Smaller plants may conduct part-time operations by choice, i.e., emphasis 

 on retailing and jobbing rather than wholesaling. Those small and medium- 

 sized plants which concentrate on fowl and roosters are likely to show wider 

 seasonal variations in volume than plants concentrating on broilers and 

 other young chickens grown and sold throughout the year. Hence, capacity 

 may relate to the seasonal peak in volume. 



Many of the obtained estimates of capacity based on line speed or volume 

 per hour probably overstate the sustained rate of operation of the unit with 

 the result that the percentages of utilization of capacity may be somewhat 

 low. Rated capacities are frequently maximums and do not reflect sustained 

 working speeds of employees or the increased maintenance which might be 

 required on equipment. Again, even after the best of planning, it may be 

 virtually impossible to anticipate the occurrence of breakdowns and other 

 incidents which would reduce maximums to practical rates. 



The data do suggest the existence of excess processing capacity. Such ex- 

 cess over current volumes processed could be used to process poultry which 

 now moves out of some of the particular areas included in the study and/or 

 allow for some increase in production above current levels. These data relate 

 only to plants in the small, medium, and large brackets. Excess capacity also 

 exists in very small plants, probably to a greater degree on the average than 

 for small plants. 



The absolute magnitude of plant and equipment costs or their ratio to 

 volume may also hold some clues with respect to the lower rate of utilization 

 of capacity for smaller plants. Large plants face very substantial fixed costs 

 related to plant and equipment, and because of the magnitude of these, will 

 try to maintain volume at a high level to defray these charges. With smaller 

 plants, these fixed costs are much smaller in magnitude, even though they 

 may be greater per unit of volume than in larger plants. With given labor 

 resources (including unpaid family and operator's labor) the small operator 

 may feel he can maximize his total returns by emphasizing phases other 

 than processing. Indeed, he may be unable to expand plant volume without 

 adding more paid resources in terms of labor or payments to others for 

 assembling or distributing, or without maintaining a larger investment in 

 plant and equipment if operations are seasonal in nature. 



Table 20. Utilization of Plant Capacity by 32 Poultry Processors 



Average Number of Head 



* Based on line speeds and/or number per hour in plants without overhead lines. 



48 



