Pasture-based versus conventional broiler chicken production: Enterprise budget modeling and profitability analysis

Broiler production systems differ substantially in management configuration, operational scale, and market orientation, which shape their economic performance. This study evaluated the economics of three broiler production systems: a large-scale conventional system, a medium-scale conventional system, and a pasture-based system. Enterprise budgeting was used to estimate total production costs, followed by break-even, profitability and sensitivity analysis. Unit production costs were lowest in the large-scale conventional system (USD 0.52 lb⁻¹), intermediate in the medium-scale system (USD 0.64 lb⁻¹), and highest in the pasture-based system (USD 1.92 lb⁻¹), reflecting differences in scale and cost structure. Under the conventional market price (USD 1.32 lb⁻¹), the large-scale and medium-scale systems generated positive economic profits of USD 2.12 million yr⁻¹ and USD 421,195 yr⁻¹, respectively, whereas the pasture-based system incurred an economic loss of USD 5,907 yr⁻¹ (return on investment of -48%). When a premium price (USD 6.09 lb⁻¹) was applied, the pasture-based system shifted to positive economic profit (USD 16,918 yr⁻¹; ROI = 138%), with its break-even production threshold declining from 2,058 to 445 birds yr⁻¹. Sensitivity analysis demonstrated that feed cost exerted the greatest influence on profitability in conventional systems, whereas labor cost had a proportionally greater effect on the pasture-based system; however, the relative economic performance of the modeled systems remained unchanged across evaluated sensitivity scenarios. Overall, production scale was a primary determinant of economic feasibility in conventional systems, whereas pasture-based systems depended on market differentiation and price premiums to offset higher production costs associated with management practices known to improve welfare status. These findings indicate that economic performance should be assessed within the context of production objectives and prevailing market price structures, rather than unit production cost alone.