growing, and/or handling feed and supplies. Contract growing may he 

 carried out directly by processors or by secondary contractors under work- 

 ing arrangements. 



The movement of processing toward the country, and the accompanying 

 de-emphasis on the long-distance movement of live poultry, have resulted 

 in excess plant capacity in or near major markets. Many units, particularly 

 in the very small, small, and medium-sized groups, and plants specializing in 

 fowl, still experience considerable seasonal variations in volume. In com- 

 mercial areas, where volume is concentrated in relatively few hands, over- 

 capacity occurs as an element of monopolistic competition.* 



Smaller processing units tend to concentrate buying and selling activities 

 within a smaller radius from the processing plant, with larger units reach- 

 ing farther for the residual share of supplies and serving more distant 

 markets. Smaller processing units are also likely to deal with smaller pro- 

 ducing and purchasing units, suggesting in the latter instances a substantial 

 degree of retail distributing. 



With the types of processing equipment currently available, mosi: smaller 

 units operate without overhead conveyor lines. When this occurs, a series 

 of hand operations is required in scalding, picking, etc. Larger units, whose 

 volume justifies overhead lines and automatic equipment, are able to elimi- 

 nate much hand labor. 



Substitution of equipment for labor will increase the output per man 

 hour as plant size increases. Because of less variation in volume, larger 

 plants can readily operate at a higher percentage of theoretical capacity. 

 This may appear as a rather sharp rate of increase in part because smaller 

 operators may elect to devote a share of given resources to assembling and 

 retail distribution if they maximize total returns. 



Table 2 summarizes some of the salient features of poultry slaughtering 

 plants of various sizes contacted by field survey in 24 New England coun- 

 ties. Details related to many of these points are presented in subsequent pages. 



Available Supplies and the Volume of Slaughter in Sample Areas 



The volume of chicken? a\ailable for slaughter in the sample areas in 

 1955 was about 74 percent of the New England total. Slaughter by units 

 contacted was about 70 percent of New England production. Data on chickens 

 available for slaughter by areas were obtained by apportioning AMS state 

 data on broilers produced and chickens sold on the basis of 1954 Census 

 numbers by counties. The low correlation between county volume of slaughter 

 and supplies available can be largely explained by the following: 



A. Inadequacy of the county as an economic unit, especially as a supply 

 area. 



B. Variations due to under-enumeration, particularly of small slaughter- 

 ing units. 



*This term is used in the sense that Chamherlin does to define a situation where a 

 number of firms share the market for (or supply of) a particular product but "each 

 is in some measure isolated, so that the whole is not a single large market of many 

 (firms), but a network of many markets, one for each (firm)." The Theory of Mono- 

 polistic Competition, Harvard University Press. This concept is appropriate for the 

 poultry meat industry because firms are relatively few and have special relationships 

 with producers due to location, procurement, and contract provisions; yet competition 

 for supplies and outlets is rather vigorous. 



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