10 Dec 2020

What factors are most influential in the costs of a vertical company?

empresa verticalizada


Juan Carlos Abad

Rafael Gil Evangelista

Diamond V

Content available in: Español (Spanish)

poultry integration The pandemic caused by the COVID-19 virus was able to demonstrate the population’s great capacity for adaptation in the face of new challenges that arose. Not only have we learned to live in confinement, but also adapted to the so-called new normal that involved the use of masks and foregoing hugs and kisses between friends and family.

In the same context, companies have also had to adapt to the new situation because, to a greater or lesser degree, the current pandemic has affected the income situation of most sectors.

In many cases, there have been companies that have had to close temporarily, however, the food sector was considered by the government as an essential activity and production continued with the great effort that this has entailed for the different operators.

But perhaps, the great paradox is that, although we have been an essential sector, we have not been a profitable sector

In the broiler industry, we lived through the first days expecting the consumption of chicken meat to increase during confinement, but, little by little, we found ourselves facing the reality that it actually dropped between 12-15 % and, consequently, so did its price.

Poultry companies had to adapt to these new situations, adopting as a first response production adjustments based on demand with the consequent reduction in weekly productions.

The difficult thing to predict is what will happen in the short term. There are unknowns that are challenging to answer, such as how many tourists will we receive this year? And how is this going to affect the consumption of chicken meat?

Therefore, it is time to make the company more competitive and efficient and now we have a good opportunity to review the factors that have the greatest impact on the cost of broiler production.

We can group the main productive factors in meat poultry farming into three categories

Over the years, the role of these different factors that are important in the cost of a kilo of chicken meat has been changing. Previously, factors related to breeders were one of the key points when choosing the lineage, but the implication of their costs affecting the cost of a kilo of meat is currently the lowest amongst the three groups mentioned.


Among the factors linked to the breeders are the number of hatching eggs, their average hatchability and number of chicks obtained, feed consumption per breeder and their average weight at the end of their productive cycle. In general, the common denominator of these factors is that they are very easy to calculate.






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