Contract Livestock Production Opportunities in York County
4 Sep 2017
Are you a farmer interested in expanding your business or are you an entrepreneur considering entering the livestock production industry? If so, there are plenty of opportunities in York County. To highlight them, the York County Development Corporation, CVA, NE Department of Agriculture and AFan are working together to host a series of meetings and informational events.
York County Development Corporation hosted a meeting in April and another was held in June. These meetings were very productive, bringing people from all over the region to discuss opportunities for new barns in York and Seward counties. Presentations were made regarding Contract Livestock Production Opportunities and how people can invest in the industry today.
Benefits for Farmers
The world today is constantly changing and the ability to be nimble can be important for meeting new demands. Through these sessions farmers have been learning that contract production can help with diversification and make it possible to capitalize on market shifts, rather than being negatively impacted by them.
Some of the opportunities for contract production that were discussed are:
#1 Farmer-partner contracts.
This is where larger businesses contract with famers. Businesses pay farmers to use their land and care for the animals as if they were their own. This means taking care of vaccinations, manure management, and other aspects of day-to-day care. Meanwhile, the business pays for all expenses associated with that care including paying for feed and veterinarian services. If the animals need to be transported somewhere, the business will pay for this as well. Essentially, farmers have the autonomy to run their daily operations their way but without the risk that comes from being financially responsible for the cost of caring for the animals.
#2 Contracted land.
Farmers who are approaching retirement but still want an income, may consider contracts where businesses actually provide people to manage the barn and hire the incoming workforce. The farmers do not take care of the livestock on a daily basis but only handle manure management. For minimal effort, farmers are paid by the business for the use of their buildings and land. This is similar to a commercial lease, but allows farmers to remain on their property.
Through any of these methods, farmers can earn additional income for participating in contract livestock production. Farmers can often set the terms by negotiating with companies in need of these services. The benefit to farmers is a more diversified revenue stream that is less impacted by shifts in the marketplace, especially when the contracts are longer term.
Farmers can also experience an increase in their property value as businesses invest in barn improvements or even adding an additional barn. Improvements to the soil quality are also a byproduct of this system, in many cases.
Many farm families struggle to keep the youth at home and working on the farm. Sometimes this is due to limited revenue and the need for the next generation to seek employment elsewhere to support their own families. Adding the additional revenue brought in by contract production can allow them to remain on the family farm, ensuring that it can stay in the family for generations to come.
"Contract livestock production is an opportunity for younger farm family members to stay on the farm," said panelist Robert Turek, senior vice president of feed for Central Valley Ag Cooperative. "Increased livestock production is good for our communities too; it increases the tax base and improves grain prices. This is truly a win-win-win proposition."
To learn more about contract livestock production contact us at the York Development Corporation or watch this video.