• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Poultry House Sales and Income Data

Status
Not open for further replies.

Chris Graham

Freshman Member
Joined
Dec 6, 2002
Hello,

I am an appraiser in Bowling Green, KY and I have been engaged to appraise a poultry farm. After asking around for data, it was recommended that I come to this forum.

My subject is approximately forty acres with two breeding houses (40 x 500). They are both less than five years old and in average condition. The owner has a license agreement with Perdue Farms.

If anyone has any sales and/or income data and would be willing to share I would greatly appreciate it and will certainly reciprocate.

Thank You,

Chris A. Graham
Graham Company
Bowling Green, KY
 

David S. Roberson

Senior Member
Gold Supporting Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
I think Terrell Shields could help you. Hello, Terrell?
 

Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
Chris:
Terrell posted four of his comparable sales on another thread titled “Curious Review” on this same forum. I did a graphical analysis of his sales and it showed one of the most unusual exponential curves I have ever seen. When I get home I will look at the graph and give you the number and would like to know how close it is to your final answer. This curve explained about 98% of the variance in his data with no adjustments necessary. It is so good it makes me suspicious. If you will read the other thread, somebody told him basically the same thing in words and instead of graphics.
 

Paul Ness MAI

Member
Joined
Jan 14, 2002
Professional Status
Certified General Appraiser
State
Pennsylvania
I know an appraiser who does a lot of complex ag appraisals, and has done a number of poultry operations along the eastern seaboard. If you provide me with your email address I'll email you with his contact info.
 

Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
Based on Terrell's sale data from the other thread, your property would be valued at $680,000. Apparently all of these farms have approximately the same capital tied up in improvements. Let me know if I am close.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Yo - I hear ya. We don't have Perdue here, but Cobb-Vantress moved into your country a few years ago. To clarify, C-V is a division of Tyson and they produce the grandparent stock...the birds who produce the eggs that produce the hens who produce the eggs for broilers. It is our Cadillac farm. All barns will be full concrete floors, tunnel/cool cell, automated controllers 16 stage or more, generator auto-run, etc.

I can probably help. Cobb farms are paid annual per SF in the $3.50 to $4 per SF range. Regular Breeder hens in this area produce from $2.50 - $3.00 consistently. Normally they do not have full concrete floors, have less automation and may or may not have generators.

See if you can get a hold of the Perdue field man and find out if they have a printout that they give to prospective growers that details what they anticipate the growers will make. Some companies are reluctant to discuss this, but I find most will just fax me a copy. It will only apply to the barn, of course, but gives a good start.

In the income approach, you have to use a owner statement type NOI as there are no rentals....(actually there were some, but the last one disappeared about 3 years ago here.) Those old contracts were per mo. to the grower but the company used their own employees to work the farm and any changes made was made at their expense...was real nice for appraisal work.

To me Income is $/SF x SF PLUS typical dwelling rent annualized PLUS litter sales PLUS surplus land rents annualized PLUS bonuses (we often see winter energy bonuses and performance bonuses.) If being paid by the doz. eggs, owner Sch. F is helpful.

Expenses I allow for are Tax, insurance, utilities, labor, maintenance (usually is underreported by the owner), and a reserve allowance that is normally 2.5% or so. Management i kinda lump with labor and use 10% in the absence of hired labor figures. I find most hen farms seem to fall in the 35-45% expense ratio range, and overall cap rates fall between 10-12% for farms with large dwellings or land contributions and 12-16% for lesser land to imp. ratios. Older operations (50% depreciated or more) seem to cap out higher 16% - 22% typically. This appears to be a function of short remaining lives.

I rely upon sales data under there is a real complex of buildings and land and I might weight the cost with both being affected by the income approach. If the Inc approach is lower than the other indicators, it suggests to me that they may have a harder time cash flowing. Where Income approach is well above other indicators, it is usually a newer farm with better cash flows.

email me Chris and I will try to send something more definitive -
 

Chris Graham

Freshman Member
Joined
Dec 6, 2002
Thanks to all who responded. I did not realize that I did not have my profile set to display my email address. It is [email protected].

I appreciate all who have offered their assistance and information.

Chris
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks