The Lucknow Sentinel, 1998-03-18, Page 84CSS
advisor
that they usually have
computerized • automatic
temperature control, feed-
ing, watering, and lighting.
In these facilities, time
spent in the barn averages
out to two or three hours
• • F Industry :minimum space
requirements • is ...0.65
square foot per bird, .how-
evet', most new buildings
allow one square foot .per.
bird. Thisleaves room for
increased quotarr allotment
•
Quota prices have risen ciramatieally
over the past two years 'or:.so,
from about $15 to $17 unit rang
to $25 to $27 unit range,
per day monitoring .flock
healthand making sure the
feeding and environmental
control technology is•Qper
acing. asit should. This is a
consideration for folks
wanting to diversify, .or
work around off$atm. jobs,
Management : standards
are:,a death loss -of two to,
three per cent,and feed
Conversion of 1.$54,9 for
a1,75 kg bird. Feed costs
and conversion rise 'for
heavier birds which carry
Price incentive,but also
Added risk of death loss,
• Common - profiles of
neva-, entrants to the indus-
try include retired dairy
fanners and European buy- •
a ors. Dairy farmers, regard.
broiler .productionas hav-.
ing The potential to provide
the income they are :used to
while requiring signifi-
cantly less labor. They can
also reinvest the •proceeds
from the, dairy "quota. sales
without impact from the
capital gains tax,
• Ih costing a broiler pro-
ject, I'll use the example of
a producer. who owns a
100 acre parcel of landfree
and clear, and intends •to
build. a new broiler barn
and; purchase, quota. 'The,
following are costing'
gnideltnes: . '.
• Building; costs, for new'
broiler barns range. from
$12 to $1.65 per square.
foot. 'This . cost , iricludes
,automated ;;feeding and
watering.equipmerit,
Pa
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COMMUNICATIONS
.400 Huron St.,
Stratford, ON
273-3300
1-800-565.9983
iil�ers wan
.t high- quota
ays credit
`entry Wilson,
modern broiler.
barnalmost runs
itselft looks like a,
great diversification ven-
tune but current quota costs:
make broilers a poor
investment whenall, or
most of the project,
requires financing,
In the past few years,
new broiler •chicken facili-
ties have popped up not
only on existing poultry
farms, but, also on mid-'
sized dairy or cash crop
operations, Could this be a
way, to diversify your farm
business without adding
unmanageable labor , bur-
dens?
What makes modern
broiler barns attractive ".is
en Heuve'
nstruction Ltd.
COMMERCIAL• AND AGRICULTURAL BUILDINGS
• Poultry • Hog • Dairy
CANADIAN
FARM 1100EERS
ASSOCIATION
2,GODERICH, ONTARIO,N7A 3X8
TELEPHONE: 519-524-9176
FAX: 519`-524-9240
After 6 p.11n.
Ca11 Ken -at 519-5.22-1858
STEELWAY
PRE-ENGINEERED
BUIf;DUNG SYSTEMS
and future expansion
• Assuming the barn will.
house the industry mini -
Main of 15,00 units, and at
a building cost of $14 per
bard, the total cost is
$210,000 for a State-of-
the-art broiler barn. :. '.
• Quota priceshave`tisenA
dramatically of the past
two . years Or so from
HOW 'would
it cis l•flOw?
approximately '$15 - $17
unit range to $25 - $27 unit
range, 'Quota for a 15,000.
unit operation, costs
$375,000 at $25 per unit.
Building and quota costa
now total $585,000.
The security value.
would bet land $300,000; •
building $150,000 v(at 70
per cent "of cost); quota
$375,000 • (100 per cent
transferable); for a total of
$825,000.
Additional security may
o'be 'required, depending on
the property value'; and the
lending policies of •the
financial institution.
Allowable production
per year is 11.40/ kg/unit
.of " .quota. Net available
revenue for living and debt
servicing is 26 to 30 cents
a kg depending on man-
agement, feed conversion,
etc. A ,1 ,000 -unit opera
tion would therefore gen-
erate; between $44,000 and
and living.
As a guideline; these
operations (land; building
and quota) should cash
flow over no more than 15
years, However, because•
of the uncertainty of future
quota values; it May be in
the best interest of both
lenderandborrower to
amottize quota loans over
no more than five to seven,
years.
this etcam ►le, , pay-
ment on $58.5,000 aver 15
years at seven per cent is.
$65,000 per year. 'This
enterprise will not pay for.
itself when quota is..at
$25/unit. : Quota prices
need to come down to the
$13 - $17 range for the
businessto pay for itself
and' allow same residual
funding for• living expens a:
es. .. ••• " •
The. 'numbers become
more attractive if there is:
more equity in the broiler
enterprise. ••
Other options include
buying an existing broiler.;
operation: Broiler •farms
have recently changed •
hand in Ontario for • $28
• $35lunit for • land, build-
ings and quota. With some.
cash or equity in • other.
properties along with Off-
farm
fffarm income, thi$ may be
viable
Anotheroption is reno<
'gating an existing structure
which 'may only cost.. a
fraction of a' new building,,
thus allowing a less expen
sive entry to the business..'`
Lastly; . a• producer can
wait for ..quota prices to
fall:
(Wilson is."a.credit advisor
+kith Parer .'Credit `
Corporation, Wyoming'
Farm safety• fact
Harvesting as opposed.
to planting activities are
associated with more non-.
traotor, machinery fatali-
$51,000 far debt., servicing •• ties..