Summary and Conclusions 



The analysis in this study had essentially one ohjective: to appraise 

 the effect of various technical, institutional, and economic factors on the 

 long-run capital accumulation potential of contract hroiler growers in 

 northern New England. Capital accumulation potential is one of the pri- 

 mary factors in determining the future stahility of the hroiler industry. 

 As long as growers can accumulate sufficient capital to replace facilities 

 as they become useless for production, the industry will remain relative- 

 ly stable and possibly will expand. 



Technology in broiler production has improved a good deal over time. 

 Feed conversions are improving with the development of new feed form- 

 ulations and strains of broilers. Feed conversion is not a limitation in ex- 

 panding flock size, but integrators still have to work towards eliminating 

 seasonal variation and standardizing production units in terms of feed 

 conversion. For any one farm, the potential number of flocks of 3.5- 

 pound broilers per year is increasing. Output averaged 4.45 flocks in 1957 

 and it is estimated that output will reach 6.01 flocks in 1963. 



Integration has introduced several new institutional factors that affect 

 broiler producers. Integrators make all decisions concerning the variable 

 inputs as well as some that affect the growers' production facilities. This 

 has led to a conflict of interest which sometimes results in integrators re- 

 quiring growers to adopt improvements that reduce the integrators' costs 

 but may increase the growers' cost. 



Broiler production tends to be located within a 50-mile radius of pro- 

 cessing facilities as a result of integrators reducing the size of their areas. 

 This means that production probablv will continue to be in southern 

 Maine and New Hampshire and central Vermont, based on present pro- 

 cessing plant locations. 



Integrators have not been able to stabilize output on a seasonal basis. 

 Output is highest during the summer and lowest during the late fall. 

 Such variation means that only the most efficient growers may produce 

 throughout the year while others produce only part of the year. 



Historically, broiler prices have been declining and a further decline 

 is expected. This price decline has resulted in lower payments to growers, 

 although they have become more efficient economically. 



Integrators rely principally on a "price-efficiencv" contract for determ- 

 ining payments to growers. Growers are paid on the basis of the prevail- 

 ing price and their efficiency of production in relation to other growers 

 of the integrated operation. These contracts contain a stimulation on a 

 minimum payment equivalent to 0.5 cent per bird per week. The declin- 

 ing price has reduced average payments to 0.75 cent per bird per week, 

 but payments may get as high as 1.0 cent per bird per week. 



With existing technology, a family operation can manage and operate 

 a production unit of up to 35.000-broiler flock capacity. The present tech- 

 nology used during the brooding period acts as a restriction to larger ca- 

 pacity units for family operations. 



The contract grower has two large expenditure items out of income be- 

 fore capital is accumulated. Income must be expended to maintain some 



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