THE TURKEY BUSINESS in California ARTHUR SHULTIS AND W. E. NEWLON CIRCULAR 170 APRIL 1951 L *§ ^ California Agricultural Extension Service College of Agriculture • University of California Thinking of raising turkeys? This circular points out the factors that should be considered before going into the turkey-raising business in California. It covers information relative to raising meat birds, and the production of hatching-eggs. It does not give detailed information on the actual operations involved in raising the birds. California turkey growers are favored by the climate, but penalized by price margins arising from being in an area deficit in feeds and surplus in turkeys. With a larger local demand for turkey meat, some of their problems would disappear. During recent years, California has led the country in turkey production and there is evidence to show that the turkey business in the state will remain profitable for some years. However, before rushing into the turkey business, the prospective grower would do well to consider these factors: See page Varying profits 3 The California situation 4 The immediate outlook 4 The risks involved 5 Meat production 6 Hatching-egg production 6 Hatching, breeding 6 Marketing problems 8 How big should the business be? 8 The feed situation 9 How much space is needed? 9 Sample inputs and costs 11 How much investment is needed? 11 What about credit? 11 The factors making for success 11 The Authors: Arthur Shultis is Extension Economist, Farm Management, and an Associate on the Giannini Foundation. W. E. Newlon is Extension Poultryman. The Turkey Business in California Arthur Shultis • W. E. Newlon Turkey raising is a specialized business Turkey production in California is an intensive, specialized, commercial busi- ness. A large number of birds are raised in a small area and fed purchased feed. The proportion of cash costs to income is high, and the profit margin is small. Many people enter the business each year and some fail, but others continue and make a living over the years. Efficiency of production must be high to make a satisfactory income. Some years are much better than others, as determined by the price of turkeys and costs of feed. The profits will vary from one year to another Profit varies considerably from year to year and from farm to farm. There are two main types of influences— those from off the farm and those that affect the effi- ciency and economy of production on the particular farm and are somewhat under the control of the individual producer. A grower's decisions in choice of stock, disease control, buying of feed, and marketing his turkeys may result in a good profit or a considerable loss under the prevailing price and cost conditions. Turkey prices as determined by total production— Supply— and consumer abil- ity and desire to buy— Demand— are largely beyond the control of the grower but vary considerably from year to year, as shown in table 1, and greatly affect his returns. The price of feed, which makes up about 70 per cent of the total cost, is also an important profit factor beyond the control of the grower except through his selection and purchases. Table 1 also shows the turkey-feed ratio for the last 10 years. This figure is TABLE 1. Turkeys Raised, Prices, Consumption, and Cost Ratios Turkeys raised California cash Farm price per pound U. s. Turkey-feed ratio United States California receipts from turkeys United States California consump- tion* United States California thousands thousands $1,000 cents cents pounds pounds pounds 1940 34,047 3,359 8,826 15.4 14.1 3.5 8.4 1941 32,902 3,527 12,231 19.9 20.9 3.5 9.2 8.6 1942 32,805 3,280 19,430 27.5 30.0 3.7 9.8 10.2 1943 32,309 4,002 22,272 32.6 33.5 3.3 11.1 11.7 1944 35,616 4,762 29,201 34.0 33.7 3.3 10.8 10.3 1945 44,221 5,762 35,918 33.6 32.9 4.3 11.5 10.8 1946 40,724 4,610 35,221 36.2 33.8 4.5 9.7 8.6 1947 34,970 4,057 29,618 36.4 34.2 4.5 7.7 6.7 1948 31,788 4,706 41,367 46.7 46.7 3.6 9.8 9.2 1949 41,965 6,824 46,227 35.1 33.3 4.1 11.0 9.0 *Does not allow for exports. Beginning in 1941 consumption figures apply only to civilian population. Source of data: California Crop and Livestock Reporting Service. California Annual Poultry Hatchery Report for 1949. [3] arrived at by dividing the farm price per pound of turkey, by the price per pound of feed. For instance, if the farm price for turkeys was 30.6 cents, and the cost of feed was 4.08 cents, then the turkey- feed ratio would be 7.5— a pound of turkey paid for 7.5 pounds of feed. The higher this figure is, the greater is the opportunity for profit, since it takes only about 5 pounds of feed to produce a pound of turkey. Here is a roundup of the California situation California turkey growers have a natu- ral production advantage in the state's climate— mild winters and a dry summer. In recent years it has become the leading turkey-producing state in the country. This natural advantage, however, is partially offset by certain transportation margins. Because the high production of turkey meat has outstripped the state's consumption (in spite of a huge popula- tion growth) some of the birds must be shipped out to distant markets. Califor- nia also uses more grain and feed in- gredients than are produced in the state, so part of the feed must be shipped in, and is higher in price than in many other states. In table 1 it will be noted that the turkey-feed ratio for California has been less favorable than that for the entire country in 7 of the last 9 years. However, good marketing and feed-supplying agen- cies, high efficiency of production, and a growing local market should permit a large and fairly profitable turkey busi- ness to continue in California. Consider the immediate outlook each year The price of turkeys at marketing time cannot be forecast accurately when plan- ning operations for the season ahead. There are, however, some indications as to whether the price may be higher or lower than the preceding year. Each fall the Bureau of Agricultural Economics of the United States Department of Agri- culture issues outlook information and forecasts which may be helpful in plan- ning for the next year. If it looks as if consumer purchasing power may be higher and turkey production lower, then higher prices may be expected and it might be a good year to go into the turkey business. The turkey grower already in the busi- ness will probably make a little more or lose less by operating to capacity every year rather than trying to hit the good years and not raise turkeys in the poor ones. Anyone contemplating going into the business should consider carefully the immediate future. If the outlook is good, it should be easier to succeed; if the out- look is poor, additional finances and ef- fort will be required. As this is written in December, 1950, the outlook for 1951 is good. Consumer purchasing power will be high and prices of everything are trending upward. Also, the last two years, 1949 and 1950, were years of heavy tur- key production and low turkey prices. Many turkey growers will have lost so heavily they will not be in a position to continue, and with high employment there won't be so many enthusiastic be- ginners entering the business. By the time this circular reaches many of the readers, the above forecast of a better year for turkey growers in 1951 will be shown to be right or wrong. It is included simply to illustrate the possi- bility of using outlook information in turkey operations. If the outlook is good, the reader may go ahead in confidence; if it is poor, he should be very cautious and practice stringent economy in capi- tal outlay, in production expenditures, and in personal living. The latest outlook information from federal and state agen- cies may be obtained or consulted at any of the local Agricultural Extension Serv- ice (Farm Advisor) offices. These are located in nearly all counties in the state. [4] There are many risks disease and death losses when improperly to be considered handled. Poults are expensive and may die from a number of causes at various The raising of turkeys is not only un- ages before reaching market age. To suc- certain as to price but it is subject to ceed the grower must get pullorum-free TABLE 2. Meat-Turkey Study Record Averages Stanislaus County 1940-1942 Fresno and Tulare counties 1947 1948 1949 Number of records 14 3,433 77 18.9 .60 $ .40 2.9 2.1 22 4,610 86 19.6 .47 $ .86 3.0 2.0 22 5,494 83 19.3 .52 $ .86 3.0 2.0 5.0 $4.45 20 6,656 85 20.0 .51 $ .87 3.1 1.9 Average number raised per record Per cent of poults raised Average weight per bird raised Hours of labor per bird raised Value or cost of labor per hour Pounds of mash per pound produced Pounds of grain per pound produced Total pounds per pound produced . . Average price per cwt. mash and grain .... 5.0 $1.96 5.0 $4.49 5.0 $4.08 Cost and income per bird raised : Feed cost $1.90 .48 .25 .09 .04 .06 $4.52 .67 .41 .21 .08 .09 $4.43 .85 .45 .21 .09 .11 $4.17 .90 .44 .22 .12 .12 Poult cost Hired and operator's labor Miscellaneous, fuel, etc. . . Depreciation on facilities Interest on investment at 5% Total cost $2.82 .03 $5.98 .12 $6.14 .10 $5.97 .06 Less miscellaneous income, manure, and sacks Net cost $2.79 $4.29 $5.86 $7.09 $6.04 $9.23 $5.91 $6.14 Average value Management income Farm income per bird raised* Average price per pound $1.50 1.68 22.7c 14.8 $1.23 1.53 36.1c 29.8 $3.19 3.48 47.8c 31.3 • $ .23 .51 30.6c 29.5 Net cost per pound Management income per pound .... Farm income per pound* 7.9 8.9 6.3 7.9 16.5 18.0 1.1 2.5 * Farm income is the amount by which income exceeds cash costs and depreciation. It is the total amount received by the producer for his management, labor, and invested capital. [5] poults from good breeders, brood and raise them away from chickens and other disease exposure, and feed and handle them well. Free bulletins and advice that should be helpful are available from the College of Agriculture of the University of California, or through local Agricul- tural Extension Service offices. Meat production. Most turkey rais- ers are commercial meat-bird producers only. They buy baby poults from a hatch- ery and raise them to market age over a period of six to nine months. Since poults are obtainable only during a few months in the spring, this business is not a year- around enterprise. After marketing, there will be a few months in which to prepare for the next year's poults and possibly take a vacation. Table 2 shows costs, re- turns, and earnings in turkey meat pro- duction, as compiled by the Agricultural Extension Service in conducting turkey management studies in the San Joaquin Valley area. Hatching-egg production. Another important type of turkey business is the production of hatching-eggs. This enter- prise begins in the fall with the selection of suitable breeding hens and toms from among the birds raised. Hatching-egg production begins in the winter or early spring in California and is usually con- tinued on into late spring, as long as there is a demand for the eggs at profitable prices. At the end of the breeding season (usually in April or May) the breeding birds are sold for meat. This enterprise is usually combined with growing birds for meat, so the combination furnishes year- around use of labor and equipment. The hatching-egg producer finds it more profitable to produce eggs over a long period and in excess of the number needed for his own poults and, therefore, needs a good market for most of his eggs. The combination of hatching-eggs and the raising of meat birds is a farm busi- ness requiring more experience and atten- tion to detail than the strictly meat enter- prise. A profit from hatching-egg enterprises requires the production and sale of a large number of eggs per hen, which in turn requires good stock and good man- agement as well as a long marketing pe- riod. Table 3 shows average inputs, costs, and returns for hatching-egg production in San Diego County for the nine years, 1933 to 1946. Hatching, breeding. The hatching of turkey eggs is another specialized business requiring special knowledge and facilities. The hatcheryman is an impor- tant link between egg producers and tur- key raisers. To be successful he must have a considerable volume of business over a fairly long hatching season, and must also offer poults of satisfactory breeding and livability. There are about 140 tur- key hatcheries in California and about 10 per cent of the poults hatched are shipped out of the state. The turkey breeder is at the top of the turkey profession in that he applies the science of genetics to his work and fur- nishes the superior breeding stock essen- tial to an efficient industry. Although some turkeys are raised in almost every county in California, com- mercial production is concentrated in the warmer, dryer regions— the San Joaquin and Sacramento valleys and adjoining foothill areas, and some parts of southern California. A warm, dry climate with few late spring rains or early fall storms is preferable. Isolation from other poul- try and turkey farms is important to avoid disease. Nearness to economical sources of feed and established market- ing agencies is advantageous. Areas in California with a considerable turkey concentration are well served by private and cooperative agencies supplying feed and marketing turkeys. For hatching-egg production it is im- portant to be in an area where assistance in selecting and blood-testing the breed- ing birds is available and with well estab- lished market outlets for the eggs. The San Joaquin Valley is the most important [6 o coco 00 rH t-00 rH COIONW c4 'cm© to co co o> to cs c- I ^ "^ rH CM OS CO rH rH rH I NN CO " rH | CO to- «9- OS CO CO to t-COcN co •<* -tf oooo q OOJ ri CM rH J CSrH O CO CO 00 00 CO to CO O CO CM rH t- OS I rH lO CD CO CM "<# CM CM CO llON co ' i-i *c4 I oo (fr I to ^0 I 7 00 o 0) o > < I. o u o a ■o 3 *- 0) o -X u 3 C 3 o u o 8) O c tn rHCO rH lO CM lOrHCO OS t- CO 00 CO CM rH coos t> rHlOCM t> "cod to CO I lO CO lO t- CO 00 "# llOt- OS lO OS W CM CM to lOCO CO * rH " iH I OS " to I «9- tow rHCM 00 lO 00 t-eo £ CO CM CMrH *#0 CM OCO«tf C- CO *0*d to- to tH f CO O O t- lO CO O CO lO CM CM t> CO "rH "rH to rHCO 9 ri os co to «tfCS rid CMrH | CO00 CM CO lO rHCO CM *c4d to- to CO rH O CO CO CM t> lO CO O -^ rH CM 00 CO "rH to OS CO lO co CM rH 00 rH CD tO lO COCO CO CO CO CO CO CM "CMO to- to rH 00 00 lO CO OS O CM CM W CO rH rH CO CO to- % t* COW rH t-CO CM ''tf 4 CO CO HIOC* CM *CMO to- to- lO O lO OS CO rH rH CM CM * to C-rH OS lO CM (N <* CO CM COCO CM CO lO O CO to CMO to CO O CO -^ CO CM rH 00 CM ■>* CM rH rH CO CM* to rH CO CO lO OS t-rH CO LO to OS 00 CO 00 rHCM rH owoeo c4d to to CO 00 COO O OS r-5 to- " r " 1 *"" cqt-o O to- rH OS OOOSCO CM CM OSI> lO CO CM CO 00 00O CO CM CO rHOS ^ C"* CO CO CO fc" ^ OS co oo to o x* ^J* *rH to to CDcN t> OCOrH OS I rHtN I rH C- oooio CO lO CM CN CO CO lO O »OCO rH rH O CM "rH to •^*oo ooo p co © na,p 8 ° gS o P .2 3 la 2$ o 8 a a> .P w P n C-3HB 3'- S 1 f- eS CJ 5 " "S » bo be I (-■ a> Q. 5& 3d .sags ©2. •*■> ^i p« iill a 2 « Aft *§"h« ,Pt o »- 5 ^ 2 S e8 s CO s © i § ! O co o © © *J bi b CO ©^3 e9H * "S *> © o •sS o as ^S c3 O +» o O P Eh -5 CO CO CM CO OS CM "tf rH bo bo © P bo© P-d •P *-* 3|| S §* o o *- 2 S £ ««-i »N Pi « p 2 •^ s © 8.S.S Sil S c3 ij «D » p © 0) o 11 a m 'I Ik w fl 2 ill hatching-egg area, but Riverside and San Diego counties are also areas of consider- able production of early hatching-eggs. Sell at the right time, through favorable outlets Turkeys are sold live by the majority of commercial producers. They are sold to local buyers at the ranch, or shipped on consignment to more distant markets, or delivered to a cooperative association which dresses and markets them. Finding a market is usually not a problem, but the choice of agency and time of selling may greatly influence the price received. The producer must consider many factors, such as the weights of his birds, the sea- sonal price trend, and the relative prices in various alternative markets. Local sale of dressed birds is not an impor- tant outlet for large commercial pro- ducers, although some favorably located producers retail most of their birds at roadside stands. The business should be of adequate size It is important for the turkey producer to have a size of business that meets his income needs and fits his available labor, farm area, and facilities. An average net farm income over the years of about a dollar a bird is a reasonable expectation, so to average between $2,700 and $3,000 net income a year will require 2,700 to 3,000 turkeys raised and sold. With aver- age success, raising 80 per cent of the poults started would mean beginning with about 3,600 poults, as shown in table 4. Considering a half hour of labor per bird raised, the 1,440 hours required would mean about 6 hours a day for 8 months. There may be some advantage in rais- ing turkeys in connection with some other farm enterprise, such as a small dairy or crop farm but never chickens. More than one source of income im- proves the chance of making some profit each year. Full year-around employment usually results in a larger income in farm- ing as in other activities. Consider a combination of meat and eggs A hatching-egg enterprise is practi- cally always associated with a turkey- raising enterprise, at least to the extent that enough turkeys are raised to furnish the desired number of breeding hens after culling or selection and testing for pullorum disease. On the basis of aver- ages shown in table 3, one might con- clude that a net farm income of $3.00 a hen should be a reasonable expectation with good management, in a good hatch- ing-egg district. An enterprise of 500 breeding hens would provide employment of about 1,000 hours (about 6 hours a day for a period of 6 months) and a possible net income of $1,500. This enterprise would need to be combined with the raising of at least 1,500 turkeys to provide the 500 breeding hens. It could be combined with as many as 2,500 since there is only an overlap of two months or so in the spring after poults are obtained and before the breeding birds are sold. Such a combi- nation would provide year-around em- ployment and a better income than either enterprise alone. Such a combination however requires greater care in sanita- tion, and disease prevention, and suf- ficient space to avoid contact between poults and hens. It should only be under- taken in a suitable location and after successful experience in raising meat turkeys. Some turkey raisers not in a hatching- egg district may wish to produce hatch- ing-eggs to furnish their own poults. They will be handicapped by either a long hatching period with several overlapping broods or a short, uneconomical breeding season. It might be feasible to com- promise on about a three-month breed- ing period with 40 hatching-eggs pro- 8 duced per hen, from which about 25 poults should be obtainable. Hence, the raising of 3,600 poults would involve keeping 150 breeding hens and 21 toms, assuming that the operator keeps one torn per 7 hens. It is helpful to provide green feed supplies Turkeys benefit from green feed. Cut- green feed up to 20 per cent of the weight of grain and mash used is desirable and will reduce the quantity of grain and mash required. This green feed may be obtained by pasturing the birds, but the raising and cutting of green feed are to be preferred. About 20 pounds of cut greens per bird raised for the entire period of eight months would mean about 28 tons for 2,880 birds raised. This would require around 2 to 3 acres of irrigated alfalfa or Ladino clover. Where the birds are run on irrigated pasture, an acre to each 500 birds raised has been sug- gested by some successful growers. Where natural spring range is available, from 1 to 3 acres will provide natural green feed for 1,000 young turkeys until the grass dries up. After this, greens must be pro- vided from some other source, or substi- tutes provided in the mash. A breeding flock in the winter and spring months can well use up to 27 pounds of green feed per breeding hen. Some of this can come from a clover field or pasture, but in the winter special green feed crops or alfalfa hay or meal will be used. A turkey farm with 2,800 turkeys or 1,500 turkeys and 500 breeding hens could well use 2 to 3 acres of green-feed land, systematically watered and cut, or around 5 to 6 acres of irrigated pasture or range. One year should elapse before a permanent, irrigated pasture used by hens is used by young turkeys. Turkeys are, however, successfully grown without green feed by having a suitable percent- age of good quality alfalfa meal in the mash. Growing turkeys need plenty of elbow room Where turkeys are raised in confine- ment in dry yards, they should have at least 50 square feet per bird or about an acre for each 800 birds raised, or better yet 2 acres, so land use may be alter- nated. Hence, a flock of 2,800 would call for a minimum of about 3.5 acres for rearing space, to which would be added a half acre for brooder house, feed houses, driveways, etc., and perhaps 2 to 3 acres for green-feed land, and a half acre for the operator's dwelling and gar- den—a total of about 7 acres. If irrigated pasture is used, the rearing space of 6 acres would include green feed produc- tion. If hatching-eggs are also produced, additional space for isolation and rota- tion of land use and growth in size of business should be provided. Ten acres of land is probably a minimum for a com- mercial turkey farm. This does not need to be of high quality but should always be well drained and never subject to floods. It would need to be of suitable quality for green feed production or irri- gated pasture if these are grown. Buildings. Turkeys are started in brooder houses, and poults require about twice the space per bird that baby chicks need. The University type brooder house with a pen 14' x 20' and a 1,000-chick hover has room for 300 poults per pen. (California Agricultural Experiment Sta- tion Bulletin 476, "Poultry Houses and Equipment.") Two broods can use the same facilities, one in March and one in May. Hence, starting 3,600 poults would require about six brooder pens and hovers. After the first eight weeks birds are out in the open and need only port- able feeders, water troughs, shade, and roosts in the yards or pasture where they are confined. Shade, either natural or artificial is necessary during hot weather. This is par- ticularly true in the central valley coun- ties where high temperatures prevail. [9] •a a o i « C3 ■»» s cm to to to i t~ ^ co w oo tji in 1 CO w a O P. 1-1 t- 1 °> -^ tM 1 °o «n tH «H CM a) Pi •o ^ © © © "tf 00 to to IO CO o to +» *■* CM to i-H iH © 00 ^» O tH O T- CO §3 | c4 iH CO ...... to U l-i «*• €0- &h (A +» w ■o w "C3 O O 00 00 co OCO^NOCO CO c O .£j 00 (N 00 00 ^ CO N N t- p D _£ £ •^ eo c4 Is €©■ 1 -o >» o 3 W lO CO H 0) a. CM CM * iH -* M k. u e D J> 04 >-$ S c u» IS ss^s to CN tO IA © -H o - £ eu U V) *• 1 03 c s a §8§S o © ■<# CO a w a £ G e 3 g g g 1 c5 n G G 1 * o a o o o o G o Pi P. A P * G js o «" -J .5 CO w) < a . H- »- s 1 C •u si ■o V to *g V (A 8 1 1 a a ■♦- T c c u a e i c I a ! £ I c D ) ■*■= I C •c 4 a «•- c Ed cr C 1 cc ►J 1 & G* § 8 9 *i O G -3 £ to bo h tf CJO co •" > n 5 g" e ° S o '" 111! e co a) a O co Pi a w ^ P £ 3 • • cd' : a Pi CD » +» ) o 1 Here are some sample inputs and costs It is well to plan turkey operations in advance each year. This enables a pro- ducer to foresee and provide for his feed and operating capital requirements. In raising turkeys there is practically no in- come until the birds are marketed at ma- turity. Table 4 presents a sample calcu- lation in which quantities required are figured at assumed prices. This is not a forecast of production costs for any fu- ture time but may be used as a guide in figuring probable costs for the season ahead at estimated prices for feed and other items. The figures are based on raising 80 per cent of 3,600 poults to an average weight of 20 pounds for the hens and toms. The efficiency of production and feed requirement assumed in this calculation are those shown by recent turkey records summarized by the Agri- cultural Extension Service and shown in table 2, on page 5. It takes capital to get started in business The fixed investment required in turkey production is relatively low as compared to other types of farming, but the operating capital required to buy poults and raise them to market age is high. It is possible to operate with low cost, portable colony brooder houses and with movable equipment on rented land. For saving of labor and connection to utilities, however, permanent brooder houses are desirable. Adequate con- venient labor-saving facilities not only enable the raising of more birds with the same amount of labor but also pay in better results with a higher percentage of birds raised. Recent records show an in- vestment of about 60 cents per bird raised for buildings and 35 cents for equipment, but this was largely for old equipment obtained years ago at lower prices. In- vestment in good permanent facilities now (1950) would probably run from 5 to 50 cents per bird for land, from $1.50 to $2.50 for buildings, and around 50 cents for brooders, roosts, hoppers, and other equipment— probably a total of $3.00 per bird raised. For the 2,800-bird enterprise this would mean about $9,000 for land and turkey facilities aside from the operator's dwelling. The operating capital required to bring the birds through to maturity will vary with poult prices and feed costs. Table 4 shows a total cost of $5.65 per bird. This would mean an additional capital outlay of $16,000 for the raising of 2,800 turkeys, or about $25,000 in all. Credit. Despite the risky nature of turkey growing, credit is usually avail- able to finance partially the growing of turkeys. The experienced grower of good reputation who has the facilities, either owned or rented, and enough operating capital to buy his poults and raise them to a certain stage can usually borrow from banks or production credit associa- tions to complete the job— perhaps up to 60 per cent of the expected final value of the birds. Such credit on a commercial basis and at a nominal cost is advan- tageous in that it enables the grower to have a large business on limited capital and still leaves him free to buy his feed and market his birds to his best ad- vantage. If a greater degree of financing is sought, the grower must expect it to be high in cost and to result in loss of choice in feed purchases and marketing of the birds. He may find himself working for his creditor with no guarantee of wages and only a share of the profits, if any, after the advances and charges of the creditor are met. And here is a summary of the success factors The small margin of profit in meat- turkey production requires correct de- cisions at every step in the process. Finances must be adequate. The poults must be good and from pullorum-free [in flocks. Heavy disease and other losses must be prevented in order to raise a sufficiently high percentage of the poults. Feed must be of the right kind and pur- chased wisely in the most economical forms and from the lowest-priced source. The turkeys must be brought to the right degree of finish at the right time and marketed advantageously. Experience and technical training on the part of the operator would be advantageous but are not indispensable. A willingness to learn and to seek correct technical information is important. The Agricultural Extension Service of the University of California College of Agriculture and the United States De- partment of Agriculture maintains local offices in the agricultural counties of California. Here may be obtained free technical information and advice, and free publications on turkey production. Anyone interested in such service may consult his local Farm Advisor. 15m-4,'51(3807)WP