time. One of these determinants, price of broilers, has been declining 

 historically. The potential drop in income from this price decline has 

 been counteracted by improved breeding and nutrition, adoption of 

 labor-saving equipment, and improved management. These changes in 

 efficiency have provided growers with a chance to maintain income and 

 the possibility of expanding capacity to increase income. 



The trend in expenditures by growers is an equally important determi- 

 nant of the stability of the broiler industry. Per capita disposable income 

 and income to industrial workers in northern New England have been in- 

 creasing and will no doubt continue to increase. This is an indication 

 that the standard of living is improving, a condition that broiler growers 

 also desire to attain. But this requires additional expenditures on the 

 part of the broiler grower which must come from increased income or 

 from income that would be used for capital accumulated out of present 

 income. 



Cash business expenditures are also increasing. Integrators are requir- 

 ing many improvements in the broiler production facilities which in- 

 crease maintenance, tax, and insurance expenditures. The rate of capital 

 accumulation must also be increased to recover the additional invest- 

 ment. This increase in cash expenses requires increased income if ex- 

 penditures for consumption are maintained. If income does not increase, 

 income for capital accumulation must be shifted to meet these increased 

 cash expenditures. 



The number of feasible alternatives open to growers to increase in- 

 come is rather limited. Some growers can increase capacity by adopting 

 existing technology that will increase economic efficiency, but only if the 

 integrator will utilize the added capacity. Other growers with available 

 time may increase their incomes by combining a part-time occupation 

 with producing broilers on a part-time basis. Another alternative is to 

 cease broiler production and produce market or hatching eggs. Also, the 

 grower can cease using the poultry production facilities and get full-time 

 work elsewhere. 



Figure 12 may be adapted to illustrate changes that take place in the 

 long run. The functions AB. HK, and XY can be shifted up or down in 

 relation to their location in Figure 12. Starting at position 1, the firm is 

 receiving sufficient income to cover all expenditures. With declining in- 

 come over the long-run, income would be only sufficient to cover cash ex- 

 penditures at position 2. But if eosts and consumption expenditures were 

 forced up, shifting the functions upward, the equalizing position between 

 income and cash expenditures would be reached between positions 1 and 

 2. This means that income for capital accumulation is shifted to other 

 expenditures and the capital accumulation potential disappears with de- 

 creasing income and constant or increasing expenditures. The ability of 

 the grower to reduce expenditures and maintain capital accumulation 

 with decreasing income is not realistic with present trends in costs and 



'6 



consumer behavior 



In the second case, income is assumed to remain stable and the firm's 

 income and expenditures are equalized at position 1. In the long run, the 

 functions AB, HK, and XY are most likely to be shifted upward with the 

 new equilibrium being established at position 4. The grower is forced to 

 shift income designated for capital accumulation to other expenditures. 



33 



