For the Renkema Family, Broiler Breeders were the Financially Rational Way to Allow Their Sons to Farm
For Ralph Renkema and his family the decision as to which branch of agriculture to expand into came down to a series of numbers: 15, 35 and 99.
Renkema, a well-established dairy producer, knew that his sons wanted to stay in agriculture. One wanted to go into dairy and the other poultry. He also recognized that financial reality would call the tune.
“We looked at all kinds of options,” he said.
Renkema said he had three accountants and a lawyer working for six months to fight through the blizzard of paper, and he had a Farm Credit Canada (FCC) account manager run the numbers.
That is where the 15, 35 and 99 came in.
Renkema discovered that the payback period for setting up a new, full-time broiler farm was 99 years. The payback on a new, stand-alone dairy operation was 35 years and the payback on a broiler breeder farm was 15 years.
None of the options was cheap, but the broiler breeder operation made economic sense.
“A year ago I didn’t know what a broiler breeder was,” he said. But after looking at the finances, he decided he had to learn.
After running through the numbers, talking to other producers and discussing it with the family, the decision – and it was a business decision – was made.
“Getting into agriculture for young people is tough,” he said. “But my wife Shirley and I decided we’d try to make this work.”
One of the things he and his wife recognized early on is that their sons could never pay – and he and his wife could never get – full value for the dairy farm if they tried to pass it along to the next generation.
So they had to try and find a way to help them get into farming, and the broiler breeder option was the best way to go.
Only in his mid-forties, Renkema said he likes working his 70-cow dairy farm and is too young to retire. So, he will continue to operate the dairy farm and son Brian will take over the day-to-day running of the broiler breeder farm.
Both farms are incorporated and are separate corporate entities. Renkema said keeping the two farms separate is the best way to go for the family and as a business decision.
However, to get the new farm off the ground the dairy had to provide capital to the broiler breeder farm and will likely subsidize it until it is firmly established.
To get to the point where a new farm could be financed required determination. Renkema said the family made a vigorous assault on paying down debt.
“If families want to stay in farming the parents have to have debt under control,” he said.
By getting and keeping debt under control the family had the flexibility to plan for the future. If debt wasn’t under control, you’d have to run pretty hard just to keep up to the present, he said.
“My dad gave me a chance to farm and I wanted to do the same for my family,” he said.
Once the financial decision to go into broiler breeders was made, Renkema and his sons started talking to current producers and visiting their operations. “We had to find out what worked and what didn’t,” he said.
They had to determine how their barn should be built, what features it needed and what equipment was working for others.
“I didn’t spend any time with salesmen because you know what you’ll hear from them,” he said.
After talking and listening to more than 20 producers, the Renkemas determined that they knew what they wanted and needed.
The barn is 80 feet by 256 feet in two sections with 5,000 hens on each side. It uses the Jansen nesting system and the eggs go straight through to the collector.
To ensure that the hens have easy access to the nests, the slats are just three to four inches above the barn floor.
Chris Bill of Meller Poultry Equipment said digging the trenches under the slats wasn’t cheap, but it will make the cages more inviting to the hens. This is particularly important for the older hens, because they won’t have to jump to get up on the slats, he said. The result is fewer floor eggs and higher production.
The Jansen nests are very popular with producers because they do the job, he said. The nests have astro-turf mats for floors that are literally a snap to remove for a thorough cleaning.
For the feeders, drinkers, fans and other equipment, Renkema turned to Glass-Pac-Canada K.G. Johnson Inc., in St. Jacob’s, Ontario. Stu Weber of Glass-Pac said the male feeders are round pans with oval KiXoo™ feeders for the females. The drinkers are nipple drinkers from Lubing. The barn uses a cross-tunnel ventilation system.
Renkema said the barn is similar but not identical to other barns out there. He said on his visits he noted the features of various operations, and incorporated these features into the new barn.
Weber said that the key in the broiler breeder industry these days is efficiency, and that efficiency comes from good management. Producers are looking for and getting more eggs per hen and higher hatchability from the eggs that are produced.
“The goal is producing more chicks,” he said.
The Renkema family recognizes the challenge, but they are comfortable with their decision. Their goal was to allow the family to continue in farming and broiler breeders have given them a financially responsible and achievable way to do that.
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