Relative Profit Efficiency of Feed Milling Systems Among Poultry Egg Producers in Ogun State

Abstract

The role of poultry egg consumption in ameliorating protein intake deficiencies in developing countries such
as Nigeria cannot be overemphasized. One way of encouraging increased egg production is by improving
profit that accrues to the enterprise. Feed accounts for over 70 percent of poultry production cost, thus
efficiency in the use of feed in production is a veritable source of increasing the profit of the producers. This
study thus investigated the relative profit efficiency of feed milling systems of poultry egg producers in Ogun
State. A total of ninety-nine poultry farms selected using simple random sampling technique was used for the
study. Data collected were analyzed using descriptive statistics to investigate the socio-economic and
institutional characteristics and stochastic frontier profit function (Cobb-Douglas) to estimate profit efficiency
of poultry egg producers in the study area. An average farmer in the sample was 44 years old; 84.8% were male,
81.8% had tertiary education and 66% were full-time farmers. Self-feed millers, toll feed users and commercial
feed users, were respectively 36, 21 and 42 percent of the respondents. Some 72% of respondents stocked dayold chicks and likewise 72% of the respondents used are a brown breed of birds. The average farm size was 9,
380 birds. Prices of all the variable inputs except that of labor significantly influence the profit efficiency of
poultry farmers while the prices of all fixed inputs also have significant effect. Result of the analysis further
showed that the profit efficiency of the farmers ranged between 17% and 99% with mean efficiency score of
82.45%. This indicated that the poultry egg farmers were not fully profit efficient and that there was 17.55%
allowance to improve profit efficiency. Furthermore, the result showed household size, extension service;
years of education, gender of respondent, marital status and non-farm employment were determinants of profit
efficiency. The average profit per bird for self-feed millers, toll-mill users and commercial feed users were
N1,879.45; N1,684.65 and N1, 257.41 respectively. The test of difference between mean profit efficiency
amongst those with different feed milling systems, type of bird stocked and breed of bird used were significant
at 1% level. Self-milling was the most profit efficient feed milling system for poultry egg producers in the study
area, followed by toll milling while the use of commercial feed was the least. Likewise, use of day-old-chicks
was the most profit efficient, followed by stocking of point-of-cage while point-of-lay was the least profit
efficient. The profit efficiency for those using is a brown breed of birds was better than those using nera black
breed of birds. The study concluded that there are opportunities for increasing profit efficiency in poultry egg
production by focusing policy on the profit efficiency factors and by supporting on-farm feed-mill production
projects.