How to work out what a crate of eggs costs you to produce

Step one: pick a period, not a bag

A bag of feed does not turn into eggs on the day you buy it. Pick a week or a month, add up everything that went into the flock during it, and count the crates that came out. The period is the unit, not the bag.

A week is easier to remember. A month is more accurate, because it smooths out the week you bought four bags and the week you bought none.

Step two: feed, at what it cost you to get it here

Feed is sixty to seventy per cent of the total, so a small mistake here throws out everything else. Use the price you paid, plus the transport that brought it, plus anything you paid to offload it. A bag that cost ₦18,000 at the mill and ₦900 to bring home cost you ₦18,900.

This is the most common mistake: using the invoice price. What the feed cost you is everything you paid to get it to the farm.

Step three: the costs nobody writes down

Each of these is small, but together they add up: drugs and vaccines, vitamins in the water, the farm hand who cleans and collects (even if it's family), diesel or the generator's share of it, crates and trays if you buy them, repairs, and the trip to the market.

Two more get left out because they don't feel like money: the birds that died and the eggs that broke. A bird that dies in month six has eaten five months of feed that no crate will pay back. Count it.

Step four: the birds themselves

Point-of-lay birds cost money too. If you paid ₦4,200 a bird and she lays for about seventeen months, she costs you roughly ₦247 a month before she has eaten anything. Spread that across the period like any other cost, and take off whatever you get for her as a spent layer at the end.

Step five: divide

Add up everything from steps two, three and four. Divide by the crates you sold or can still sell, not the crates you collected, because broken eggs are a cost. The answer is your real cost per crate.

Do it twice, a month apart. If the two answers are far apart, the reason is nearly always feed: the price changed, or a bag was never written down.

What to do with the number

First, know the lowest price you can sell at without losing money, and don't go below it, even for a good customer. Second, know how a change in the feed price moves that number, so you can raise your price before the month ends. Third, when an offtaker asks for a volume discount, you'll know exactly how much you can give.

You can do all of this on paper. The hard part is collecting the numbers in one place and doing the same sum every month, especially in a busy week. That is what Maaz Buk does for you.