Financing a Poultry Operation in Oklahoma
Starting or expanding a poultry operation can involve major investments in land, buildings, equipment, utilities, and ongoing operating expenses. Careful planning is important before taking on a new project.
Poultry loans may help qualified agricultural producers finance certain costs associated with a poultry operation.
Common Poultry Financing Needs
Every operation is different, but financing may be used for needs such as:
Purchasing agricultural land
Constructing poultry houses
Improving existing facilities
Purchasing equipment
Installing ventilation systems
Adding feeding or watering systems
Upgrading electrical service
Improving roads or drainage
Covering certain operating expenses
The right financing structure will depend on the project, available collateral, expected income, and the borrower’s financial position.
Build a Detailed Project Budget
Poultry projects often include more than the cost of the building itself. Producers should create a budget that includes all expected expenses.
Possible expenses include:
Site preparation
Construction
Equipment installation
Utility connections
Permits
Insurance
Labor
Maintenance
Biosecurity measures
Backup power systems
A detailed budget can reduce the risk of unexpected expenses during construction or expansion.
Review Contract and Income Expectations
Some poultry operations work through production contracts. Before applying for financing, review the contract carefully and understand how payments are calculated.
Consider:
Contract length
Production requirements
Facility standards
Upgrade requirements
Operating expenses
Expected income
Renewal conditions
A lender may review this information as part of the financing process.
Consider the Property
The location and condition of the property can have a major effect on the project. Producers should evaluate access, drainage, water supply, electrical capacity, environmental requirements, and distance from other buildings.
A land appraisal may be required when the land or poultry facilities will be used as collateral.
Plan for Ongoing Expenses
Building the facility is only the beginning. Producers should also plan for ongoing costs such as utilities, repairs, maintenance, insurance, litter management, fuel, and labor.
A realistic cash-flow projection should account for both expected income and recurring expenses.
Work With an Agricultural Lender
Poultry operations have specialized financing needs. Working with a lender who understands agriculture can help producers evaluate the project and select a repayment structure that matches expected cash flow.
Oklahoma AgCredit works with Oklahoma agricultural producers to discuss financing for land, poultry facilities, equipment, and other qualifying agricultural investments.
