Poultry Farms Bring Home Bacon

Mary Story has been stomping around Mena area poultry farms since she was a kid. She’s used to the typical stench emanating from chicken houses holding thousands of birds for nearly two months before a processor comes with trucks for them.

But for Story, that stink is giving way to a far sweeter aroma — the smell of money.

“I come from a poultry background; my parents had chicken houses,” Story said. “I got into real estate in 1983 and sold my first poultry farm the next year. I was the only real estate agent [in the area] interested in selling poultry farms.

“All the other agents were like, ‘Poultry farms? Yuck.'”

While Mena’s residential real estate market may not have been boiling hot in recent years, Story has built a profitable niche real estate brokerage around Arkansas’ multibillion-dollar poultry business — thanks in part to growing interest in the industry by Hmong immigrants.

“Sometimes it’s fun, sometime it’s a challenge,” Story said. “It’s certainly not glamorous, and it’s time consuming, and you have to be patient with the owners and buyers. The general thing is that people who look are really buyers — so there really aren’t a lot of lookers.

“[But] other real estate agents think I’m crazy.”

The Mary Story Group, with offices on the west end of Mena, handles poultry farm listings in Oklahoma and Missouri as well.

The U.S. Department of Agriculture ranked Arkansas for 2002 data among the top 10 of all of its poultry production categories. The state ranked No. 2, No. 8, No. 4 and No. 3, respectively, for commercial broilers, eggs, farm chickens sold and turkeys raised. Chickens, turkeys and eggs worth $2.34 billion were produced in the state that year.

Story has been listing, selling and brokering deals for large and small poultry farms across the state since the mid-1980s and is the only real estate firm in the state that deals exclusively in poultry farms.

But it’s more than a mere business for Story. Her daughters work as sales agents for the company, and there’s some son-in-law assistance in cruising the tri-state area in search of potential farm listings.

“It’s a strange little business,” joked Story, who hasn’t sold a “people house” in years. “[But] we’re not just specialized, it’s our whole life. We try to keep on the lookout for the latest technology, new types of chicken houses.

“It takes a constant effort to keep up with poultry business, so you know what you’re talking about.”

Hmong

Bruce Tencleve, poultry division coordinator for the Arkansas Farm Bureau, said the state has about 16,000 poultry houses spread across 6,000 farms.

“There is always some farm for sale,” Tencleve said. “People want out, they’re moving or they don’t like it anymore.”

And there are always people wanting into the business. Buyers come from a variety of backgrounds — current farmers looking to expand existing operations, retirees looking for a new life, people sick of big cities and working under oppressive bosses.

“Lots of people [who buy farms] work in companies in the corporate world,” Story said. “I know it sounds crazy, but they want to get out and start their own business, be their own boss and live a simpler life. We just had two people leave SBC [Communications Inc.] with an early retirement, and they bought a poultry farm so they could live a simpler life.”

A growing number of Story’s buyers are coming from Hmong communities around the country. Many of the Hmong left Laos in the 1970s and 1980s and settled in many areas of the United States.

According to Vue Moua, 42, and his wife, Houa Moua, 32, a former nurse, the Hmong are a fast-growing presence in Arkansas poultry farming.

“I’m guessing there are 200 Hmong-owned farms in Arkansas,” said Houa Moua. “There might be some more in Oklahoma and Missouri. This is where most of the poultry industry happens. And, as a people, the Hmong are moving near people they are related to and would like to live closer to.”

The Mouas arrived in Wisconsin from Laos in 1981, before moving to Lacrosse, Wis., and then Owatonna, Minn. They came to Magazine, near Booneville, two years ago and bought a $565,000, four-house fryer farm.

A farm-owning friend of her husband had invited them down for a visit, and they fell in love with Arkansas.

“The country is beautiful, and the weather is good,” said Houa Moua. “So we decided to move down and start a poultry farm.”

The Mouas had worked on farms in Laos with little technology — farm work could often involve simply their hands.

“The poultry industry [here] is totally different,” said Houa Moua. “Mary [Story] did everything for us. She prepared the paperwork and helped with the bank. It would’ve been very hard to do by ourselves.”

While hesitant to be specific, Houa Moua said they’re “doing OK financially.”

“If you have a good farm, new houses, you can make money out of it,” Houa Moua said. “If you get older [chicken] houses or pay too high a price, you won’t make your cash flow.”

She gets to stay on their farm home with their three daughters, while Vue Moua gets to be his own boss. Automation allows for work days of a few hours, depending on conditions.

“We enjoy it. It’s his job and he wanted to work hard, but not under someone,” Houa Moua said. “That’s what makes him happy. He can decide what he wants to do. He can get up early and go out to the houses or wait until the afternoon.”

Poultry farming is also something that can involve the whole family.

“When the first baby chicks are here, the (girls) come after school to check on them — it’s a family thing,” Houa Moua said. “What I like most of all is that everyone can participate. Everybody is home, mom and dad and the children.”

Story said the rising move of Hmong to Arkansas is to fulfill the same dreams as anyone.

The state reminds them of their home back in Laos, and they want out of the cities, away from gangs. Plus they don’t want to work two jobs anymore, Story said.

Poultry Brokering

Story said the market for chicken farming operations is hotter than ever. In 2003, Story and family sold as many as 50 poultry farms.

Story and her daughters wouldn’t reveal annual sales volume or many details on transactions. But, as farms have grown in size over the years, prices are pushing past the $2 million line for bigger operations and even the low-end farms run $300,000. And commissions run somewhat higher than the typical 6 percent paid for residential real estate sales.

At her desk Story keeps an inch-thick file of e-mail printouts from interested buyers. They come from all over the country — Florida, California, Minnesota, New York and elsewhere.

“There are a lack of poultry farms,” Story said. “The hardest part of the business is finding poultry farms for sale for buyers.”

Story advertises farm listings on Web sites including www.marystory.com, www.arkansaspoultryfarms.com, www.missouripoultryfarms.com and www.oklahomapoultryfarms.com.

The Web sites currently feature a dozen listings, all in Arkansas, and don’t list prices. They do list some key data, such as acreage, expected income and whether the farms have existing contracts with any of the large integrator companies that buy poultry, such as Tyson Foods Inc. of Springdale.

Locations range from a single breeder house operation in Fouke that generates an estimated annual income of $62,000, to a 14-house broiler operation east of Fayetteville that includes a three-bedroom mobile home and an existing contract with George’s Inc. of Springdale, to a 120-acre, eight-house turkey farm that has an existing contract with ConAgra-Butterball. A 10-house operation can generate $400,000 in income.

“The Internet made a big difference,” Story said. “We had to advertise [at first in newspapers] and didn’t get too many customers from out of town who were upscale [and] who had the money for a down payment.”

Although some owners want to sell because their farms are old or have cash-flow problems, other owners are just tired of the business. Finding farms to list is one of the most labor-intensive parts of Story’s business.

The family and employees endlessly navigate the back roads of the three states they cover. They meet prospective buyers at restaurants and hotels around the tri-state area.

“One week I put 3,500 miles on my truck,” said Story’s son-in-law, Shane Deramus.

They approach farm owners to pique their interest in selling and see if they can get the listing. It’s frequently a stubborn response.

“We get a lot of nos, but a yes is worth it because we have so many buyers,” Story said. “If it’s a good farm and the price is right, all the nos are worth the one yes.”

The agency has received significant interest from across the country to handle listings, but due to distance and licensing issues, Story currently plans to expand only into Southern states no more than a single-day drive from Mena.

Story Group agents introduce potential buyers to banks that deal in agriculture loans, go over state and federal regulations for poultry farms, handle far more paperwork, go over income and cash flow issues, and sometimes even introduce new owners to the poultry integrators.

It takes about four months to close a poultry farm deal, Story said.

“They would be lost on their own,” Story said. “They wouldn’t have the slightest idea … they wouldn’t know where to start. It would be like buying a house and trying to do the mortgage on their own, except this is a lot more complicated.”

Contracts to sell the birds that are raised on the farm are also vital to closing the deals.

“Without an integrator,” Story said, “a poultry farm is nothing.”

Story, with a poultry background dating back to childhood, maneuvers first-time owners through the process. “She can make things happen that you wouldn’t believe,” said Cindy Deramus, one of Story’s daughters.

One of the things Story can do with a developer is build farms for buyers who can’t find exactly what they want or need on the open market.

But new farms can be a little dicey.

“We tell developers we need 10-house farms, but you can only build them if there are contracts available with integrators,” Story said. “Contracts usually go to existing (farmers). There are limits to the number of contracts, and integrators usually give existing farmers the [first] opportunity at contracts.

“Integrators want to make sure existing farmers make it.”

Such a “managed growth” policy discourages overbuilding, which could conceivably drive down prices and profits for all farmers, Story said.

Automation technology also has led to larger farms with fewer used for supplemental income for families. Computers manage and monitor controlled-environment poultry farms’ temperatures and feeding and watering cycles.

Farmers can keep an eye on operations, and pagers can send alerts when things go awry, but regular in-person trips to chicken houses are still necessary.

“Now, we’re seeing more six-, eight- and 10-house farms,” said the Farm Bureau’s Tencleve. “You used to be able to drive around and see all kinds of small family farms. It makes for a more hands-off operation, but you can cover more area.

“You still have to walk the houses and pick up the occasional (dead) bird. Automation helps, but you have to pay for it too.”

Whereas 20 years ago, a low-tech farm might cost about $100,000 to build — at $50,000 per chicken house — newer eight-house farms can run more than $1 million, and a lone 500-foot by 40-foot fully automated chicken house can cost $150,000.

There’s a rough balance in the efficiencies automation creates for larger operations, although sheer size can mean more work hours depending on conditions.

“But,” Tencleve said, “you’re (also) talking a lot more serious cash.”

Now, automation is nearly demanded by the industry to ensure consistency among birds.

“If they let you be hands-on, you can still be productive,” Tencleve said. “(But) they want the same five-pound bird from all the farms.”