Montgomery county weighs options for poultry industry news farmtalknewspaper.com electricity omd

Prospective growers were one of the first groups the MCAC wanted to engage in the early investigative stages of the Tyson process because a large grower network would be needed to support a local plant, Purdon said. A plant the size of the one discussed would likely require a grower network of over 300 farms within a 60-mile radius.

Similar in time consumption to running a dairy, laying hen houses were among the most time consuming of the poultry growing opportunities discussed. Eggs needed to be collected multiple times a day and in general more time would be committed by the owners.

“Broiler houses are like the running backs of the poultry industry — everyone knows about their importance and skills,” Joyner said. “Breeder hens are more like the linebackers of the poultry industry — they’re the workhorses and provide the foundation.”

Despite the seemingly daunting task of checking on thousands of birds each day, Joyner said most operations, including hens, could be maintained by a family and one additional hand, with additional help if a family is wanting greater flexibility.

Maintaining a good poultry operation requires good organizational and animal management skills. Joyner said the husbandry aspects of the poultry industry would likely appeal to cattle operators seasoned in detecting illness and overall herd health.

Above all, Joyner reminded prospective producers about the contractual nature of poultry production. Poultry contracts are often long-term, with a minimum of 15 years, and Joyner encouraged interested growers to research and consider the opportunity fully before committing.

Two lenders with poultry industry lending agent Live Oak Bank provided insight into cost structure and potential profitability for poultry operators. Live Oak Bank has over $1 billion in poultry loans and a specialized team devoted to the poultry industry nationwide.

Although poultry production is a contractual business, there are price incentives for efficiency, low death loss, and overall good management. Live Oak lender Vance Keaton said opportunities exist to earn 0.02 cents per pound higher on average due to good animal husbandry practices.

“The average existing broiler house pays around 0.06 cents per pound and new houses are having a little bit better pay than we see typically across the country,” Keaton said. “Expenses on a broiler farm, including taxes and facilities will be around 30 to 35 percent of that gross income, which can vary depending on management style.”

“For expenses on a breeder farm, you’re probably looking at expenses being 25 percent of your gross income and the debt normally is roughly about 50 percent of the gross income,” said Live Oak Bank lender Graham Kelly. “So you can do the math and you have 160 eggs per hen, paying at an average $1 per dozen amount with cash flows at around 25 percent of gross income.”

The last and potentially most important topic discussed at the MCAC meeting was the costs associated with diving into the poultry industry. Average poultry farm size is currently eight houses, and with equipment and the sheer size of the houses — around 60 by 600 feet, costs can pile up quickly.

Lenders Keaton and Kelly encouraged prospective producers to think of the investment in terms of square feet rather than a lump sum, and also to consider the loan would be a minimum of 15 years and longer-term loans could carry some obvious benefits.

“I would anticipate the structure, equipment and generator package for new houses to come in somewhere between $11 and $12 per square foot,” Graham said. “I would also expect grading costs to be around $20,000 to $30,000 per pad. If you added all that up for an eight- house farm, you would probably be looking at total cost somewhere around $3.5 million.”

Keaton mentioned poultry companies sometimes offer dollar per square foot based incentives to producers. He said the practice is being phased out of some areas of the country, but the potential for a small price break could be possible depending on the poultry company and area of the country.

The next meeting for interested producers will feature university level information about the mechanics of the poultry industry. The meeting will be hosted by the MCAC, Kansas State University Wildcat Extension District, Oklahoma State University Cooperative Extension Service, and Montgomery County Farm Bureau on Jan. 9 at Independence’s Memorial Hall. £