The ingredients for the formulations are purchased separately by 

 each mill from various sources. The only ingredients purchased as a 

 premix are the drugs and some minerals used in minute quantities 

 which are mixed with a carrier such as corn meal. 



In the analysis of short-run average costs for each mill, the outputs 

 of breeder feeds are held constant while broiler feed outputs are varied. 

 The analysis is made in this manner since the production cycle of broil- 

 ers is substantially shorter than for breeders. 



Feed distribution costs are developed for six of the eight mills with 

 operations at their specified capacities. These mills: A, B, C, D. E, and F 

 distribute their total feed production in bulk form by truck direct to 

 broiler and hatching egg-producing units in the surrounding area. The 

 analysis of the distribution operation is based on a method developed 

 in a previous report in this series.* 



IV. Economies of Size in Feed Manufacturiug 



Feed Manufacturing Process 



The feed manufacturing process of the model mills consists of sev- 

 eral stages: receiving and storing ingredients, grinding, mixing, pelleting, 

 and storing finished feeds. Figure 1 illustrates the flow of ingredients 

 and feed through the stages for manufacturing broiler and breeder feeds. 



1. Receiving and Storing Ingredients — The model mills rely ex- 

 clusively on rail and truck delivery of ingredients. All grain and grain 

 products originating in the Midwest and some minerals from other re- 

 gions are delivered by railroad. Other ingredients such as meat and bone 

 scrap, fishmeal, limestone, fat, and premixes are delivered by truck. 



Dry ingredients are purchased in bulk or bags. Bulk ingredients are 

 delivered by rail in either hopper or boxcars. Delivery by hopper cars 

 which empty directly into a receiving sink is usually more efficient than 

 l>ox car delivery which requires more time and manual labor to unload. 

 Bagged ingredients are delivered by truck or rail. In either method, the 

 ingredients are unloaded by hand bag truck and stored in a warehouse. 



Fat is delivered by heated tank truck in a liquid state and is pump- 

 ed from the truck directly into heated storage tanks. 



Bulk ingredients are conveyed from the receiving sink by a series 

 of screw conveyors to a bucket elevator. The ingredients are elevated and 

 gravity-fed through a turnhead into pipes leading directly to storage 

 silos or bins or to horizontal screw conveyors that convey the ingredients 

 to bins. In the receiving system there is a cleaning shoe to remove for- 

 eign material and magnets to remove tramp metal. 



Shelled corn is stored in silos located adjacent to the mill Imilding 

 and rail siding. All other dry bulk ingredients are stored in a cluster of 

 bins located in the mill building above the first floor. The capacity of 

 the silos and bins is sufficient for ten days of mill operation at its 

 designed capacity. 



-* W. F, Henry and C. R. Burbee, Marketing New England Poultry: 5. Effects of 

 Firm Size and Production Density on Broiler Assembly Costs, University of New 

 Hampshire Agricultural Experiment Station Bulletin 482, April 1964. 



