Analysis of the profitability of micro broiler enterprises in Calabar Metropolis, Cross River State

Abstract

This study was undertaken to evaluate the profitability micro broiler businesses in Calabar metropolis. The specific objectives of the study were to evaluate the profitability of micro broiler enterprises in Calabar metropolis, analyses selected factors which affects the profitability of micro broiler enterprises and to identify the constraints faced by micro broiler enterprises in Calabar metropolis. It made use of primary data obtained from a random sample of 112 micro broiler operators. The data were analyzed using descriptive statistics, profitability ratios, cost and return analysis and Ordinary Least Square Multiple regression approach. The cost and returns analysis showed that the total variable cost of production per cycle amounted to N45,931,670.00 with cost of feed contributing 60.11 percent to the total cost. Total production cost per bird was N1,213.77 and total revenue per bird was N1,862.39, showing a gross margin of  N684.96 and a net income of N648.62 per bird produced. The rate of return on sales (0.35), rate of return on investment (0.53), rate of return on variable cost (1.55) and operating ratio (0.63) all show that micro broiler business in Calabar metropolis was profitable. Output of broiler (flock size) (p<0.01), cost of day old chicks (p<0.05), and transportation fare (p<0.1) were significant to the variation in maximum variable profit. The most dominant constraints identified in the study included; inflationary/recessionary trends, high cost of inputs, poor access to credit, high competition and disease/pest in that order. The study recommended that micro broiler operators should organize themselves into cooperative societies to enable them enjoy the benefits of economies of size and credit facilities from lending agencies. 

Keywords: Profitability, enterprises, micro, broiler, cost and returns