Two cooperatives maintained farm supply departments open to the gen- 

 eral public, while a number of additional units handled certain supplies 

 for their growers. One cooperative, whose primary business is feed milling 

 and distribution, and one large independent processor, producing feeds for 

 contract flocks and open market sale, accounted for the milling operations. 



The tendency of firms processing poultry to engage in additional related 

 business activity has been increasingly characteristic of the industry; so 

 much so in recent years that the concept of integration, primarily vertical, 

 is believed to be generally applicable. The extent of integration appears 

 to be a function of firm size, although precise knowledge regarding this re- 

 lationship is limited. 



Small plant integration is most likely to be oriented toward one of three 

 stages : 



1. Growing (producer-processors). 



2. Egg handling (retail-type outlets). 



3. Live poultry distribution (surpluses or city locations). 



Medium-sized plants may retain some small plant characteristics, i.e., 

 they may be jobbing eggs or distributing live poultry on a regular basis. 

 In addition, volume considerations may force them toward direct contract 

 growing or participation in a cooperative deal with a secondary contractor. 



If we ignore for the moment the producer-processor tie-in, where growing 

 is of major importance, and other fanning operations, then it is readily 

 apparent that large plants tend to be more highly integrated than other 

 size groups. This relates to the combination of assembling, processing, and 

 distributing poultry with extensive contract growing, experimental and 

 breeding operations, large-scale hatching, and large-scale handling of eggs, 

 feed, and supplies. 



Most small poultry slaughterers carry on slaughtering for sale as an ad- 

 junct to other activities. In contrast, larger plants regard the processing 

 function as primary and build other activities to contribute directly to it. 

 While diversification may be desirable for the smaller plant, a frequent 

 result is insufficient attention to efficient use of resources. 



Buying and Selling Practices 



Determining Prices 



Thirty-one of 42 plants (or 74 percent) reported use of the New York 

 commercial quotations*, along with customary differentials, as a basis for 

 determining buying and selling prices. However, nearly all plants visited 

 received, for market information purposes, both the commercial and USDA 

 Market News Reports. f 



Several small and medium-sized plants producing their own birds did 

 not determine into-plant values. Others relied on local market information. 

 For selling purposes, markups over product costs, local demand conditions 

 (especially on specialty items), and local market information were used 

 by these plants. 



The USDA reports an "at the plant" and "at the farm" figure for live 

 birds, by market classes, for a "75 mile area" outside Boston. 



* The Producers' Price-Current, a daily report of the Urner-Barry Company, 

 173 Chambers Street, New York City. 



t Daily Market Report, A. M.S., U.S.D.A., 408 Atlantic Avenue, Boston 10, Massa- 

 chusetts. 



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