concerning how long he wants to he in the hroiler business. He wants to 

 recover his investment before this period ends. 



Historically, many factors have influenced the competitive position of 

 broiler growers in the several commercial broiler regions of the United 

 States. These changing conditions influence both prices paid and prices 

 received and introduce uncertainty and risk for the individual grower. 

 This dynamic condition is expected to continue. Therefore, it is desir- 

 able to consider the time required for growers to accumulate capital 

 under various sets of conditions. For purposes of this study, time to ac- 

 cumulate the various sums is expressed to the nearest year from 1 to 34 

 years and to the nearest fifth year from 35 to 100 years. 



Derivation of Net Income 



Annual net income for the four models are based on the previously 

 described coefficients. First, total annual revenues are determined for 

 each model by using all assumed combinations of house occupancy time 

 and returns per bird per week. Total revenues are shown in Table 5» 

 Second, all combinations of family and business expenditures are de- 

 ducted from the total revenue, leaving a net for capital accumulation or 

 a deficit. Each model has 36 such combinations. Table 6 shows annual 

 net revenues or deficits. 



ACCUMULATION POTENTIALS AND TIME REQUIRED FOR THE MODELS 



Model A 



As a full-time operation, this model has no accumulation potential ex- 

 cept in one situation. With payments at a maximum, house occupancy 

 time at a maximum, and expenditures at the lowest levels, this model can 

 accumulate 50 cents per square foot in 18 years. It appears that this ca- 

 pacity unit will not be replaced in the future except on the basis of be- 

 ing used to supplement another source of income. However, integrators 

 do not particularly desire part-time growers or units of this capacity. 



Model B 



Table 7 shows the time periods required to accumulate the selected 

 sums of capital. With payments at the lowest level, this unit does not 

 have an accumulation potential. With payments at 0.75 cent per bird per 

 week, this unit has to maximize house occupancy time and minimize ex- 

 penditures to accumulate between $1.50 and $2.00 a square foot within a 

 30-year period. Higher expenditures decrease the amounts of capital that 

 are accumulated to $0.50 to $1.00, and this requires 20 to 25 years. Pay- 

 ments at the highest level allow capital accumulation of $3.00 per square 

 foot in 35 years with expenditures and occupancy time maximized. When 

 occupancy time is reduced to 35 weeks per year, $1.50 to $2.50 per square 

 foot is accumulated in a 15 to 45 year period, but expenditures have to be 

 maintained at lower levels. 



Replacement of this capacity unit appears doubtful unless growers can 

 supplement income from broilers with income from a part-time occupa- 

 tion. Integrators have not displayed any objection to this size unit, but 

 prefer growers on a full-time basis. There are not enough situations 

 which permit the accumulation of capital to replace this unit based on 

 new construction cost estimates. 



37 



