the deliveries they came from, so a price rise shows in the next batch's cost.

Labor on the batch. The minutes a batch took are recorded on it, so the hours behind each product are on record.

Margins by product. Margins are reported per product on that actual cost, and a price-creep report per supplier shows whose prices moved.

Recipes, batches, costing and margin reports 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.

Questions people also ask

What is a good profit margin for a pastured chicken business?

In the example, 33.7% on direct sales before overhead; wholesale earns less, so a business that sells both should know its mix.

Is a pastured chicken business profitable?

It can be: the example's month of $7,750 in sales leaves about $2,390 of gross profit, before rent, insurance and the owner's pay.

How much profit do you make per chicken?

In the example, about $8.43 a whole bird sold direct, before the farm's fixed costs.

Is selling chickens to restaurants profitable?

In the example, a restaurant bird at $21 keeps 24.7%, a thinner margin, for 60 birds a month sold at once.