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Financial Feasibility Study for Chicken Broiler Production in Qena

Governorate

Conference Paper · November 2022

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Mikhail Bahig
South Valley University
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 7th International Conference of Youth Researchers of
Agriculture Sciences (10th October 2022).

(ICYRAS 2022)
South Valley University, 83523 Qena, Egypt | October. 10-11

Financial Feasibility Study for Chicken Broiler Production in Qena

Governorate
Mohammed A. M. Elsaman1, Montaser M. M. Hamdoon2, and Mikhail B. H. Melad3*
1 Professor of Agricultural Economics, Faculty of Agriculture, Sohag University, elsman1962@yahoo.com.
2 Professor of Agricultural Economics, Faculty of Agriculture, South Valley University, dhamdoon@yahoo.com.
3 Teaching Assistant of Agricultural Economics, Faculty of Agriculture, South Valley University, mikhail.bahig@agr.svu.edu.eg.
*Corresponding Author: Tel: +20 111 806 3323

Abstract:
Egypt produces annually more than 1.4 billion birds of broiler poultry. Broiler chicken farms share 89.5%
of total poultry farms. Broilers contribute 5 million pounds in Egypt national income. The Egyptian economy
was subjected to shocks, such as the liberalization of the exchange rate in many stages, the bird flu and world
Economic crisis in 2008; This caused rising prices of production inputs; therefore, the white meat price
increased. The production of chicken broilers in Qena governorate fluctuated frequently, and the disruption,
as the average of the previous twenty years, reached 52% of total production capicity. Recently, production
decreased from 3,366 thousand chickens in 2018 to 2,808 thousand chickens in 2019.
The study targeted discovering the current situation of the broiler chickens in Qena governorate, the
financial feasibility of the broiler farms in Qena. The study used The Simple Linear Regression Model, some
discounted and non-discounted criteria, spicially Free Cash Flows, and Modified Internal Rate of Return
were used, Sensitivity Analysis and Break-Even analysis were used. Data were collected by prepared
questionnaire and interview with producers .The sample was stratified Random Sample by initially method.
The most important results showed that the number of farms in Qena Governorate was 88 farms as an
average period (2000-2019), with an actual production capacity of 618 thousand chickens annually. The
Linear Model was significant to increase the number of farms in Qena Governorate, working dormitory
numbers and the actual capacity for them. Weighted Average Cost of Capital for three cases about 14.17%,
14.17% and 14.53%.The Modified Internal Rate of Return is 18.59%, 23.44%, 25.73%. The Sensitivity
Analysis was tested in three assumptions, first, when operating costs increased by 10%, second, revenues
decreased by 10%, and third, increasing and decreasing by 10% together in the same moment. The feasibility
of Sensitivity Analysis differed according to each case. The Break-Even point for the three cases about 30%,
23%, and 15%, respectively. The study contains quantity and value of Break-Even Point and Safe Margin.
The study recommended increasing the third case farms numbers in Qena, and establishing a poultry stock
exchange in Qena Governorate.
Keywords; Financial Study, Economic Feasibility, Enterprise Evaluation, Chicken Broiler Production, Qena
Governorate.

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