Republic of the Philippines

UNIVERSITY OF RIZAL SYSTEM

Province of Rizal
Tanay Main Campus

College of Agriculture
Chapter 3

PROJECT PROPOSAL

Introduction

Eggs are one of the most consumed food items worldwide, making egg

farming a profitable business with high demand. Chicken egg production in the

country can be the most progressive animal enterprise in the country today

because of its numerous economic benefits.

Egg farming business is an important sector of the agriculture industry,

providing a significant source of food and income to farmers worldwide. Eggs are

a nutritious and versatile food that is consumed by people of all ages, making egg

production an essential part of the food industry.

It is an agricultural enterprise with very low barrier to entry because it

doesn’t need a lot of capital to venture, there are good breeds that you can choose

in order for you to succeed in your poultry egg farming ventures and there is also

a largely, a ready market for your poultry produce be they in a form of meat or

eggs.

According to Poultryreporter.com (2019), the interest in layer poultry

farming has grown not just in the country but in the different parts of the world.

Layer poultry farming refers to raising egg-laying poultry birds for commercial egg

production. These layer chickens are special species of hens that start laying eggs

commercially from eighteen to nineteen weeks of age. They remain to lay eggs

continuously until they are seventy-two up to seventy-eight weeks of age. They

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UNIVERSITY OF RIZAL SYSTEM
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Tanay Main Campus

College of Agriculture
can produce about one kg of eggs by consuming about 2.25 kg of food during their

egg laying period.

The layer industry in the Philippines refers to the commercial production of

eggs, specifically from hens raised for that purpose. The industry is an important

part of the country's agricultural sector and provides a significant source of income

for many farmers. For many years, the chicken egg production in the country has

been a common livelihood for many farmers. It provides them additional income

as well as source of protein. It serves as a form of savings or insurance for the

farmers against periodic shortages as well as for resource diversification.

According to the Philippine Statistics Authority, as of 2021, the country's

layer inventory stood at around 56 million birds. The majority of these birds are

raised in backyard or small-scale farms, while a smaller proportion are raised in

commercial poultry farms. The layer industry in the Philippines is highly

competitive, with several large companies dominating the market. These

companies typically use advanced technology and management practices to

maximize egg production and maintain the quality of their products.

This project proposal aims to identify the profitability of Dekalb as breed in

starting up a layer farm business. This paper includes the projected cost, cost of

supplies and materials, cost of utilities and transportation, cost of labor expense,

cost and return analysis and product efficiency indicators.

 Republic of the Philippines 54
UNIVERSITY OF RIZAL SYSTEM
Province of Rizal
Tanay Main Campus

College of Agriculture
Proposed Program of Activities

Table 3

Projected Duration and Program of Activities

Activities Date of Start Date of End

Canvassing and April 30, 2023
Purchasing of Materials
Construction of Layer May 2, 2023 August 2, 2023
House
Sanitation and Disinfection Twice a Week
Canvassing and August 4, 2023 August 4,2023
Purchasing of Stocks
Light Management August 4,2026
Feeds and Feeding August 4,2023 August 4,2026
Management
Water Management August 4,2023 August 4,2026
Vitamins and Medication Twice a Week
Waste Management and August 4,2023 August 4,2026
Disposal
Health Sanitation and August 4,2023 August 4,2026
Disease Prevention
Egg Collection and August 4,2023 August 4,2026
Grading
Marketing of Eggs August 4,2023 August 4,2026
Inventory, Record Keeping August 4,2023 August 4,2026
and Evaluation
Economic Analysis August 4,2026

The table above shows the flow of the activities which will start on April 30,

2023 that includes canvassing and purchasing of materials, construction of layer

house, sanitation and disinfection, canvassing and purchasing of stocks, light

management, feeds and feeding management, water management, waste

management and disposal, health sanitation and disease prevention, egg

 Republic of the Philippines 55
UNIVERSITY OF RIZAL SYSTEM
Province of Rizal
Tanay Main Campus

College of Agriculture
collection and grading, marketing of eggs, inventory and recordkeeping and

economic analysis. The project is expected to gain income after two years.

Technical Discussions

This part of the proposal discusses about the processes and activities

conducted in egg production. It states also the materials, equipment and used in

production and other aspects regarding the purchase of stocks and feeds needed

into collecting the eggs ready for trade. Layer house layout, size and production

schedule are all presented for the purpose of identifying the business operation.

Also, product specifications, the product processes using flowchart, the list

of expenses, tools and materials, and feed supply are enumerated with their

corresponding costs, the raw materials and fund sources are also cited.

Canvassing and Purchasing of Materials

Selecting the right materials is important for the longevity and durability of

the layer house. The proponent will consider materials that are weather-resistant,

easy to clean, and offer good ventilation. Some of the commonly used materials

include metal sheeting, concrete, and wooden frames.

The proponent will also look for equipment which is an essential component

of a layer house such as feeders, waterers, lighting, and ventilation systems. It's

important to purchase equipment that is easy to clean and maintain.

Construction of Layer House

Constructing a layer house requires careful planning and execution. The

proponent will choose a site that is well-drained and away from any potential
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UNIVERSITY OF RIZAL SYSTEM
Province of Rizal
Tanay Main Campus

College of Agriculture
sources of pollution or contaminants. The site will also be easily accessible for

delivery of materials and access to utilities.

The design of the layer house should meet the requirements of the birds

and the farm's management practices. It should include features such as sufficient

ventilation, lighting, insulation, and proper temperature control. Consult with a

professional engineer or a reputable contractor to design a suitable layout that

meets the needs of the birds and the farm.

Sanitation and Disinfection

Sanitation and disinfection are critical components of maintaining a healthy

and productive egg farm. Proper sanitation and disinfection practices help to

prevent the spread of disease, reduce the risk of contamination of eggs and other

products, and maintain a safe and healthy environment for both the birds and farm

workers. The coop, nesting boxes, and surrounding areas should be regularly

cleaned of manure, feathers, and other debris. This helps to reduce the risk of

disease transmission and pest infestations.

Canvassing and Purchasing of Stocks

The breed of the stock to be used in the project is Dekalb white which are

ready-to-lay chickens purchased from a farm in Bulacan. The ready-to-lay chicken

is of 18 weeks of age and is expected to produce eggs after 1-2 weeks. The

proponent will make sure that the breed of chicken performs excellently. The

proponent will consider looking for a reputable seller who can provide healthy and

vaccinated birds.
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UNIVERSITY OF RIZAL SYSTEM
Province of Rizal
Tanay Main Campus

College of Agriculture
Light Management

Light management is a crucial aspect of egg production as it can influence

the reproductive behavior of hens and the quality and quantity of eggs produced.

It is important that lighting management should be observed. The lighting schedule

should be carefully managed to ensure that hens receive a sufficient amount of

light each day to stimulate egg production. Generally, a lighting schedule of 14-16

hours of light and 8-10 hours of darkness is recommended.

Feeds and Feeding Management

The proponent plans to use a controlled trolley feeders that has 3 pipes on

each sides to distribute the feeds equally to the chickens. In this type of feeding

system, the feeds are first placed in two (2) square trolley tank that has the capacity

of 100 kilograms each. The hole of the tank is connected to the chain wheels in

which the feeds will directly goes to each pipe connected in the tank with locks and

distribute feeds as the trolley was being pushed along the way.

Water Management

Proper water management is crucial for maintaining the health and

productivity of layer farms. The proponent will ensure that the birds have access

to clean, fresh water at all times by checking the waterers regularly to ensure that

they are working properly and not clogged with debris. The project proponent will

also Monitor the quality of the water source and will test it regularly for

contaminants, such as bacteria and minerals. Water that is high in minerals, such
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UNIVERSITY OF RIZAL SYSTEM
Province of Rizal
Tanay Main Campus

College of Agriculture
as iron and manganese, that can affect the taste of the water and reduce its

palatability.

Vitamins and Medication

Layer birds require a balanced diet that includes adequate vitamins and

minerals. Vitamins A, D, E, and K are particularly important for egg production and

shell quality. Commercial layer feed is formulated to meet the nutrient

requirements of layer birds. However, the proponent will ensure that the birds are

receiving a balanced diet, and supplementation may be necessary in some cases.

Medication however may be necessary to prevent or treat diseases and

infections. It is important to consult with a veterinarian to determine the appropriate

medication and dosage. Antibiotics should be used judiciously and only under the

guidance of a veterinarian to prevent the development of antibiotic-resistant

bacteria.

Waste Management

Waste management is an important aspect of egg production, as it helps to

prevent environmental pollution, maintain hygiene, and reduce the risk of disease

transmission and disposal. The proponent will incorporate what he have learned

in the farm which is using bamboo as dryer under the layer buildings. This will be

done to avoid excessive foul odors of chicken manure.

However, in terms of production, any eggs that are cracked, dirty, or

otherwise unsuitable for sale should be disposed of properly. Do not sell or

consume eggs that are dirty, cracked, or contaminated with feces or other
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UNIVERSITY OF RIZAL SYSTEM
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Tanay Main Campus

College of Agriculture
materials. Eggs can be broken and composted or disposed of according to local

regulations.

Health, Sanitation and Disease Prevention

Maintaining the health and sanitation of layer farms is crucial for the health

and productivity of the birds, as well as for food safety and environmental

protection. Biosecurity will also be implemented to make sure that the introduction

and spread of diseases are prevented. This may include measures such as limiting

visitors, disinfecting equipment and vehicles, and providing separate clothing and

footwear for farm workers.

Egg Collection and Grading

Egg collection and grading are important processes in egg production that

help to ensure the quality and safety of eggs for consumption. During egg

collection, the proponent will make sure to handle the eggs gently to prevent

cracking or breaking. Eggs will be placed in clean, dry egg trays or flats, with the

large end up. Eggs will be kept in a cool, dry place to maintain their quality and

freshness.

Marketing of Eggs

Marketing of eggs involves the strategies and activities used to sell eggs to

consumers. It is an important part of egg production, as it helps farmers to sell their

products and generate revenue. It is important for farmers to understand the needs

and preferences of their target market. This can help to determine the type and

quantity of eggs to produce, as well as the price points and packaging options.
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UNIVERSITY OF RIZAL SYSTEM
Province of Rizal
Tanay Main Campus

College of Agriculture
The proponent will developing a brand identity for eggs can help to

differentiate them from competitors and create customer loyalty. This can include

using logos, packaging, and marketing messages that convey the quality and

benefits of the eggs.

Eggs will be sold through various distribution channels, including grocery

stores, farmers' markets, and online platforms. The proponent will consider the

costs and benefits of each channel and select the ones that are most effective for

reaching their target market.

Inventory, Record Keeping and Evaluation

Inventory management is an important aspect of egg production, as it helps

proponent to monitor their egg supply and ensure that they have enough eggs to

meet demand. The proponent will keep track of the number of eggs produced each

day, as well as the number of eggs sold and remaining in inventory. This can help

to identify trends in egg production and demand, and ensure that there is enough

inventory to meet customer needs.

Economic Analysis

Economic analysis is an important aspect of egg production, as it helps the

proponent to assess the profitability of their operations and make informed

decisions about production and pricing. The proponent will calculate the total cost

of producing eggs, including expenses such as feed, labor, equipment, and

facilities. This can help to identify areas where costs can be reduced and improve

overall profitability. The proponent will also calculate the revenue generated from
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UNIVERSITY OF RIZAL SYSTEM
Province of Rizal
Tanay Main Campus

College of Agriculture
egg sales, based on the price per egg and the number of eggs sold. This can help

to identify trends in demand and inform pricing decisions.

Table 3 shows the Projected Cost of Supplies and Materials in Egg

Production

Table 3

Projected Cost of Supplies and Materials in Egg Production

(2023 - 2026)

Particular Quantity Unit Price Total price

Pre-Operating Costs
RTL Dekalb Chicken 10,000 Php.350.00 Php. 3,500,000.00
heads
Concrete 1 Structure - Php. 700,000.00
Building/Structure
Egg Center/Storage 1 Structure - Php. 100,000.00
Steel Cage 10,000 Php.200.00 Php. 2,000,000.00
Semi-Automatic Trolley 1 unit Php. Php. 10,000.00
Feeder 10,000.00
Egg Trays (Plastic) 3 bundles Php.270.00 Php. 810.00
Total Pre-Operating Costs Php. 6,310,810.00
Operating Costs
Egg Trays (Carton) 1,080 Php.150.00 Php. 162,000.00
bundles
Vitamins and Medication - - Php. 20,000.00
Feed Allowance (1 year) 5,000 sacks Php.1,500.00 Php. 7,500,000.00
Total Operating Costs Php. 7,682,000.00
Total Cost Php.13,992,810.00

The table shows the projected cost of supplies and materials in egg

production for the period of 3 years. The table was divided into two sections; pre-

operating costs and operating costs. Pre-operating costs are the expenses
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UNIVERSITY OF RIZAL SYSTEM
Province of Rizal
Tanay Main Campus

College of Agriculture
incurred before an egg production operation begins full-scale production. These

costs include expenses related to preparing the facility, acquiring equipment and

supplies, and obtaining necessary licenses and permits. On the other hand,

operating costs are the ongoing expenses incurred in running an egg production

operation.

It can be gleaned from the table that the projected pre-operating cost of

supplies and materials in egg production is Php. 6,310,810.00 which will only be

from the first 3 months of the first year of the business, while the operating costs

amounts to Php. 7,682,000.00. The total cost of supplies and materials is

Php.13,992,810.00.

In an article by (To The Point: Why Do Eggs Cost so Much?, 2023) More

than 50 million chickens have died since early 2022 either as a direct result of the

disease or due to cullings, which have tried to prevent the spread of the avian flu.

The direct effect of supply-and-demand has played a clear role in pushing up egg

prices to record highs in 2023.

The cost of the production was high but the proponent hopes that the project

will be successful and profitable.

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UNIVERSITY OF RIZAL SYSTEM
Province of Rizal
Tanay Main Campus

College of Agriculture

Table 5 below shows the Projected Cost of Labor and Expenses.

Table 5

Projected Cost of Labor Expense

(May 1, 2023 – May 1, 2024)

Number of Hourly Total price

Particular
Hours rendered rate (PhP) (PhP)
Pre-Operating Costs
Construction of the Layer 720 hrs x 4
350.00 Php.1,008,000
House person
Installation of electrical
8 hrs x 2 100.00 Php.1,600.00
wirings
Installation of Waterline
8 hrs x 2 100.00 Php.1,600.00
System
Total Pre-Operating Costs Php.1,011,200.00
Operating Expenses
Disinfection of the broiler
96hrs x 2 50.00 Php.9,600.00
house
House/Building
2,880hrs x 2 350.00 Php.2,016,000.00
Management
Total Operating Costs Php.2,025,600.00
Total Costs Php.3,036,800.00

The table shows the projected cost of labor expense that will be incurred.

The table was divided into two section; pre-operating expense which discusses the

labor expense that will be incurred on the start of the project prior to full-scale

production, these includes the labor expense for the construction of the concrete

building amounting to Php.1,008,000, installation of electrical wirings and waterline

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UNIVERSITY OF RIZAL SYSTEM
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College of Agriculture
system which amounts to Php.1,600.00 each.

On the other hand, the operating expense costs Php.2,025,600 which

includes the payment for disinfection of the houses twice a week in one year that

amounts Php.9,600.00 and the house building management which amounts to

Php.2,016,000.00.

The total cost of labor in total is Php.3,086,800.00. The amount invested in

labor is obviously high but the proponent hopes it to become of good help in

building a successful egg production business.

Cost of labor is the biggest egg farming cost. It involves full-time labor and

is geared toward producing on a sufficient scale for the sale of both eggs and

poultry meat. (The Economics of Egg Farming - Backyard Poultry, 2020)

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UNIVERSITY OF RIZAL SYSTEM
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Tanay Main Campus

College of Agriculture

Table 6 shows the Projected Cost and Return Analysis in Egg Production.

Table 6

Projected Cost and Return Analysis in Egg Production

(May 2,2023 -September 2,2026)

Particulars Qty. Unit Price Amount

A. Total Gross
Income
Egg Production (96%)
115,200 trays 200.00 Php.23,040,000
(Year 1)
Egg Production (94%)
112,800 trays 200.00 Php.22,560,000
(Year 2)
Egg Production (90%)
108,000 trays 200.00 Php.21,600,000
(Year 3)
Year 1 Year 2 Year 3
B. Total Cost of
Php.17,029,610 Php.12,207,600 Php.12,825,000
Production
Pre-Operating Costs
Building/Structure
Cost of Supplies Php. 6,310,810 Php.2,500,000 Php.3,117,400
and Materials
Pre-Operating
Php.1,011,200 -
Labor Expenses
Total Php.7,322,010 Php.2,500,000 Php.3,117,400
Operating Costs
Cost of Supplies Php.7,682,000.00 Php.7,682,000 Php.7,682,000
and Materials
Operating Labor Php.2,025,600 Php.2,025,600 Php.2,025,600
Costs
Total Php.9,707,600 Php.9,707,600 Php.9,707,600
Year 1 Year 2 Year 3
C. Net Income Php.6,010,390 Php.10,352,400 Php.8,775,000
D. ROI (%) 35.29% 84.80% 68.42%

The table above shows the cost and return analysis of egg production in the
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UNIVERSITY OF RIZAL SYSTEM
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Tanay Main Campus

College of Agriculture
period of three years. The total production of egg in year 1 with an average peak

of production of 96% is 115,200 trays sold in Php.200.00 per tray has a gross profit

of Php.23,040,00, less the pre-operating costs and operating costs amounting to

Php.17,029,610, the net income is Php.6,010,390.

The production of egg in year 2 with an average peak of production of 94%

is 112,800 trays sold in Php.200.00 per tray, the gross profit is Php.22,560,000.

The net income in year 2 is Php.9,574,400 with an 87.60% return of investment.

In year 3, the average peak of production of 90 % have made 108,000 trays

of egg produced sold in Php.200.00 per tray, the gross profit is Php.21,600,000

and less the total production cost, the income will be Php.8,775,000 with 68.42%

return of investment. As expected, the return of investment will not be that high

that’s why the egg production business will need to run in 3 years until the time of

culling to be able to get back the investment.

The 19.18% percentage difference of year 2 and 3 was caused by the age

of the chickens, mortality rates, feed efficiency issues during the period of laying.

The change in operating expenses in each year will be for procurement of

additional supplies, materials and equipment and the contingency plan in rearing

layer chickens.
 Republic of the Philippines 67
UNIVERSITY OF RIZAL SYSTEM
Province of Rizal
Tanay Main Campus

College of Agriculture

Table 7 presents the Projected Income Statement of Egg Production

Table 7

Projected Income Statement of Egg Production

(May 2,2023 -September 2,2026)

Year 1 Year 2 Year 3

Sales Php.23,040,000 Php.22,560,000 Php.21,600,000
Cost of Sales
Feeds -Php.7,500,000 -Php.7,500,000 -Php.7,500,000
Egg Tray -Php.162,000 -Php.162,000 -Php.162,000
Medicine/Vitamins -Php.20,000 -Php.20,000 -Php.20,000
Pre-Operating Costs
RTL Dekalb -Php.3,500,000
- -
Chicken
Concrete -Php.700,000
- -
Building/Structure
Egg -Php.100,000
- -
Center/Storage
Steel Cage -Php.2,000,000 - -
Automatic Trolley -Php.10,000
- -
Feeder
Egg Trays (Plastic) -Php.810 - -
Other Expenses - -Php.2,500,000 -Php.3,117,400
Pre-Operating Labor
-Php.1,011,200 - -
Costs
Operating Labor Costs -Php.2,025,600 -Php.2,025,600 -Php.2,025,600
Net Income Php.6,010,390 Php.10,352,400 Php.8,775,000

The table above shows the projected income statement of egg production

project. As seen from the table, the period of the project will last for three years to

gain back the investment. The sales are indicated each year with

Php.23,040,00.00 for Year 1, Php.22,560,000.00 for Year 2 and Php.21,600.00 for

Year 3. It can be observed that the pre-operating costs in which the proponent
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UNIVERSITY OF RIZAL SYSTEM
Province of Rizal
Tanay Main Campus

College of Agriculture
uses to start the project is included in the year 1 statement.

Table 8 shows the Projected Balance Sheet for Egg Production

Table 8

Projected Balance Sheet

(Year 1)

Assets Liabilities
Accounts
Current Assets Php.10,719,610.00
Payable
Cash Php.3,219,610.00
Feeds Supply Php.7,500,000.00

Owner’s
Non-current Assets Php.6,310,000.00
Equity
RTL Hens Php.3,500,000.00
Buildings/Structures Php.800,000.00
Feeding Trolley Php.10,000.00
Steel Cages Php.2,000,000.00
Total
Total Assets Php.17,029,610.00 Php.17,029,610.00
Liabilities

The table shows the projected balance sheet for Year 1 where the project

proponent will start the project. The table is divided into Assets and Liabilities.

Assets are on the left side, it shows the current and fixed property that the

proponent owns which includes the cash on hand and the amount of feed supply

amounting to Php.10,719,610.

Non-current assets includes the RTL Hens,Buildings/Structures, Feeding

Trolley and Steel Cages. The total assets is Php.17,029,610. The liabilities shows

what the proponent owes and costs that it needs to pay which includes the owner’s
 Republic of the Philippines 69
UNIVERSITY OF RIZAL SYSTEM
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College of Agriculture
equity that costs Php.6,310,000 and the account payable Php.10,719,610.