The Broiler Buddy: A Commercial Poultry Financial Decision Tool is designed to help existing and prospective growers make risk management and financial investment decisions on their farms. The tool's dual scenario comparison format allows growers to evaluate the payback of various upgrade and maintenance investments and farm income impacts from production or operational cost changes. New or prospective growers can evaluate the effects of various housing costs, interest rates, and loan formats on farm income. Users can model differing contract terms and model impacts of production or cost changes to the farm. The tool calculates these impacts on long- and short-term cash flows that can be user-defined. The results of these calculations are estimates and strictly a function of the data put into the tool. Faulty data input will result in faulty results. Users must carefully input reasonable and representative data to ensure a reasonable result. However, even with the most exact data, the results are estimates and are not intended to be used as any guarantee of return for commercial poultry businesses.  

Users of the calculator must first decide to analyze their business from one of two standpoints–an existing grower with poultry houses in production or a new grower building or buying a poultry farm. Either position can then compare two scenarios to evaluate the impacts of various changes to production, expenses, or financing. By carefully answering the following questions, the user will be directed through the appropriate data entry pages and finally to the results. If a side-by-side comparison is chosen, the results will indicate clearly which scenario has the best return for the user.  

Not all potential tax scenarios are estimated by the tool. The tax section is a simple "overall estimation" function treated as income tax. Self Employment taxes are not separated. Therefore, some year's taxes may be over-estimated, others may be under-estimated, based on the tax percentage a user chooses.

Notations/assumptions:Certain assumptions were made throughout the calculator to simplify the results across multiple applications. 

• This version of the “Broiler Buddy” is designed for a southeastern U.S. application. If using the tool to model other areas of the U.S., your results may not reflect the impact of your weather patterns on variable costs or house efficiencies. 
• Production (and pay per pound delivered) is constant for every flock, and the resulting bird revenue is applied to the yearly cash flow in a single annual amount. 
• Variable costs, like utilities, insurance, etc., are calculated based on data gathered from existing farms and segregated by house age and class. Older houses generally have higher expenses applied. Lower-classed houses (Class B or C type) have higher costs than Class A houses. Classes are explained on the appropriate entry page. 
• Loans are simply fixed-interest amortization loans without balloon payments. Payments are annualized and applied to the yearly cash flow as a single annual expense. 
• Depreciation: We have limited depreciation calculations for ease of use, so we use straight-line methods. For new loans, only a 7- or 10-year option is available. 

This material is based upon work supported by USDA/NIFA under Award Number 2021-70027-34722

Start

Choose one of the two options below. In addition to the listed evaluation, each choice can also evaluate changes in production and expenses.

Energy / Heating Fuel Bonus Payments

Choose and input one or more of the below if you receive an energy or gas bonus.

New House / Farm Incentives

If your farm is still receiving New House Bonus Pay, enter details here.

Utilities

Enter current utility rates. You can choose between LP or NG, or compare across scenarios. Do not use both in the same scenario.

Labor

The labor section can be used to input direct labor expenses incurred by the farm, or for estimating owner’s management/labor cost – or both. If calculating paying owner salary, simply input the desired amount in the “Annual Hired Management” section. If you are paying both owner salary as well as hired management, simply add the two together.

Taxes & Other

Tax rates can be estimated by the user, or a more exact estimation can be achieved at https://extension.usu.edu/ruraltax/ and that number be input for the “Estimated Tax Rate” below. The expense escalation rate is simply the expected increase in expenses based on costs going up over time. This value only applies to expenses and thus does not replicate monetary inflation. Applying a higher escalation rate would decrease return but would better reflect potential cost spikes over time.

Insurance

The calculator automatically estimates insurance rates per SF based on house age and class based on previously gathered data and adds this as an annual expense. However, users may input their own annual insurance cost if desired and not use the calculator rates.