Estimated Value of Replacement Pullets and Table Egg Layers (White Leghorns) - 2002

 

By Don Bell, Poultry Specialist, Emeritus

University of California

September 25, 2002

 

The value of table egg layer flocks of different ages is usually calculated by taking the maximum investment in the ready-to-lay pullet and depreciating the value in a straight line manner until they are sold as fowl.  This method assumes a fixed reduction in value per unit of time.

 

Maximum value is determined by taking the cost of the ready to lay pullet at 20 weeks of age and continuing costs  until egg income offsets additional costs.  Today (2002), this would represent about $2.75 for the 20 week old pullet and an additional net cost of about $.25  to reach a peak value of $3.00 at 22 weeks of age.

 

These costs are based upon “Cash Flow for Replacement Pullets” updated on May 21, 2002.  The update represents the following assumptions:

 

100,000 birds raised in an environmentally controlled cage brooder/grow house

Brood/grow house investment = $6.00/bird

4% mortality to 20 weeks of age

14.2 pounds of feed @ $7.15/100 pounds

1-day old chicks @ $.60/each

 

Values from peak value to that at sale as fowl will differ due to the age of sale and whether or not the flock is to be recycled (once or twice).  If the flock is to be sold non-molted at 80 weeks of age, a straight line should be applied between peak value and fowl value.  At today’s peak value of $3.00 and fowl value at zero, the weekly loss in value from 22 weeks to 80 weeks would be 5.17˘ ($3.00 divided by 58 weeks).

 

If producers choose to recycle (molt) their flocks, an added investment (net molt cost) is incurred at the time of the molt.  This usually adds about $.50 (by 8 weeks) to the current value of each layer and this then must be depreciated back to the value of the depleted hen (fowl).  This extra investment is usually depreciated over the remainder of the flock’s life and is added to the non-depreciated costs thereby increasing the weekly rate of loss in value for the remainder of the flock’s life.

 

Flock values may be depreciated on a “per week” basis with a fixed decrease in value for the entire flock per week or by allocating a fixed cost “per expected dozen” over weekly or monthly total production (in dozens).

 

One day old chick cost = $.60, 20 week pullet cost = $2.75, cost at peak value = $3.00 (at 22 weeks), net cost of molt = $.50, value as fowl = zero.

 

Representative Values of Laying Hens of Various Ages for Three Replacement Programs.

Age

One cycle flocks

Two cycle flocks

Three cycle flocks

0

.60

.60

.60

5

.98

.98

.98

10

1.50

1.50

1.50

15

2.06

2.06

2.06

20

2.74

2.74

2.74

25

2.80

2.85

2.90

30

2.50

2.70

2.70

35

2.25

2.50

2.62

40

2.00

2.30

2.55

45

1.75

2.10

2.41

50

1.50

1.90

2.26

55

1.25

1.70

2.12

60

1.00

1.50

2.00

65

.75

1.30

1.90

70

.50

1.70

2.40

75

.25

1.70

2.20

80

0

1.45

2.00

85

 

1.15

1.77

90

 

.85

1.54

95

 

.55

1.31

100

 

.25

1.10

105

 

0

.90

110

 

 

1.40

115

 

 

1.30

120

 

 

1.00

125

 

 

.75

130

 

 

.50

135

 

 

.25

140

 

 

0

 

The three sets of values listed in the table on page 2 are based upon Figures 1-3 and are dependent upon the length and number of production periods.  Use the column which most closely corresponds to the actual replacement program intended. 

 

The 80 week value for one cycle flocks is shown as zero as their production period is over and they’re intended for slaughter.  Birds of the same age in a two cycle program would have a value of $1.45 reflecting molting costs and their future egg production potential to a later age.  Similarly, the 80 week flock in a three cycle program would be worth $2.00.  Weekly amortization of values occurs at a much slower rate when extended production cycles are used.

 

For internal company bookkeeping, use the column which relates to the replacement program of the farm in question.  If a flock or flocks is to be purchased for use on the same farm, all ages may be represented.  Values are the same until peak value at 22 weeks of age, but older ages have different values depending upon their intended replacement program.  Each flock mush be evaluated separately based upon their future productivity.

 

If a flock is to be moved, it is best to wait until they can be molted shortly following the move.  Values must consider the following: fowl value if sent to market, hauling costs, the possibility of harming the flock through injury or disease exposure, the possibility of carrying disease to the new farm, and an incentive payment to the original owner for his efforts.  Birds at the end of the first cycle of lay might be valued at $.25 to $.50 each at their home site.  The per bird cost, losses, hauling costs, and molting costs must all be considered when determining the final net cost of purchasing flocks already in production.     A flock of a given age has more value in place than one which has to be moved.

 

The value of a flock to a new owner may not be the same as the “depreciated cost” to the original owner.  For this reason, the purchaser should project a price to offer, expected performance, and anticipated returns for the new flock to its probable selling date and compare this with other options. 

 

 

The table and figures on the previous pages should be used only as a guide.

 

Prepared by Donald Bell, Poultry Specialist, Emeritus, University of California, Riverside 92521

 

File: Hen value Sept 2002.doc