If building a commercial poultry farm is on your mind, you’re not alone! The poultry industry is booming, and poultry sales are expected to remain strong. However, getting into poultry farming can be quite complex.
Ben Chandler, Managing Director of the Poultry Division at First Financial Bank, has helped farmers develop new poultry operations since he started working with FFB. His decades of experience in poultry lending are the foundation for a solid plan to build a poultry farm.
Step One: Become Connected with a Poultry Integrator
“Once you’ve decided on the type of farm, the integrator will give you a contract for new houses. Then, you’ll receive a letter of intent from that integrator to contract with you once the construction of the new farm is complete,” says Chandler.
This is the building block of your entire operation. Get familiar with local integrators that are already establishing new farms around your area. When you’re in touch, please be ready to discuss the type of farm you’re looking at.
The three leading options are typically considered to be:
- Broiler farms – where chickens are raised for meat production.
- Breeder farms – where stock is raised to produce hatching eggs.
- Pullet farms – where young female chickens are raised before being moved to laying facilities.
Step Two: Find the Right Location
Now that you have an integrator on board, it’s time to identify where your farm will be located. If you already own suitable land, that’s a great start! Existing land ownership can provide equity that helps with financing and reduces your overall loan amount.
“You may already own land where your farm will be located. That’s great if you do. If not, you’ll need to identify a piece of land that will be suitable for construction”, Chandler enforces.
Location matters tremendously in poultry farming. Many integrators require farms to be within a 30-50-mile radius of their processing facilities or feed mills. Transportation costs and logistics make locations beyond this range impractical for most operations.
Beyond proximity to the integrator, you’ll want to consider factors such as road access (trucks will be visiting your farm regularly), water availability, soil drainage, and whether the property has room for future expansion.
Environmental regulations will also be important to consider early in your loan search. Request that the Natural Resource Conservation Service (NRCS) connect you with someone to begin your work on a Certified Nutrient Management Plan (CNMP), also known as a waste management plan.
That’s an important step that you can’t speed up. Lenders typically expect it to be completed before they can issue the loan. Beginning these environmental requirements early can prevent delays later in the construction process.
Step Three: Build Your Budget with Multiple Bids
This is where many new farmers underestimate the amount of work involved. Building a poultry farm requires coordinating multiple contractors and suppliers, and you’ll want competitive bids for every component of your project.
Reach out to at least three contractors in each of these categories:
- Building contractors (for the poultry houses themselves)
- Equipment suppliers (feeders, waterers, ventilation systems, generators)
- Excavating and site preparation contractors
- Plumbers and electricians
- Shavings/bedding suppliers (unless your integrator provides these)
- Propane or natural gas companies
- Power companies (for new service or upgrades)
Having three quotes for each major aspect of your project serves two main goals: ensuring you receive competitive prices and providing alternative suppliers if your primary contractor is no longer available (for myriad reasons).
Step Four: Work With a Lender Who Understands Poultry
That is where many aspiring poultry producers face the biggest stumbling block in the early days of their poultry farming career goals. Many traditional banks may not fully understand how a poultry operation is financed. First Financial Bank has specialized in poultry lending since 1993 and assists in the construction of new poultry farms throughout the US. Understanding your loan options is a great way to become more familiar with them!
- FSA (Farm Service Agency) loans can be particularly helpful for beginning farmers or those who can’t obtain conventional financing. FSA Farm Ownership Loans can cover land purchase, construction costs, and even closing costs.
- SBA (Small Business Administration) loans through the 7(a) program provide the flexibility needed to buy real estate and equipment, and even working capital. Understanding how to use an SBA loan for agricultural businesses opens up additional financing options.
- Conventional agricultural loans may be an excellent fit depending on your finances and down payment potential.
The idea is to hire a lender who can help you “customize a loan package that seems to make sense for your needs,” as Chandler states. This can involve pairing a variety of loan products, designing terms around your anticipated income, or devising creative ways to reduce out-of-pocket cash needs while still protecting and satisfying your equity position.
Your lender should ask substantive questions about how you operate: How many poultry houses are you constructing? What are the dimensions? Do you have farming experience? Have you spoken to the integrator about your projected income?
Step Five: Close the Loan and Manage Construction
Construction of a poultry farm involves integrating several moving parts, and having an experienced lender partner becomes even more important during this stage. “In construction, we will collaborate with you every step of the way to ensure everything goes as planned,” Chandler says.
Building a poultry farm is a significant investment in time, money, and energy. For farmers who do their homework, collaborate with established suppliers, and approach their business systematically, it is also a lucrative business opportunity that offers stable income for decades.
Keep in mind that this is only the start. You’d then be dealing with flock management, biosecurity, equipment maintenance, and optimization of production once your farm is built and operational. However, at the beginning of the journey, a solid foundation is critical: integration partnerships, location, financing, and expert construction. In an industry that remains integral and critical for feeding America, you will find yourself poised for success!
In Summary
If you’re considering trying out a commercial poultry farm, the team at First Financial Bank’s Poultry Division has everything that you need to achieve your goals! With more than 30 years in poultry lending, we’re ‘in the trenches’ with you. Let’s start the discussion about turning your goals for poultry farming into reality.
