Would-be operators should have a plan
As today’s farms continue to evolve and diversify, some producers may be tossing around the idea of investing in the commercial poultry business. If this topic has come up in the farm management plan, here are some things to consider.
Type of Poultry: There are many different types of poultry contracts available depending on what type of birds a producer would like to raise. Broilers, pullets, broiler breeders, turkeys and laying hens are all options for those interested in commercial poultry production.
Investment: Before signing a contract, producers need to have several conversations with the company (integrator) and have a good idea of the costs and risks involved.
“Prior to getting into the business, conversations should be had with potential integrators on the need for houses in the area as putting up houses is a large financial investment,” Dr. Sara Orlowski, assistant professor of the Department of Poultry Sciences and Research Station Director with the University of Arkansas, said.
While each integrator is different, she explained some companies do offer assistance in financing of new facilities. Other topics for discussion prior to making the investment are insurance, financial responsibility for mortality losses and “backup” plans.
“If a producer decides they ever want to get out of the poultry business, it would be best to talk with the integrator about your contract, and if there is an opportunity for that contract to continue over should another producer buy the farm,” Orlowski said.
Location: The real estate term phrase location, location, location applies to potential poultry operations. The location of the farm might determine if a company is willing to enter into a contract with the producer.
“Typically, a company would like a farm to be within a 25 to 50-mile range or less from the feed mill and hatchery,” Orlowski explained.
Other things to consider about poultry barn location include proximity to existing poultry farms, land potential for expansion, neighbors (who will appreciate if fans are oriented to blow away from their property), easements and vegetative buffers for aesthetic appearance and assistance in reducing odors, feathers and dust.
Things to Avoid: Since entering into the commercial poultry business requires a large sum of capital, it can be tempting to cut corners in order to reduce the costs, which Orlowski advised against.
“When considering putting up poultry houses, because of the financial investment, it can be easy to go for the cheapest option on fans, feed lines, drinkers, etc. This may not be beneficial in the long run as having better housing environment can help improve bird performance and ultimately income when the birds are processed or start producing eggs,” she said.
Mortality disposal considerations are sometimes thought of too late, and this is another thing that new producers will want to avoid.
“That is typically the grower’s responsibility and if not properly thought out could transfer disease to live, healthy birds,” Orlowski cautioned. “Another potential pitfall is hiring help. Whoever is taking care of the birds needs to be attentive and in tune with the bird’s needs. Having a good caretaker can make or break you when it comes to pay-out after processing.”
