Chicken Farm for Sale: Is it the Right One?

First Financial Bank
Jul 11, 2022
So, you’re trying to find a good commercial chicken farm for sale. Maybe you’ve already got your eye on one. What should you ask before you buy?

If you’ve purchased property before, you know that there are a variety of things you need to think about before putting your signature on a contract. But if you are buying a chicken farm for the first time, there are some specific questions you’ll want to ask to determine if this is the right chicken farm for you:

1) Which integrator is the farm under contract with currently?

Most commercial chicken farms are under contract with one of the large integrators, such as Tyson, Pilgrim’s or Perdue. Whomever they contract with currently would be who you would need to work with going forward. This is a complex arrangement and you’ll want to know the specific details before you buy a property. Work with a legal advisor who has experience in the industry and understands your rights and responsibilities.

2) What structures and land are included in the sale – and what is the condition of those assets?

How many acres? What’s the makeup of that acreage in topography and land usage possibilities? What buildings or structures are onsite and is there a home for you on the property?

A solid overall infrastructure is important for stable and efficient production. Some commercial chicken farms on the market are equipped with many of the structures, equipment and materials you’ll need. Once you know what is included, you can begin to assess the current state of those elements and determine what value they bring to your plans.

In particular, you’ll want to assess the condition of the chicken houses. Are they up to par? Do they need repairs or to be replaced? Do they meet the current requirements of the integrator? Those are just a few of the factors to think about.

3) Where is it located – and what does that mean for your potential business?

Location is always an important factor in real estate purchases, but for a chicken farm, it has an effect on your potential income. As a contract chicken farmer, most companies require that your farm is within a certain mile radius of one of their feed mills that serve their processing complexes.

What is the density of chicken farms in your area?

You’ll also want to know how many other chicken farms for that integrator are located nearby because in addition to being your neighbors, they’ll also be your competitors for the best prices for their flocks.

4) What equipment or non-structural assets are potentially included in the sale? And if not available, what will you need to buy or lease?

It’s essential to understand exactly what equipment and potential supplies might be part of the deal. And again, like the buildings, what is the current state of those elements? If equipment such as feeding, watering and/or monitoring systems are not included and/or included but aren’t functioning, you’ll need to factor that into your planning, if you decide to move forward on this purchase.

Putting it all together

When assessing a commercial chicken farm, the more information you have, the better. Talk to the experts: experienced chicken farmers, the specific integrator for that farm plus your knowledgeable legal and financial advisors who understand the industry. And then you can use that information as you build your plan and make a decision on whether this chicken farm is (or is not) the one for you.

Need some help navigating the complex finance processes of a poultry farm? Check out this article for some tips. Want to discuss your plans? Let’s chat.

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