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The real cost of investment in incubation

by 5m Editor
21 May 2007, at 12:00am

By Ron Meijerhof, Senior Technical Specialist, Hybro B.V. - Success in the hatchery is often measured by hatch results and as every unhatched chick represents a financial loss, investment in good equipment and processes is important, to minimise these losses.

However, hatchability is not the only factor that should drive the decision-making process.

If our hatch of fertiles is low, we must look at the environment we provide for answers. Because while the same environment may not have killed other, neighbouring embryos in the same batch, their survival in anything other than an environment that is optimised for growth and development cannot truly be considered a success.

Effects on the broilers

Research at PennStateUniversity has shown that incubating eggs for the last five days at ±2°F from optimum shell temperature altered feed conversion by 5-7 points, for birds of the same weight – a trend we also see in the field.

For a 2kg broiler, this means between 100-140 grams more feed, for each bird to reach the desired bodyweight.

If we incubate 100,000 eggs in a machine, with a moderate 80 per cent hatch and a grow out mortality of five per cent, this means that every hatch needs an additional 7,600-10,640 kg of feed for each bird to reach body weight. Based on 17 new batches each year, this equates to c.130-180 metric tons of feed per year, per machine.

How does this relate to hatchability?

On this basis, for every one per cent hatchability lost each year, we lose one per cent of 17x100,000 eggs in that machine. This potentially means a loss of 17,000 day old chicks. This is a huge number of chicks, and well worth addressing any challenges in incubation for. But how does the cost of loss of hatchability compare with the cost of losses against feed conversion?

Feed costs do of course fluctuate, according to market factors, country and so on. But let’s estimate the cost of a day old chick and a kg of feed both at €0.15. If we lose 5 points of feed conversion, that equates to a cost of €19,500 (130,000 kg of feed x €0.15,) per machine per year, or 19,500/5=€3,900 per point of feed conversion. So if we lose one per cent of hatchability, we lose €2,550 per machine per year. This means that one point of feed conversion is equal, in terms of actual cost, to around 1.5 per cent hatchability.

How does this relate to the price of the machine?

There are significant variances in the cost of a machine, both in terms of purchase price and running costs, depending on the country of operation and the type of machine selected.

However let’s suppose that the total cost per egg place in a machine is €0.40. This gives us a total cost of €40,000 per 100,000 eggs placed. And let’s also assume the cost of maintenance, depreciation and interest at 15 per cent. On this basis, and not including operating costs, each machine of 100,000 eggs will cost about €6,000 per year.

One per cent hatchability loss costs €2,550, so if we gain 2 per cent hatchability per batch, the machine has already paid for itself. Conversely, if we lose 2 per cent hatchability, we would need to purchase the machine almost for free to ensure its commercial viability.

And it’s even worse for feed conversion. With an increase of 1.5 points of feed conversion for that machine, we cannot afford to pay for the machine at all.

If we calculate pay-back times, a machine costing €40,000 that delivers five points better feed conversion will pay for itself in just two years.

Hatchability or broiler results

In this example, feed conversion and hatchability are the only factors that have been taken into account. However if hatchability is poor, we expect to see adverse affects on chick quality - and with that, a downturn in broiler performance in terms of growth, mortality, feed conversion, and perhaps also in meat yield – so further compounding our losses.

This example demonstrates that a bad machine can be very costly indeed. If results are just slightly below optimum, the price of the incubator is almost irrelevant, as it will be virtually impossible to make each hatch pay its way. If results are worse than that, get rid of poor equipment as quickly as possible, regardless of the replacement cost - because you are running the risk of investing in incubation as a very expensive hobby.

May 2007