housing - jim donald, manhaten, june 2006
TRANSCRIPT
ROTEM DEALER UPDATE ON HOUSING
Jim DonaldAuburn University,
AL
What Are We Trying To Accomplish?
Best Environment - Day 1 To Catch Temperature, Equivalent
Temperature, Air Quality, Litter Quality, & Light
Using Least Amount Of Fuel, Electricity, & Water Possible Without Sacrificing Performance
Once Birds Are In The House, Heating System, Ventilation Mode, & Cool Cells Are Primary Tools For Managing The Environment
Broiler Performance Components: Integrator
Chick Quality – Providing The Genetic Package Feed - Ingredients/Milling/Ration Formulation Transportation (Chick Delivery & Live Haul) Health Programs - Chick/Feed/Farm Health Program - Surveillance & Diagnostics Ensure Growout Program Implementation Promote Operational Consistency In Growout Provide Housing Standards With Incentives
Broiler Performance Components: Grower
Environmental Protection – Rearing Facility (House)
Climatized Air (Temp - TNZ /Quality/ Uniformity) Litter (Quality/Quantity) Feed & Water Distribution Avoid Binge Feeding Limit Causes Of Infectious Disease Limit Stress Minimize Body Maintenance Maximize Growth
AgriStatsCategory 2000 2005 Change
Days To 5.0 Lbs. 45.141.8-3.3Avg. Weight 5.165.71+0.55Avg. Live Cost 22.76 24.85 +2.09Grower Pay 4.785.24+0.46
“There Are Lies, Damn Lies, And Then There Are Statistics” --Will Rogers
HOUSE CONSTRUCTION: PROBLEMS CASH FLOW HOUSE SIZES /
STRUCTURE INSURANCE ELECTRICAL
CASH FLOW LARGER HOUSES INCREASED MATERIAL COST INCREASED BUILDING
COSTS NEW HOUSES ARE
CHALLENGE TO CASH FLOW FIX BY CUTTING CORNERS
IN CONSTRUCTION
Example: 40 X 500 Assumptions
4 Houses – 80,000 Ft2, 5#, 6 Flocks/Yr, 96% Livabil.
$1.15 Gas, $0.075/kwh, $.05/# Base Pay, 6.75% Int.
No Hired Labor, 0.77 Ft2/Chick Total Initial Investment = $680,000 /Ft2) Farm Credit (1st) Mortgage = $578,000 (85%) Other (2nd) Mortgage = $102,000 (15%) 1st Mortgage Assignment/Yr= $58,620 2nd Mortgage Out Of Settlements=$10,345
Costs & Returns – 40 X 500
Gross Receipts-2,992,369# @ .05 = $149,618Variable Costs (Out-Of-Pocket) = $ 57,413Fixed Costs (Morts.+ Ins.) = $ 74,912Total Costs = $132,324Net RetUrns = $ 17,294Return on Investment = 2.543%
*Excludes “Fuel Allowance”
Cash Flow Squeeze - Solutions?
1. Do Nothing?2. Increase Base Pay To Grower?
(Ex: ½ Cent Increases Net Returns By ~$15,000 On 80,000 Ft2 Farm)
3. Company Provides Part Of Initial Investment? (Pullet House Model)
(15% Of Investment Cost Increases Net Returns By ~$15,000) (@ 6% Interest)
4. Differential Pay Rates For New Houses?5. Relocation – Leave U.S.?6. Others?
INSURANCE SUFFER $3/1 LOSSES IN PAST
ON POULTRY HOUSES PREVIOUSLY WERE NOT VERY
INVOLVED GET OUT OR GET SERIOUS TOTALLY ENGINEERED SPECS. HOUSE INSPECTIONS
HOUSE CONSTRUCTION: OPPORTUNITIES LARGER HOUSES FOR
CASH FLOW MORE HOUSES IMPROVED STRUCTURAL
STANDARDS INSURABILITY AND
BANKING IMPROVED ELECTRICAL
STANDARDS
Example: 54 X 500 Assumptions
3 Houses – 81,000 Ft2, 5#, 6 Flocks/Yr, 96% Livabil.
$1.15 Gas, $0.075/kwh, $.05/# Base Pay, 6.75% Int.
No Hired Labor, 0.77 Ft2/Chick Total Initial Investment = $664,000
($8.20/Ft2) Farm Credit (1st) Mortgage = $564,570
(85%) Other (2nd) Mortgage = $99,630 (15%) 1st Mortgage Assignment/Yr= $57,260 2nd Mortgage Out Of Settlements=$10,105
Costs & Returns – 54 X 500
Gross Receipts-3,029,696# @ .05 = $151,485Variable Costs (Out-Of Pocket) = $ 54,575Fixed Costs (Morts. + Ins.) = $ 73,382Total Costs = $127,957Net Returns = $ 23,528Return on Investment = 3.543%
*Excludes “Fuel Allowance”
ELECTRICAL WORK DONE BY
QUALIFIED ELECTRICIAN COMMERCIAL EQUIPMENT SUFFICIENT SIZE
COMPONENTS BACKUP GENERATORS WIRED BY CODES MUST WORK AS A
“SYSTEM”
ELECTRICAL “SYSTEM”
ENERGY CRUNCH & FUEL FLUCTUATIONS
DETRIMENTAL TO GROWER INCOME
INCREASING ON YEARLY BASIS
HELD HOSTIGE BY PROPANE & NAT. GAS
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
'92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05
Propane Electric
Per House Energy Costs24 Class A Houses – N. AL(Small Birds -7.2 Flocks/Year)(-$43K Farm Income–’05/06)(-$94K Over 3 Years) $3,700
$5,800
$7,600
Per House Water & Litter Costs – N. AL
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
1992 1994 1996 1998 2000 2002 2004
Water Litter
(24 House Average)
Full Cleanout + Acid Pad Treatment
Added Cooling Pads
New Well
Poultry Energy Use Greatest Cost Facing Growers -
Energy Nearly 100,000 US Broiler Houses Electricity - Requires 20,000-35,000
kwh Per Year Per House Electricity Rates - Highly Regulated
& Relatively Stable Predictable Electricity Cost Ranges From $1,500
to $2,500 -- Average of ~ $2,000/House/Yr.
The Problem Is Propane
Poultry Production Is Propane Intensive Each House Uses 200-700 Mil. BTU/Year Middle East - Conflicts & Uncertainty Gulf Coast Storms Disrupt Prod. & Dist. Asia – 8-10% Annual Industrial Growth Hard Winter Up North Spurs Demand Propane Follows Crude Oil Price – OPEC Crude $70; Last Year $40; 2 Yrs Ago
$25
Propane Cost - 8 Houses - S. AL (Big Birds - 5 Flocks/Year)
2002-03 30,000 gals @ $0.55 = $16,500
2003-04 30,000 gals @ $0.80 = $24,000
2004-05 30,000 gals @ $1.02 = $30,600
2005-06 30,000 gals @ $1.19 = $35,700
Change = $19,200 Less Net Farm Income
Net Effect Of Propane Price Increase Of 40 Cents/Gallon
Added Costs ~$1,600/House/Year Big Birds Added Costs ~$2,400/House/Year Small
Birds Average Reduction In Net Farm Income =
~ $2,000/House/Year(~$25 Million In Alabama)
(~$150 Million In SE U.S.)
RETROFITTING NEW EQUIPMENT CONTROLLERS TUNNELING 6” COOLING SYS. HP FANS MINIMUM
VENTILATION SYS. = VENTS
SOLID WALLING REMOVING
CURTAINS ADDING
INSULATION INCREASING R-
VALUE INCREASING HOUSE
TIGHTNESS SEVERAL CHOICES
SPRAY FOAM QUICK WAY TO
SOLID WALL INSULATE TIGHTEN HOUSE SHORT TERM
BAND-AID
Annual Gas Savings @ $1.40/Gal
Per House Gas Use Gas Cost SavingsBefore 5,000 gal $7,000 ---After 2,247 gal $3,146 $3,854
$0.00
$1,000.00
$2,000.00
$3,000.00
$4,000.00
$5,000.00
$6,000.00
$7,000.00
Before After
HOUSE TIGHTNESS SOLID WALLING INCREASING SP IMPROVED
NEGATIVE VENTILATION
INCREASED MANAGABILITY OF AIR & TEMP. CONTROL
Vapor Barrier On Interior Before Plywood Is Nailed Up
EXTERNAL HOUSE WRAP
VALUE OF INSULATION BECOMING MORE
IMPORTANT GROWER PAY
AFFECTED ENVIRONMENT
AFFECTED BIRDS AFFECTED GOOD INSULATION =
HIGH EFFICIENCY
Fiberglass Batt Sidewalls
Blown Cellulose Sidewalls
BETTER CONTROLLER USAGE GARBAGE IN =
GARBAGE OUT EDUCATE USERS DEVELOP
STANDARDS ADJUST
PROGRAMS
ALTERNATE FUEL UPDATE
LOTS OF INTEREST PRODUCTS DELIVERY VENTILATION RESIDUAL EFFECTS
OR BYPRODUCTS
ENERGY CHARACTERISTICS
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
Cost of Fuel Required to Produce 1 Million BTU's
Coal Litter Waste Oil Shelled Corn HardwoodWood Pellets Propane Fuel Oil Natural Gas Electricity
USED OIL GOOD
ALTERNATIVE FOR BTU’S
AVAILABILITY PRICE INCREASE TRANSPORTING
AND STORAGE ISSUES
#5 Waste Oil Example
In-House Collapsible Nylon Duct
Outside Furnace And Oil Tank
Duct Delivery Air Pattern
•Smoke Pattern Shows Excellent Air Mixing •Uniform Temp Side To Side & End To End
Floor To Ceiling Temp Difference 2-3 Degrees
PELCO BOILER VERSATILE
FUELS BTU RATING IS
HIGH HEAT WATER PLUMBING STORAGE &
DELIVERY RUNNING TESTS
Alternative Energy Furnaces
Corn Litter & Coal
Coal & Ground Tires
Many Recipes
Low EmissionsLow Smoke
OpacityFlow/Augering Issues
SHORT TERM ANSWER INSULATE WALLS TIGHTEN UP HOUSES MAKE HOUSE MORE
EFFICIENT THERE IS NO “QUICK
FIX” SOLUTION
SPRAY FOAM INSULATION
Fairly New - R-7/Inch Of Thickness Dries Solid, Waterproof & Fireproof Seals & Insulates & Serves As Vapor
Barrier Extend Productive Life Of Older Houses Spray 1-1.5” On Walls, Touch-Up
Ridges, Dog House Ceilings, & Cracks Must Control Darkling Beetles
0.12-.13 SP Before 0.26-.27 SP After
Spray Foam Test – 12 House Farm
Per House Test Results
11/05-5/06 - 4 Flocks (Avg. of 7 Flocks/Yr) Livability Improvement = 1.18% FC Improvement = .0559 [1.8304 -1.8863] Avg Wt Increase = 0.24 [3.84 v 3.60] (~2
Days) ADG Increase = .0043 [0.0976 v 0.0933] Avg Live Cost Decrease = .0090 [.2281
v .2371] Reduced Energy Cost = $665 Production Increase Value (@$.05)= $1,188 Improved Profitability = $1,853* Better Ranking & Settlement
LIGHTNING PROTECTION & GROUNDING HUNDREDS TO
CHOOSE FROM RELIABILITY LOW COST GOOD SERVICE KNOWLEDGE OF
POULTRY ELECTRICAL
LOCATIONS OF LIGHTNING & SURGE PROTECTION x
DIRECT AND INDIRECT TRANSFER OF ENERGY
INDUCED TRANSFER
BROKEN OR NO CLAMP
WHAT IS A GROUND LOOP?-HOW TO PREVENT THEM
A GROUND LOOP IS CAUSED BY A VOLTAGE DIFFERENCE BETWEEN TWO OR MORE GROUNDING POINTS.
GROUND LOOPS ARE CAUSED BY LIGHTNING IN COMBINATION WITH BAD FARM WIRING AND GROUNDING
BACK DOOR DAMAGE
GROUND POTENTIAL SURGE CREATE TRANSIENT OR GROUND LOOPS
LIGHTNING-CREATES BIG DIFFERENCE IN POTENTIAL
IF WE HAD NO NETWORKS WOULD GROUND LOOPS BE A PROBLEM
SINGLE POINT GROUNDING
MULTIPLE GROUND RODS
ALL TIE TO CENTRAL LOCATION
LOOKING FOR EQUILIBRIUM & CONTINUITY!!
4-WIRE SERVICES x
UFER GROUNDS LOW RESISTANCE
ADDITION TO POOR GROUNDING
EFFECTIVE IN BRINGING OHMS TO BELOW 25
5/8” REBAR x 20’ SURROUNDED BY 2” CONCRETE & 12 BELOW GRADE
OUR PROGRAM
JIM DONALD 228 CORLEY BLDG.
AUBURN UNIV., AL 36849 [email protected]
JESS CAMPBELL 215 CORLEY BLDG.
AUBURN UNIV., AL 36849 [email protected]
EDUCATE = POULTRY INDUSTRY
EDUCATIONAL MATERIALS
QUESTIONS?