What a poultry shed costs, and the contract behind it
Contract chicken growing is farming with a factory's economics: the processor supplies birds and feed, the grower supplies sheds and care, and the whole investment case lives in the gap between the shed cost and the growing fee. Both numbers are public. Here they are.
The shed cost
The growers' own council told the competition regulator that a new shed built to full processor requirements is now approaching $2 million, against a benchmark around $1.2 million plus land only a few years earlier. A typical shed runs 150 by 15 metres and carries about 40,000 birds; farms run three to ten sheds, and a new farm at today's standard scale of roughly 320,000 birds is therefore a $10 million-plus build before land. That is the honest scale of entry.
The growing economics
Growing fees run roughly 59 cents to a dollar per bird raised, about a dollar of the fourteen-dollar retail kilogram reaching the grower. Published single-shed returns of around $150,000 a year were built on the old shed cost; at today's build prices the payback stretches well past the eight to ten years the older guides quoted, and the growers' council itself calls current returns unsustainable, which is the negotiation behind every new contract. The investment case rises and falls on the contract term and fee, not the shed.
What that means for a buyer or builder
Match the finance term to the contract term, never longer. Buying an established farm with sheds already amortised, they trade to well past $20 million at the top end, prices the contract book against already-built infrastructure, which is often the better arithmetic than building new at current construction costs.
Financing poultry infrastructure
Sheds are fixed improvements financed against the farm property, at property-backed pricing of roughly 6% to 9% p.a. as a working rule, with the processor contract as the serviceability story. Equipment inside, feeding, ventilation, generators, writes separately on chattel mortgage. Property-backed borrowers generally price around 6% to 9% p.a. and non-property-backed deals around 9% to 13%, with approvals commonly back in 24 to 48 hours. Start at agricultural finance or the property-backed guide.
Frequently asked questions
How much does a poultry shed cost to build?
The growers' council puts a new processor-spec broiler shed at approaching $2 million, up from a $1.2 million benchmark a few years ago. A standard shed carries about 40,000 birds.
What do contract chicken growers earn?
Growing fees run roughly 59 cents to a dollar per bird. Published single-shed returns of around $150,000 a year were built on older shed costs, and paybacks stretch materially at current construction prices.
Is it better to build or buy a poultry farm?
At current build costs, buying established sheds with a contract in place often prices better than building new. Established farms trade to well past $20 million at scale.
How are poultry sheds financed?
As fixed improvements against the farm property, with the processor contract as the serviceability story and the finance term matched to the contract term, never longer.
Sheds, contracts and the real payback
Tell us the contract terms and the build quote and we will structure it honestly, usually within a day.
This article is general information only and not financial, credit, or tax advice. Ventas Asset Lending is a finance broker, not a lender. Approvals are subject to lender assessment. Consider your own circumstances and speak to a qualified professional, including your accountant for any tax questions.