According to the United States Department of Agriculture, over 31 billion pounds of chicken will be consumed in America in 2019, which works out to about 95 pounds of chicken per person. Coupled with the fact that consumers have increasingly been choosing chicken over other meat sources, this proves pretty definitively that a chicken farm is one of the best long-term investments around.
But how do you get in on this jackpot? Buying a chicken at the grocery store is simple, but buying a chicken farm can be pretty difficult. Like any real estate investment, there are countless factors that determine whether it’s a prudent investment or a potential bust, and overlooking any one of them can set you up for a big loss. Let’s look at some of the most important considerations if you’re thinking about buying a chicken farm in Alabama.
Are You Looking to Buy or Build?
If you buy a fully-developed chicken farm that’s already up and running, with a supply chain already in place, you can step in on day one and start doing business. But these farms are harder to find and will obviously cost more upfront.
On the other hand, you could buy a barebones operation, or even just a plot of land, and develop it yourself. While this requires a smaller initial outlay of money, it can get complicated quickly. Are you going to farm broilers or layers — or both? Will your farm be organic, free range, or conventional? You need to consider infrastructure. Even a modest poultry operation requires systems for sanitation, water, feeding, transportation, and temperature control, just to name a few. Designing and building these facilities will take a lot of planning, time, and, of course, money.
Whichever option you settle on, the best way to make sure you’re getting the most out of your investment is to work with an experienced agent. They’ll guide you to the best outcome within your budget, and help negotiate the best possible price, so you can start your new industrial venture from a place of financial strength.
Location Is Key
When you’re considering the location of your chicken farm, there are two main factors you’ll want to take into account.
First, you’ll need to think about your farm’s proximity to market. If your farm is far away from where you’ll be selling your products, you’re going to have to take transportation expenses into account, which will significantly add to your overhead. On the other hand, properties that are closer to highly populated areas where you’ll likely be selling your products are going to be more expensive. So you’ll have to weigh a larger initial investment against higher ongoing expenses.
Second, you have to take land prices into account. According to the USDA, Alabama farmland is valued at approximately $2,780 per acre. While a chicken farm requires a smaller footprint than, say, a beef or pork operation, you’re still going to be looking at a moderately large plot of land. Knowing the precise value of the land will not only help you set a realistic budget, it will aid you when it comes to negotiating for properties.
Familiarize Yourself with Local Laws
Farming is a highly regulated industry, and with good reason: safety is paramount when it comes to our food supply. So if you’re thinking of getting into the poultry business, you must know and comply with all local agricultural law, or risk failure or even legal action.
In Alabama, the Alabama Shell Egg Law sets out specific standards for everything from marking dates on egg cartons, to different weight classifications, to temperature requirements for storage. And that’s just the beginning. There are laws mandating how far your poultry farm has to be set back from your property line (165 feet) and from anyone else’s residence (330 feet), to air quality standards, to acceptable methods of waste disposal, to types of hatcheries.
If you fail to meet any of these standards, you’ll be fined by the Alabama Department of Agriculture. If you want to do profitable business in Alabama, you’ll have to make sure you meet all their legal standards.
How Are You Going to Pay?
Just as when you buy a house, you’ll likely have to seek out financing to buy a chicken farm. Luckily, there are many specific programs that can help you.
The United States Department of Agriculture (USDA) has a variety of loan programs aimed specifically at farmers. These loans come with very reasonable interest rates between 1.5% and 4%, and are open to beginning farmers working on nearly any scale. The Direct Farm Ownership Loans are targeted towards people looking to buy a farm, but they also offer Direct Operating Loans, which can help you with ongoing operating costs like supplies, feed, and fuel, and Microloans, which are an unrestricted loan for general expenses.
Whatever your needs, there’s likely a USDA loan program that can help you meet your goals.
How Do You Get Started?
If you’ve done your research and decided that you want to buy a chicken farm in Alabama, the next step for you is to partner with an experienced local agent. A great agent will be able to pair you with an agricultural property that fits your goals and your budget, and will be able to help you through every step in the process, from offers, to negotiations, to closing.
Clever Partner Agents are top performers in their markets, and can help you start building a commercial poultry empire. They offer a full service agent experience for a reasonable flat fee, and Clever clients are eligible for a $1,000 rebate at closing on properties costing more than $150,000.
Intrigued? Contact us today for a no-obligation consultation!