Margin Over Feed Cost:

Bio-economic Responses
in Broiler Chickens

Peter Chrystal, PhD.

Senior Poultry Nutrition Specialist
19 November 2024

11/18/2024 2
 Introduction

11/18/2024 3 AVIAGEN PROPRIETARY

 Water, Protein (Amino Acids), “Energy” Minerals, Vitamins & “Additives”

Feed will only be as good as

the first limiting nutrient!

Water Energy

Liebig’s Law of the

Minimum,
Sprengel, 1828

(e.g. Lysine)
Protein (amino acids) Vitamins & minerals

11/18/2024 4
 Economic principles

11/18/2024 5 AVIAGEN PROPRIETARY

 What do we Mean by “Economic Principles”?

• Let’s use a manufacturing example such as a ball-point pen manufacturer

• The costs of raw materials are well known
• The raw material cost in making a pen can easily be measured
• The waste is also easily measured and the business finds ways to reduce waste
• Efficiency is a key parameter
• How many pens per staffing unit can be produced?
• Are staffing numbers correct?
• Advancing technology improves the manufacturing process
• Focusing on reducing variable costs (e.g. electricity) is important
• Revenue for the pens
• Maximum revenue is sought in the correct markets
• Over-supply of the market will reduce revenue
• Time is important
• The more pens one can produce in a year, the lower the relative fixed overhead costs such as factory
premises and staff costs
• The entire aim of the business is to maximise ROI per year

11/18/2024 6
 What do we Mean by “Economic Principles”?

• What about a broiler chicken producer?

• The costs of raw materials (day-old, ventilation etc) are known but will vary somewhat
• The largest raw material cost is feed and that can easily be measured
• The waste is also easily measured (e.g. mortality) and the business finds ways to reduce waste
• Efficiency is a key parameter
• How many broilers per staffing unit can be produced?
• Are staffing numbers correct?
• Advancing genetics improve the growing process
• Focusing on reducing variable costs (e.g. feed ingredients) is important
• Revenue for the chickens
• Maximum revenue is sought in the correct markets
• Over-supply of the market will reduce revenue
• Time is important
• The more chickens one can produce in a year, the lower the relative fixed overhead costs such as broiler (and broiler
breeder) housing costs
• The entire aim of the business is to maximise ROI (or should be) YET, we are poor at doing this in
broiler production!

11/18/2024 7
 What do we Mean by “Economic Principles”?

• Producing broilers chickens is a lot more complex than producing ball-point pens,
right?
• We are dealing with a production animal that varies in its growth performance
• The environment plays a crucial role
• Disease challenges and risks
• Feed quality
• Specification
• Digestibility
• Toxins
• Feed bulk
• Water quality
• Management factors such as stocking density, feeder and drinker space etc
• Continuous genetic advancement
• Unpredictable volatile markets for feed ingredients and broiler revenue
• We end up trying to reduce costs (especially feed) whilst chasing better broiler growth
performance and lose focus on ROI because it is too difficult to do

11/18/2024 8
 The Parameters we Tend to Focus on

Parameters considered A good measure of profit? Comment

Improve FCR No Improving FCR increases feed cost

Improve liveweight for age No Improving liveweight might change feed cost

Decrease mortality Yes Mortality is a "dead-loss"

Improve EPEF Maybe A combination of the above factors

Feed cost reductions No Usually results in poorer growth performance

Fixed cost reductions Yes But, this effect is usually minimal

Variable cost reductions Yes But, this effect is usually minimal

This should be the primary goal of broiler

Maximise margin/m2/year YES
production

11/18/2024 9
 Introduction: Setting the Scene

• Theory of feed intake (Emmans, 1981)

• Birds (and other animals) have a single purpose in growing as fast as possible
• To reach maturity as soon as possible &

• Reproduce

• Their genetic potential body protein growth rate can be predicted

• Allows their amino acid and energy requirement to be predicted

• Given the nutrient concentration of the feed, the desired feed intake can then be predicted

11/18/2024 10
 Introduction: Setting the Scene

• Rule number 1
• Birds do not eat in nutrient percentages, they have a feed intake resulting in amounts (mg)
of nutrients and calories of energy per day
• Rule number 2
• High yielding broiler chickens have a growth performance potential that exceeds commercial
reality
• Rule number 3
• The constraints to achieving the genetic potential (maximum nutrient intake) are
• The environment (temperature and humidity)
• Disease challenges and vaccinations
• Management factors (feeder and drinker space, stocking density etc)
• The feed itself (bulk density, water holding capacity and pellet/crumble quality)
• Rule number 4
• One solution does not apply to all (the breeder nutrition guides are ONLY a guide)
• The Nutritionist needs to find the optimum balance between “response”, “dietary nutrients” and
“economics”

11/18/2024 11
 Genotype and state
(The Animal) Nutritional
constraints
Nutritional (water holding
constants capacity)
Nutrient Gut capacity
“requirements”

Constraints
Resources
High temperature &
humidity
Feed (environmental
constraints)

Management & bird

constraints
(Day-old chick weight, SD,
Environment lighting, disease, etc.)

Desired food intake Constrained food intake

(Gous & Fisher, 2008)

Actual food intake
11/18/2024 12
11/18/2024 13
 Genetic Improvement

11/18/2024 14 AVIAGEN PROPRIETARY

 Liveweight (kilogrammes)

11/18/2024
10

0
1
2
3
4
5
6
7
8
9
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
31
33
35
37
39
41
43
45

1925
47
49
51
53
55
57

1945
59
61
63
65
67
1965 69
71
73
75
77
79
81
1985

83
85
87
Age post-hatch (days)

89
91
93
2005

95
97
99
101
103
105
2024

107
109
111
113
115
117
119
121
123
125
127
129
131
133
15

135
137
139
141
Improvements in Broiler Performance (Gompertz Growth Curve)

143
145
147
149
151
 Defining the Response
of Broiler Chickens

11/18/2024 16 AVIAGEN PROPRIETARY

 Modelling

11/18/2024 17
 Maximising profit with simulation modelling

• The theory,
• It is when we know everything, but nothing works

• The practice,
• It is when everything works, but nobody knows why

• Now we have brought together theory and practice:

• Nothing works…...and nobody knows why

11/18/2024 19
 Dietary Nutrient Response Differs Based on Environment

Canada
Ireland

APAC

Papua New Guinea

Ecuador

Brazil

Australia Fiji
South Africa

New
Zealand

11/18/2024 20
 The Response of Ross 308 Broilers

Ross 308 as-hatched broiler performance (40 days post-hatch)

Liveweight (g) Feed intake (g) FCR (g/g)

2022 Ross standard 2798 4175 1.493

2024 APAC farm 2127 4020 1.713

2022 Aviagen trial (NZ) 3458 4550 1.301

11/18/2024 21
 Different Environments Result in Different Responses

APAC farm

11/18/2024 22
 Different Environments Result in Different Responses

New Zealand trial unit

11/18/2024 23
 Papua New Guinea

New Zealand
11/18/2024 24
 There are Interactions Between Environment & Performance

11/18/2024 25
 Effect of Environmental Temperature on Heat Production/loss

Maximum heat loss

Heat production
/loss 

Minimum heat loss


Low High
Environmental temperature

(Gous & Fisher, 2008)

11/18/2024 26
 Effect of Environmental Temperature on Heat Production/Loss

Consequence is that feed intake

will drop at high temperatures
Heat production
H1
/loss 

H2


Low LCT UCT X℃ High
Environmental temperature

(Gous & Fisher, 2008)

11/18/2024 27
 Introduction ► Ross 308 Broiler Growth Curve 2022
Correlation between curves = 0.999993

6,000 120
Male FF Performance
(Std = Potential)
5,000 100
Average liveweight (grammes)

Average daily gain (grammes)

4,000 80

3,000 60

2,000 40

1,000 20
In the EFG Model, the Gompertz
curve can be modified
- -
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57
Age post-hatch (days)

Ross 2022 ALW (Gompertz) ADG (Gompertz) ADG Ross 2022

11/18/2024 28
11/18/2024
Liveweight (kilogrammes)

0
1
2
3
4
5
6
7
8
9
1
4
7
10
13
16
19
22
25
28
31
34
37
40
43
46
49
52
55
58
61
64
The Gompertz Growth Curve

67
70
Inflection point

73
ALW (Gompertz)

76
79
82
85
88
91
Males age post hatch (days)

94
97
100
103
ADG (Gompertz)

106
109
112
115
118
121
124
127
130
133
136
139
142
145
29

148
151
0.00
0.02
0.04
0.06
0.08
0.10
0.12

Average daily gain (kilogrammes)

 Feed Form: Mash,
Crumbles or Pellets?

11/18/2024 32 AVIAGEN PROPRIETARY

 Factors Influencing Pellet Quality

(Huang, 2014)

11/18/2024 33
 Pellet Hardness Versus Pellet Durability Index (PDI)

Mechanical “tumble test” Pneumatic (air) tester Kahl pellet hardness tester

11/18/2024 34
 Pellet hardness versus pellet durability index

(Wang, 2021)

11/18/2024 35
 Feed Form: Crumbles

11/18/2024 36
 Pellet Quality and Other Considerations
New Zealand

• Pellet quality

• Stocking density

• Feeder and drinker space

• Lighting
• Duration & intensity

• Vaccinations & bird handling

11/18/2024 37
 Feed Density (Bulkiness) &
Water Holding Capacity

11/18/2024 38 AVIAGEN PROPRIETARY

 Feed “Bulkiness” and Gut-fill

• Measured by water holding capacity (WHC)0.67

Maximum scaled feed intake (SFI): SFImax (g/kgBW /d) = 369.4 – 115.7 X WHC + 11.96 X WHC2
160
Maximum SFI (g feed/kg BW0.67/d)

150

140

130

120

110

100

90
2.5 2.6 2.7 2.8 2.9 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4.0
Water holding capacity (g water/g feed)

(Nascimento et al., 2020)

11/18/2024 39
 Digestibility is Important too!
Raw material Protein digestibility (%) Raw material Protein digestibility (%)
Non-bound amino acids 97Lentils 90
Maize prime gluten 95Lupins 88
Algae (dried) 90Soyabean meal (SA) 88
Maize (Corn) 86Blood meal 87
Peas 84Feather meal 87
Oats 84Fishmeal 87
Wheat 82Soya (full fat) 87
Field beans 81Groundnut meal 85
Triticale 80Sunflower meal 83
Biscuit meal 80Linseed meal 80
Rye 80Poultry offal meal 80
Barley 79canola meal (& seeds) 78
Rice grain 75Palm kernel meal 77
Maize DDGS 70Meat and bone meal 75
Sorghum (Milo) 68Copra meal 71
Wheat bran 65Cottonseed meal 70
Cassava (Tapioca) 15Rice bran 65
(Source: Premier Nutrition Atlas, 2014)
11/18/2024 40
 Faecal Organic Matter – Ignore at Your Peril

• FOM(%) = OM(%)* – SID crude lipid(%) – SID crude protein(%) – SID carbohydrate(%)**
• *OM (organic matter)

• **SID CHO(%) = 5.848 × AMEn (MJ/kg) – 2.3158 × SID crude lipid(%) -1.0626 × SID crude protein(%)

• Digestibility is extremely important but so is the FOM

• FOM has a metabolic cost of 3.80 KJ/g and is vitally important in hot climates (Emmans, 1994)

11/18/2024 41
 Disease Challenges

11/18/2024 42 AVIAGEN PROPRIETARY

 The EFG Model

Fiji

Inclusion Body Hepatitis

11/18/2024 43
 The EFG Model

Fiji

11/18/2024 44
 Broiler Growth Response to
Changes in Dietary Energy
& Balanced Protein

11/18/2024 45 AVIAGEN PROPRIETARY

 Understanding “Response” Versus “Requirement”

• “Requirements” cannot be defined for 3 important reasons

1. Growth response to increasing input of any limiting variable is curvilinear

2. Response curve changes based on the animals (genetic potential) and environment they
are in

3. The economic “optimum” shifts based on input costs versus revenue

Morris, 1983

Environmental effect should be included!

11/18/2024 46
 ADG (g/d) to 2.5Kg (USA Data)
79.0
79.0 76.8g/2.4% – 98% ME x 104% BP
75.4g/0.5% – 98% ME x 100% BP NEW (2022) GLOBAL
NEW (2022) APPB
78.0
78.0

77.0
77.0
76.4
76.0
76.0
75.0
75.6
75.0
75.0 75.0

74.0
74.0 73.9

73.3
73.0
73.0

72.0
72.0

71.0
71.0
94
94 96
96 98
98 100
100 102
102 104
104 106
106 108
108 110
110 112
112
BP as % of Global
BP as % of Global, 2019

96
96 98
98 100
100 102
102 104
104

11/18/2024 47
 FCR to 2.5Kg (USA Data)
1.400 1.301 – 98% ME x 100% BP
NEW (2022) APPB

1.350
1.310
1.263 – 98% ME x 104% BP
1.338
NEW (2022) GLOBAL
1.300

1.294 1.256
1.286
1.250

1.200

1.150
94 96 98 100 102 104 106 108 110 112
BP as % of Global ‘19
96 98 100 102 104
11/18/2024 48
 Responses of Broilers to BPxME – Modelling USA Data
As-hatched broilers: Liveweight at 35 days post-hatch (g)

Dig Lysine (%)

1.000 1.100 1.200 1.300 1.400
& AMEn (kcal/kg)

2822 1971 2122 2231 2297 2322

2910 1966 2123 2237 2310 2341

2998 1955 2118 2239 2318 2354

3086 1938 2107 2234 2319 2362

3174 1916 2091 2224 2315 2364

3262 1888 2069 2209 2306 2360

(Renzelman, 2023)
11/18/2024 49
 Responses of Broilers to BPxME – Modelling USA Data
As-hatched broilers: Feed Conversion ratio at 35 days post-hatch (g)

Dig Lysine (%)

1.000 1.100 1.200 1.300 1.400
& AMEn (kcal/kg)

2822 1.684 1.577 1.496 1.442 1.415

2910 1.658 1.548 1.465 1.409 1.379

2998 1.636 1.523 1.437 1.378 1.346

3086 1.616 1.501 1.412 1.351 1.317

3174 1.599 1.481 1.391 1.327 1.290

3262 1.585 1.465 1.372 1.305 1.266

(Renzelman, 2023)
11/18/2024 50
 Responses of Broilers to BPxME – Modelling USA Data
Liveweight at 35 days post-hatch (g)

(Renzelman, 2023)
11/18/2024 51
 Broiler economics for energy & protein (BEEP)

11/18/2024 52
 Predicted Weight Gain Response (Aus)

Only slightly curvilinear!

11/18/2024 53
 Response of Broilers to Protein & Energy (NZ)

Linear responses are best-fit!

11/18/2024 54
 Responses of Broilers to BPxME – Modelling USA Data
FCR at 35 days post-hatch (g food/g liveweight)

(Renzelman, 2023)
11/18/2024 55
 Broiler economics for energy & protein (BEEP)

11/18/2024 56
 Complete Prediction to 50 Days Post-hatch (AUS)

Only slightly curvilinear!

11/18/2024 57
 Complete prediction to 40 days post-hatch (NZ)

Linear responses are best-fit!

11/18/2024 58
 Costs and Revenue

11/18/2024 59 AVIAGEN PROPRIETARY

 Costs and Revenue

• Costs begin with the broiler breeder & hatchery

• The day-old broiler arrives on-farm at a cost of ~ 0.50 USD
• The sale of the broiler is the only source of revenue
• Dictated by market requirements in terms of product
• Live, dressed, portions or further processed
• Small or large bird market?

• Costs associated with rearing the broiler are composed of two components
• Firstly, fixed costs
• Secondly, variable costs
• The “economic optimum” exists where margin over all costs is maximised & finding this
point is complex!

11/18/2024 60
 Fixed Versus Variable Costs & Revenue
Feed remains the largest variable cost accounting for up to 70% of poultry production!

11/18/2024 61
 The Best Growth Performance ≠ Maximum Profit
Maximum margin per m2/year

Response Feed cost

Profit

Weight gain

Feed intake

(Gous, 2011)
Nutrient density (ME/kg)
11/18/2024 62
Economic assessment (margin over feed cost)
Based on the Brazilian Tables of “ideal protein” & EFG optimiser
(Cobb 500 & Ross 308 broilers) Optimums: Whole, 0.93 & 55.16 ₡; Dressed, 0.96 & 93.19 ₡; Portions, 0.98 & 179.75 ₡

200 y = -1331.8x2 + 2619.3x - 1108.1

Importantly: Cut-up portions have
Margin over feed cost (US$ cents/bird)

180
a 3.26-fold larger margin than
160
whole birds, yet the ideal protein
140
differs by only 5.4%
120
100
y = -818.2x2 + 1565x - 655.16 Thus, finding the “economic

80 optimum” of cost, revenue and

y = -570.34x2 + 1059.4x - 436.79 broiler response is all important
60
40 for integrators,
20 Ultimately, this is the role of the
- Nutritionist
0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3
Ratio of balanced protein1
Whole bird Dressed bird Cut-up portions
Asevedo et al., 2017

11/18/2024 63
 Conclusions

Liebig’s Law of
the Minimum,
Sprengel, 1828

11/18/2024 64 AVIAGEN PROPRIETARY

 Conclusions (“Take-Home Message”)

• The best performance is almost certainly not the most

economical, particularly in the APAC region

• The primary goal of the nutritionist is to be able to predict the

responses of growing broilers to a given set of nutrients and
feed intake within a given environment
• Broilers do not eat in % they have a nutrient intake
(mg/day)
• Genetic improvement will continue albeit at a slower rate
• It defines the difference between a “formulator” and a
“nutritionist”

• Constraints need to be identified and estimated as

accurately as possible

11/18/2024 65
Thank You…

www.aviagen.com