Assessment of the profitability of poultry egg farming in Ogun State, Nigeria

Abstract

Profit maximization which is one of the common objectives of business enterprises is grossly dependent
on how best productive resources are harnessed. In the light of this, this study was carried out to
determine the profitability and resource use efficiency of poultry egg farmers in Ogun State, Nigeria.
Primary data were obtained with the aid of structured questionnaire from a cross section survey of 120
farmers drawn through multi-stage sampling procedure. Descriptive statistics, cost and returns analysis,
and Cobb-Douglas regression model were used to analyze data obtained. The results of the analysis
showed that majority (90%) of the poultry egg farmers are males with 77.5% of them married. The average
age and mean years of experience were 43 and 9 years respectively with majority of them having formal
education. The study revealed that the poultry egg production enterprise is profitable in the study area as
indicated by the gross margin of N2,118,280.1 and a net income of N2,011,857.16 per one thousand birds
per production cycle. The profitability ratios further reveals that for every N1 invested in the enterprise, a
farmer earns N 0.45 gross margin and N0.43 net income which are higher than the commercial interest rate
of 21%. The return to scale estimate of 0.99 revealed that poultry enterprise in the study area are in the
stage II of the production surface The study further revealed that most productive resources excluding the
flock size maintained by the poultry egg farmers are being over utilized. The study recommended among
others, directional extension services aimed at raising technical knowledge of poultry farmers aimed at
effective allocation of productive resources is necessary in order to improve profitability.