in fewer and larger hands in recent years. Inherent in this development 

 is the spread of vertical integration, including the selection and ex- 

 pansion of contract flocks. 



For any size of assembly firm there is a substantial cost advantage in 

 maintaining operations as close to capacity as possible. Figure 6 shows 



Figure 6. Pouhry Assembly Costs for 10 Model Plants Related to 

 Size of Firm and Use of Capacity* 



CENTS/POUND (LIVE BASIS) 



PERCENT OF CAPACITY 



* When poultry is obtained at rate of 500 pounds per mile of truck travel. 

 (The number on each curve indicates the capacity of the model firm in million 

 pounds of poultry annually.) 



23 



