BLOOMINGTON, Ill. — The Illinois livestock industry is on pace to eclipse the state record for “notices of intent” to construct new or expanded livestock housing facilities. The previous record was 142 notices in 2007, but that mark is likely to be shattered before the end of 2014, according to Nic Anderson, Illinois Livestock Development Group (ILDG) business developer.

“There is a real opportunity in livestock in Illinois right now. The corn crop is expected to be huge, prices are low, and margins are good,” Anderson said. “The best margin exists for poultry growth simply because the building costs for hogs and cattle have escalated.”

There are currently about 10 new turkey finishing facilities going up in Illinois, Anderson said during a recent phone interview. In addition, major turkey processor Farbest Foods, which produces turkey products for brands such as Boar’s Head at three Indiana plants, has recently begun contracting turkeys from eastern Illinois farms.

Those recent market indicators support the growth in poultry inventory and sales – especially turkey and chicken – in Illinois between 2007 and 2012, according to 2012 Census of Agriculture state data. The data show that 440 Illinois farms held turkey inventories during 2012, up from 362 in 2007, while 3,725 farms inventoried laying hens, up from 2,801 five years earlier.

“Since (the 2012 Ag Census), those numbers have grown some more,” said Anderson, who advises and assists farmers in developing growth strategies for their livestock and poultry operations. “It has to do with (low) input costs for corn and soybean meal and transportation costs. Most Midwestern states are seeing similar or better increases in those sectors, and it’s very evident in Illinois on the turkey side of things.”

Midwest poultry production has been ramping up for several years in the wake of California’s controversial Proposition 2, which set strict guidelines for animal confinement and caused an exodus of poultry inventory from the Golden State when it was rolled out earlier this year. 

“California has been limited in poultry growth due to their production practices, and other states are picking up those numbers,” Anderson said.

Contributing mightily to the “perfect storm” of favorable conditions for livestock and poultry growth in the Midwest is the plummeting price of corn, which sold for $6.50 per bushel as recently as 2011 but today (Sept. 26) fetches just $3.26. “Illinois and the Midwest is in pretty good shape right now with all of this crop at our door, and without huge transportation costs, that alone is reason enough to look at the Midwest and Illinois (for poultry and livestock expansion),” Anderson said.

Dramatic increases in construction costs for cattle and swine confinement facilities compared with poultry building costs are another factor farmers are considering when deciding where to expand their operations. Though raw material costs are up across the board, adaptation of new technologies in swine and cattle confinement buildings have pushed total per-head construction costs higher than costs for poultry finishing structures.

The ILDG developer noted those interested in establishing Illinois livestock facilities should act soon to take advantage of market conditions. 

“There’s still money to be made. There should not be an empty barn in Illinois,” Anderson said. “Any Midwestern state that’s in the grain business has the upper hand right now.”

The recent livestock and poultry growth in Illinois and the Corn Belt has come at the expense of traditional livestock and poultry states such as Texas and California. Overall, U.S. inventory for livestock and poultry are down.

“We are not increasing overall animal numbers in the U.S., rather moving them to more efficient areas of production. So even though we see growth in Illinois, our national numbers are not growing at that rate. In fact, we’re at the lowest level for a U.S. cow herd in 50 years,” Anderson noted. “It’s going to be a long time before we can begin to replace those numbers, but we’re moving back to a more cost-efficient system that can utilize the input side with corn and soybeans and can utilize the resultant nutrients, such as manure, back on our crop ground.”

Challenges in establishing livestock and poultry production and finishing facilities in Illinois include getting through the Livestock Management Facilities Act process and meeting construction deadlines. As of August, the Illinois Department of Agriculture had received 110 notices of intent to construct or expand livestock facilities in the state, representing 60,000 animal unit spaces and $42 million in investment in Illinois, according to the ILDG.