Marketing New England Ponltry 



6. Economies of Scale in Hatching and the 

 Cost of Distributing Broiler Chicks 



By 



Clark R. Burbee and Edwin T. BardwelP 



I. Introduction 



Numbers, sizes, and types of batcheries in New England bave been 

 undergoing major cbanges during tbe last two decades. Between 1941 

 and 1950, tbe number of firms increased 11 percent wbile total egg capa- 

 city increased 116 percent (table 1). Tbe average egg capacity of batcb- 

 eries doubled. Between 1950 and 1960, tbe number of batcberies de- 

 clined by 80 percent while egg capacity decreased only 5 percent. Tbe 

 average size of batcberies increased more tban four fold. Tbe reduction 

 in numbers was essentially confined to batcberies with less tban 200,000 

 egg capacity. 



During this period, a new type of hatchery organization appeared, 

 tbe large scale broiler chick hatchery affiliated with or owned and oper- 

 ated by processor-integrators. Processors require large and scheduled 

 quantities of specific broiler chick strains for their contract broiler pro- 

 ducing operations. In order to guarantee an uninterrupted supply, they 

 purchased or became affiliated with existing hatcheries or constructed 

 new facilities. 



The size and location of broiler producing areas in New England 

 have also changed drastically. Broiler processing has shifted from urban 

 to rural locations. Originally, New England was one large broiler pro- 

 ducing area, with broilers being transported as far as 100 to 150 miles 

 from farms to processing plants. Integrators intent on reducing their 

 transfer costs bave reduced their radius of contract broiler producing 

 operations down to 50 to 60 miles. 



1 Mr. Burbee is Agricultural Economist, Marketing Economics Division, Economic 

 Research Service, U.S.D.A., stationed at the University of New Hampshire. Mr. Bard- 

 well is Cooperative Agent, New Hampshire and Massachusetts Agricultural Experi- 

 ment Stations and Economic Research Service, U.S.D.A., stationed at the University 

 of New Hampshire. 



