Analysis: Profitability of poultry feed market in Nigeria

ABSTRACT: This study analysed the profitability of poultry feed marketing in Imo State, Nigeria, with a view that potential investors would be more likely to invest in the business if they are convinced that the enterprise is viable economically. Imo State was selected for the study because of its high concentration of poultry feed marketers.

By: CA Emenyonu and CC Nkemka

A sample of 59 poultry feed marketers, spread across the state, were randomly selected from a sampling frame of 99 marketers. Data were collected with the use of a well-structured and validated questionnaire and analysed using descriptive statistics, multiple regression techniques and profitability indices.

The results indicated that the cost of initial purchase of the feeds constituted the greatest share of the total cost, at 95.18%. The rate of return to investment gave an index of 6%, implying that for every Naira (N) currency unit (0.0046 euro) invested the return to investment is N6.13K (0.03 euro). Regression results showed that the cost of labour, storage and selling price was negatively and significantly associated with net income, while cost of initial purchase and wages showed a positive relationship with net income. No significant relationship was found to exist between net income, cost of transportation and rental.

The major constraints to poultry feed marketing were found to be high cost of transportation, shortage of trading capital, and price fluctuations. It was therefore recommended that the government should provide good road networks to reduce transportation cost. The marketers should form cooperative associations (where they do not currently exist) for their common benefit, and as a source of facilities from the banks to solve the problem of capital shortage. To further reduce the cost of initial purchase, the government and other agencies should consider subsidising poultry feed.