Can You Actually
Re-coop the Costs?
BY JOSHUA LEVIN

If you haven’t noticed, there’s a nationwide underground craze for backyard and urban chickens, to which I have fallen prey. Yet the farmer in me has not yet smothered the MBA.  The following is an objective analysis of whether or not the output of backyard chickens can ultimately “re-coop” the costs. I found the answer surprising, and I have produced five key recommendations for raising backyard chickens economically.

Friends frequently ask me whether raising my hens is “cost-effective.” Everything I’ve read on the subject in blogs and books says NO. Instead, enthusiasts emphasize personal satisfaction and pet potential—no doubt among the true goals of backyard chicken raising.  Yet I would like to be able to provide a more technical answer to this question, and I am happy to further study my birds. Not to mention that my personal flock makes a wonderful test case: I raise two hens (the minimum flock size) in New York City (the most costly and crowded environment). If I can do this cost-effectively, anyone can!

I’ll address assumptions as we go, but it is important to note that I have sought to save money whenever possible by using found objects and substituting fancy equipment with my own labor. The most significant example is my chicken coop: Good wooden coops for small flocks sell for $300–$450. Yet it would take me a long time to recoup that money. I was about to join those ranks, until I found the dresser. . .

Returning to my Brooklyn rowhouse from a night on the town, I came across a solid wooden dresser down the block. With a weekend of work, I turned it into a chicken mansion—NYC size. The bottom drawer is filled with bedding material. The second drawer is a perch.  The third drawer holds a nesting box. Everything else is hollowed out.  And after several iterations, I put the whole thing on stilts, which provides them shade and the comfort of being off the ground.

Let’s go ahead and populate the model:

Up-Front Costs

3 rolls of chicken wire ($17 each): $51

2 chickens ($15 ea + $20 gas): $50

Feeder: $4.50

Water bottle: $4

Poultry grit (5 pounds, will probably last me forever): $8

Shipping for above items: $3

Total: $120.50

Freebies

Coop: Built from curbside dresser Twist-ties: Stolen from supermarket 2 more rolls chicken wire: Neighbor found in trash Bedding material: Pine shavings are often recommended for their bedding and nesting box. This can run up to $7 per week for two hens. I discovered that one can use shredded paper! All my office paper now spends its purgatory on the floor of my chicken coop before its final resting place as the main carbon source in my compost bin.

Note: It may seem unfair that I acquired two rolls of chicken wire for free. However, I used a lot more wire than most urban chicken wranglers, as I built a U-shaped run all the way around my garden.

Variable Costs per Month

Organic feed in 25-pound bag ($46; used ¾ of it) + shipping: $42

Future Variable Cost Options per Month

Organic feed in 50-pound bag + shipping (3/8 of $83): $31.50

Non-organic feed in 50-pound bag + shipping (3/8 of $36): $13.50

Note: I bought my first bag of organic feed in a 25-pound size, as I had no idea how much these ladies eat. In the future, you need not repeat my mistake. Based on the lowest price-points I could find online for home customers, and including shipping, I consider the two “future variable cost options” to be the two selections above.

Value Produced per Month

40 eggs: $20

Fertilizer: $7.66

Total: $27.66

Note on eggs: I calculated the egg value based on the fact that the best eggs I can buy at the market are about $5.50 per dozen. As mine are slightly better, I’m assigning them a value of $6 per dozen.  Seems reasonable, as I would probably pay my neighbor that much for super-fresh backyard eggs. Each of my hens is producing five to six eggs a week. It’s summer and egg laying is seasonal, so we’ll assume five eggs per week. Furthermore, this all assumes a steady rate of laying across the chicken’s lifespan, which is not accurate. But let’s see if we can recoup the costs in the first two years anyway, during which time laying is at its peak.

Note on fertilizer: One hen produces about 45 pounds of manure per year. I assume 5 pounds are lost in the dirt, so we get 40 pounds per annum, or 3.33 pounds per month. This volume is then reduced by approximately 50% during composting. At the best price-point for home consumers, you can buy chicken manure fertilizer online for $3.67 per pound equivalent. I then assumed that homemade is 25% better quality, because it’s all-natural and has more diverse ingredients, as opposed to manure from factory chickens. I therefore value my composted chicken manure at $4.58 per pound, which, at 1.67 pounds of composted manure per month, comes to $7.66.

The geekier ones among you may have already noticed that we face a serious problem: The value produced by two hens comes to $27.66 per month, while the cost of organic feed alone is $31.50!  We’re losing $4 each month, and will certainly never recover the up-front costs.

Chicken feed turns out to be the real cost driver. Unless you are willing to use non-organic feed, the key to solving this dilemma turns out to be substituting some percentage of chicken feed with local organic matter. I am referring to a combination of free-ranged food (insects, seeds and plant sprouts) and kitchen scraps. If you have a nice backyard, the former is a great option. With careful management and a lot of space, chickens can in fact be almost entirely grassfed. Check out the post on backyardchickens.com discussing what kitchen scraps chickens will eat.

If you can manage to achieve an ambitious 40% feed replacement with local organic matter, the following is the result of my breakeven analysis (how long it will take to recover all your costs, including up-front costs) using the input data I described above:

As you can see, using non-organic feed, the break-even point is six months. Using organic feed, you could actually break even with your two backyard hens in 14 months. This is great news for urban chicken lovers.

However, 40% use of local feed material is pushing it for most busy urbanites in small spaces. I therefore performed a sensitivity analysis to determine how much the break-even point changes depending on the percentage of feed you replace with locally available materials:

What we learn from this sensitivity analysis is that the percentage of feed replacement doesn’t matter as much for non-organic feed. But for organic feed, it makes all the difference. At 50% feed replacement, you recover all of your costs within a year and you will almost be on par with using non-organic chicken feed—not to mention you will have better eggs. Around 18%–19% feed replacement is the tipping point, at which time it will take you over five years to recover your costs, yet your hens will have stopped laying eggs. That’s when you know you should have bought Apple stock instead.  In conclusion, I find that it is indeed possible to raise only two chickens in urban environs and recover your costs within one to two years. Furthermore, based on these analyses, I offer the following six recommendations for economical backyard chicken-raising:

1.   Reduce up-front costs. Whether you build or buy your coop may determine if you ever recoup your investment.

2.   Organic chicken feed is the primary cost-driver. Arrange for free-range access and kitchen scraps to replace at least 20% of your chickens’ food intake; 50% replacement is ideal, after which cost savings become more marginal. Furthermore, chicken wire is expensive. If you completely free-range, you save both this fixed cost and feed costs.

3.   Using non-organic feed—while this may be completely contrary to your mission—changes the numbers significantly and ensures cost recovery within a year.

4.   Adding another chicken doesn’t really matter. Because your gross margin remains about the same (both the number of eggs produced and the cost of feed increase at the same rates), it will still take roughly the same amount of time to recover your costs.

5.   Collecting and composting your chicken manure is a game changer. For example, at 50% feed replacement, harvesting your manure reduces your break-even point with non-organic feed from 10 months to six months, and with organic feed from 28 months to 10 months!

At the end of the day, it would be completely irrational to decide whether or not to acquire backyard or urban chickens based on this financial analysis. For example, in the first month alone I spent something approaching 70–80 hours setting up their coop and run, chasing them through neighbors’ yards and just watching them, none of which I included in this calculation. Obviously, no one would perform such an analysis in order to determine whether to get a dog—and dogs don’t even lay eggs! But just in case you too find yourself coming down with a case of chicken fever, this analysis can help to better understand what’s involved and where your energies would be best spent when trying to contain costs.

Joshua Levin is a Senior Program Officer at the World Wildlife Fund, specializing in agricultural commodities, where he works with corporate banks to help them better understand environmental risk and opportunities in global food & agriculture investing.  He is also producing the documentary film Hands That Feed (handsthatfeed.com), which explores the quest for sustainable food security in Haiti and around the world. He holds an MBA from NYU and a BA from Harvard University. He lives with his wife and two chickens in Brooklyn, New York.