switch to automatic feeding during the second phase. They would also 

 like to shift to automatic watering during the first phase. These two de- 

 velopments together would permit major increases in size of flock that 

 could he handled hy family units. 



Adoption of lahor-saving technology, and continued emphasis on 

 larger production units hy integrators, will lead to larger production 

 units in the future. The 35,000-hird unit of today will prohahly he re- 

 placed hy the 50,000-bird unit. 



CAPITAL REQUIREMENTS 



R. F. Saunders conducted a study of broiler growers in Maine in 1955. 

 He found an average investment of $1.20 per bird capacity. 17 The prac- 

 tice at that time was to allocate one square foot of house space per 

 broiler. The building required the greatest investment, averaging 96 cents 

 per square foot for new construction and 78 cents per square foot for re- 

 modeled barn?. Investment in equipment averaged 35 cents per square 

 foot. Thus, average investment ranged from $1.13 to $1.31 per square 

 foot 



Since 1955, investment per square foot has been increasing. The inte- 

 grators have reduced variable costs by having growers improve housing 

 and technology. Furthermore, growers want to substitute equipment for 

 labor in order to have more time for other purposes. These forces should 

 continue in the future, causing investment per square foot to increase 

 further. 



However, there is considerable variation among growers in amount of 

 investment. This variation is partly caused by the many alternatives the 

 grower has in deciding what types of equipment and quality of material 

 to use. Size of investment is also affected by whether the grower uses 

 family labor to build the house or hires the labor, and by the level of 

 technology and design selected. For purposes of this study, it was assum- 

 ed that a capital investment of $1.20 to $1.80 per square foot is required 

 at the present time. 



CONTRACT GROWER EXPENDITURES 



Under present arrangements between contract growers and integrators 

 in northern New England, the contract grower is responsible for the 

 fixed costs of broiler production while the integrator is responsible for 

 the variable costs. By definition, fixed costs are those expenses that do 

 not change with the volume of output. Variable costs are those costs 

 that do change with output. If the production unit remains idle for a 

 year, there are no variable costs, but there are fixed costs. 



Expenditures of contract growers can be classified as follows: (1) 

 family living allotment or consumption allowance, (2) taxes, (3) build- 

 ing and equipment insurance, (4) maintenance and repair, (5) depreci- 

 ation, (6) interest on the growers' own capital investment and (7) debt 

 retirement and interest on borrowed investment capital. These cost items 

 will be discussed individually below. 



17 Saunders, R. F., Contract Broiler Growing in Maine, Maine Agricultural Experi- 

 ment Station Bulletin 571, May 1958, p. 18. 



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