1. EVC-based Pricing Calculation for ODI Case
The costs associated with ODI vs. Debeaking
ODI Debeaking
Labor Labor
Price of lenses (X) Egg loss due to trauma
Mortality Mortality
Feed
ODI cost = labor + lens (set it as X) + mortality
Debeaking cost = labor + mortality + feeding loss + egg loss
Set two costs as the same and solve for X:
X = (labor_debeaking – labor_ODI) + (mortality_debeaking – mortality_ODI)
+ (feeding loss_debeaking) + (egg loss_debeaking)
Savings on labor
~0 (debeaking: 220 birds/hr, $7.5/hr with a crew of 3; ODI: 225 birds/hr, similar crew, cancelled out)
Savings on Mortality
Mortality rate is reduced from 9% to 4.5%
Cost per surviving bird for Debeaking = 2.4 + 2.4*9% = $2.616 per bird (assume the replacement bird
won't die again)
Cost per surviving bird for ODI = 2.40 + 2.4*4.5% = 2.508 per bird (assume the replacement bird won't
die again)
Savings on mortality = 2.6160 -2.5080 = 10.80 cents /bird/year
Savings on Feed
Quantity of feed saved per bird per year: 156 lbs per inch per day /20,000birds * 3/8 inch (at least) =
0.0029 lbs per bird per day
Price of feed: $158 per ton / 2000 lbs per ton = 7.90 cents/lb
Savings per bird per year = 0.0029 lbs per bird per day * 7.90 cents/lb * 365 days
= 8.36 cents per bird per yr
Savings on egg loss due to trauma
Number of egg loss prevented: 1 egg (no eggs in first week, recovered to one egg loss by month 5)
Price of egg: 53 cents per dozen / 12 = 4.42 cents per egg
Savings on egg loss: 4.42 x 1 = 4.42 cents/bird/yr
So solve for X
X = (labor_Debeaking –labor_ODI) + (mortality_Debeaking-mortality_ODI) + (feeding
loss_Debeaking) + (egg loss_debeaking)
= 0 + 10.80 cents (mortality) + 8.36 cents (feed) + 4.42 cents (egg loss)
= 23.58 cents