Norwegian broiler production can be quite profitable

27-01 | |
Norwegian broiler production can be quite profitable
Rune watches his chicks from a quiet position for half an hour every day. "An almost meditative moment that yields a lot; you see any problems that occur just a little bit earlier." Photo: Mark Pasveer

Rune and Olaug Vang grow 37,000 broilers for the Norsk Kylling integrator in Norway. With their above-average scale and results, they achieve an almost guaranteed income of around €180,000 per year.

 

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What are yeasts?

A sea of ​​daylight and very calm broilers. That is what you see when you enter the newest poultry house of Rune and Olaug Vang. The shed is built of sandwich panels. In both side walls there are 16 windows measuring 100×160 cm with blackout shades, but most of the time, daylight enters unhindered.

“Our buyer, Norsk Kylling, requires this for newly-constructed houses. We had our reservations about this when building this last house and were on edge during the time we had our first flock,” said Rune Vang. “We didn’t know whether it would cause extra pecking, which would lead to extra losses. But from the start, 3 years ago now, we have not experienced that. We were also worried about direct sunlight on the chicks, but they seek sunlight rather than avoid it. And doing your daily routine in the house works very well in a brightly lit shed.”

Peat and pecking stones

In addition to daylight, there are also quite a few LED lights. These are automatically turned on on less sunny days, despite the fact that the amount of daylight is still greater than the amount of artificial light in many houses outside Norway. The LED lights give the daylight colour. They were developed at the request of a Norwegian animal protection organisation, and, according to Rune, the costs of replacing the standard LEDs were fully reimbursed by the integration.”

What is also noticeable are containers with peat in which the chicks can peck and roll, as well as a great number of pecking stones – 1 per 500 chicks. These are supplied by the integration, without any charge. “The birds are very fond of them and at the end of the flock cycle they have almost disappeared,” said Rune.

The integration Norsk Kylling requires large windows in the side wall of newly constructed houses. This leads to a sea of daylight in the barn. Photo: Jacqueline Hermsen
The integration Norsk Kylling requires large windows in the side wall of newly constructed houses. This leads to a sea of daylight in the barn. Photo: Jacqueline Hermsen

A lucerne bale per 2,000 chicks completes the welfare-friendly measures taken in the barn, which also has a standard layout with feeding lines, drinking nipples, 60% recirculation and heat recovery, 8 fans in the end wall and valves in the side walls that direct the incoming air.

Ventilation is regulated based on temperature and CO2 and NH3 content. Heating is done with a wood pellet stove. “In 2023, with a very cold winter, it used around 60 tonnes of wood pellets at a cost of around €12,000,” said Olaug. Automatic weighing platforms have been installed and register around 3,000 weighings per day, which Rune said offers good control of the growth process and the distribution among the chicks.

In doubt about the outer walls

The Norwegian farmers now grow 37,000 broilers in 2 barns. They started this branch in 2005. Just 2 years earlier, their pig shed had burned down. “We kept almost 30 sows,” said Rune. “Too little to earn a living, so I had to have a second job in a slaughterhouse and as a driver on the school bus.” Olaug worked as a teacher. Together they oriented themselves towards the future.

In 2022, the integration Norsk Kylling switched to the maximum stocking density as prescribed in the ECC standard: 30 kilos per square metre. Photo: Jacqueline Hermsen
In 2022, the integration Norsk Kylling switched to the maximum stocking density as prescribed in the ECC standard: 30 kilos per square metre. Photo: Jacqueline Hermsen

There are many layer farmers in the region and they pointed out the great demand for broilers. The decision was made at Easter, and the first chicks were placed in October. “At the time, the biggest question was whether we would build the barn from prefabricated concrete panels or sandwich panels. There was a lot of doubt about the lifespan of the plastic. That is why we opted for concrete, despite the slightly higher costs,” said Rune. “In retrospect, not the best choice, because practice now shows that sandwich panels last at least 20 years. That is why we opted for that for the second barn.”

First house costs €580,000

The oldest shed has 1,024 sqm of floor space, which is enough for a production of around 150,000 broilers per year. “In 2005, there was a production limit in place of 90,000 broilers per year,” said Rune. “We could exceed that by 20% in one year, but then you have to compensate for the excess delivered the following year. We anticipated that the limit would be increased, which is why we built overcapacity.” It is typical of his entrepreneurship, because in 2007 the maximum was already increased to 120,000.

The first shed cost around €580,000 at the time, half of which was paid from the damage payment from the fire insurance. The other half was financed, plus the animals and the feed. A 2-year sales contract was required for this. “No bank wanted to finance the construction without long-term security when starting a new branch,” said Rune. “Even though there are periods when there is a high demand for chicks, the risk is too great for them.”

They signed a contract with Trønder Kylling for 90,000 broilers per year. “When that contract expired, this integration seemed to be experiencing bad weather and the payments were very difficult. That is why we switched to Norsk Kylling, with whom we still do business. The contract went to 150,000 chicks per year in a few years: 7.5 flocks per year and 20,000 chicks per cycle.”

The chicks prefer a spot in the sun, the poultry farmer notices. Photo: Jacqueline Hermsen
The chicks prefer a spot in the sun, the poultry farmer notices. Photo: Jacqueline Hermsen

Switching to slow growth

In 2018, the Norsk Kylling integration switched to slow-growing broilers and in 2022 to the maximum stocking density prescribed in the ECC standard: 30 kg/sqm. As a result, the farm reduced the number of cycles and stocking density. The number of chicks to be delivered annually was halved: 6.5 flocks of 12,500 chicks. “The increase in the price per kg in the payment system that was started at the time (see box below) more than made up for that, because we are performing above average,” said Rune.

Technically, the switch did not cause any problems. “On the contrary, the mortality rate was halved,” said Rune. “In Norway, the standard use of coccidiostats has been phased out since 2016. We only use them if there are acute problems. On our farm, the use of Narasin has decreased by 80% after switching to the ECC standard. And the switch also saved a lot of labour. You do one and a half cycles less per year, so you have to deliver, clean and disinfect less often and you have less of a hectic start-up of the flock.”

Near the Arctic Circle

Rune continues: ‘’The good return left us wanting more, also because the government continuously increased the maximum farm scale. This is now at 280,000 broilers delivered per year. That is why our second house was built in 2021, with 2,000 sqm of floor surface, at a cost of €1.3 million, but this time with sandwich panels, which saved almost €180,000 in construction costs.”

Rune and Olaug built just before ‘Ukraine’ and the huge price increases. “A year later, construction would have been €400,000 more expensive,” Rune noted.

For the expansion of the sales contract with Norsk Kylling, the integration imposed strict requirements on the new construction. For example, daylight must enter the barn over at least 3% of the floor surface for 18 hours a day. The many windows provide for this. Electrically-controlled blinds are mounted on these windows on the outside of the barn. The farm is located about 300 km from the Arctic Circle. This means that there is almost 24/7 daylight between May and September. Rune: “The chicks do need to have a day-night rhythm, from midnight to 06h00 the roller blinds are closed in the summer period.”

Good returns

Under the Norks Kylling system, farmers should generate an income of well over €100,000 per year, given the average farm size. In 2023, Rune and Olaug had a turnover in broilers of just under €1.15 million, of which €5,500 was government subsidy for hired help during holidays. The bottom line was just under €180,000.

“We are performing above average on almost all points,” the poultry farmer said proudly after some insistence. “Improvement is always desirable; we are not the best on all fronts. The delivery weight could be a bit higher; we are working on that.”

Until 2022, the slaughterhouse paid in proportion to uniformity upon delivery. Now only the kgs count. The average slaughtered delivery weight is now 1,624 g in 46 days. The entrepreneurs want to exceed 1,650 g. “We have already experimented with the feed and the lighting schedule, but have not yet seen much effect on profitability.”

About 1,000 people visit the visitors lounge every year. "The large windows in the side wall attract more curious people," said Olaug. Photo: Mark Pasveer
About 1,000 people visit the visitors lounge every year. “The large windows in the side wall attract more curious people,” said Olaug. Photo: Mark Pasveer

Joining the Golden Route

The company could expand even further, because it now has a size below the legal limit with around 240,000 chicks delivered per year. “Expansion or development of a second location is something for the next generation. Our son wants to take over everything yesterday,” said Olaug with a smile. “We want to continue farming for another 5 years – the profession is too much fun and we now have a company that we always dreamed of from which we can make a good living without jobs on the side.”

That does not mean that they are not open to some extra activities. “The work is now 3 hours per day per house, so we have time to spare. Our visitors lobby in one of the houses attracts people; we notice that,” said Olaug. “That is why we are considering investing in home sales of chicken meat together with Norsk Kylling and joining The Golden Route, a route through our region with award-winning home sales that attracts a lot of Norwegians. It provides some extra income, but is mainly good for the image of our integration, and we would like to contribute to that.” 

Bodde
Robert Bodde Senior editor at Boerderij