wrapping and stuffing equipment are included in the models at successive 

 plant size stages. 



Model plants capable of processing 600 broilers per hour and less are 

 not mechanized to the same degree as larger plants. Minimum combined 

 capital and labor costs exist with less mechanization and more hand labor. 

 Appendix Table 1 shows the equipment used in the 10 model plants. 



Inasmuch as the type of equipment and the extent of mechanization 

 varies, the investment in equipment per pound of annual volume does not 

 show a conclusive downward trend except from the plants designed for 

 2.400 broilers per hour and larger (Table 7). The 150 and 300 sizes are 

 hand operations; the 600 plant has powered overhead conveyor lines but 

 still employs some manual labor (side-line finisher) on feather removal. 

 At the 1,200 size, machine sizing, feather and offal disposal systems and 

 a slush ice system are the principle changes; these costs are offset by labor 

 savings, so that the combined per-unit labor and capital costs decrease. 

 With respect to ice, previous work indicated manufacturing ice preferable 

 to buying ice. not only in terms of costs but also in terms of convenience, 

 Point-of-use delivery of ice also resulted in labor savings. ^^ 



At capacity operations, costs per pound for equipment ownership and 

 use do not show a continuous downward trend except from the 2,400 

 broiler per hour size through the 10,000 size. Unit costs of ownership and 

 use of equipment are substantially larger than for buildings and related 

 items since equipment is depreciated at a more rapid rate. 



Equipment costs in this analysis were derived from data furnished by 

 operating plants and by equipment-manufacturing firms. However, prices 

 are subject to change over time and precise costs of freight and installation 

 were difficult to determine from many plant records. Pricing practices em- 

 ployed by equipment-manufacturing firms include such features as trade- 

 in allowances, installation help, and package deals when finns buy the 

 entire line through one source. Since individual situations may vary great- 

 ly, equipment prices derived are probably relative rather than precise. 



Despite the substantial dollar investments in equipment required, par- 

 ticularly for plants capable of processing 1,200 broilers per hour and up, 

 the cost of acquiring and using equipment per unit of product is small 

 in comparison with some other items. This substantiates the viewpoint ex- 

 pressed by many plant operators. 



Plant Wages and Salaries 



Plant wages account for 56 percent of total unit costs for plants capable 

 of processing 150 broilers per hour, and 45 percent for the 10,000 size. 

 Management costs (which include office and supervisory personnel) range 

 from 14 to 9 percent of total unit costs for the 150 and 10,000 plants. The 

 relative importance of wages and salaries decreases as plant size increases; 

 other items tend to increase in relative importance (Table 4). 



Operation of a processing plant with the minimum number of employees 

 should not occur at the expense of quality, wholesomeness, or yield. The 

 importance of yield can be illustrated by the following example: with live 

 chickens valued at loc per pound, each 1 percent increase in eviscerated 



13 Univ. of N. H., Agric. Expt. Sta., Agric. Econ. Res. Mimeo. No. 20, op.cit., p 9, 11. 



27 



