This report does not consider the optimum size and output for a 

 vertically coordinated broiler producing and marketing firm. Such firms 

 perform a number of other activities such as processing, hatching, broil- 

 er assembling, and chick distribution. That analysis is the subject of a 

 future report in this series. The present study, however, relates the size 

 of feed mills to the size of growing operations specified for processing 

 plants of stated capacity. 



II. Objectives 



The purpose of this report is to provide information for planning 

 adjustments that will reduce feed costs for feed-mixing firms with par- 

 ticular reference to the New England broiler industry. Specifically, this 

 report has four objectives, which are: 



1. To determine the economies of size in the manufacture of broil- 

 er and breeder feeds by feed-mixing plants. 



2. To determine the cost of bulk-feed distribution at three levels 

 of broiler and breeder flock production density. 



3. To determine the optimum size of combined manufacturing and 

 distributing operations for each production density level. 



4. To determine the potential reductions in distribution costs from 

 increases in production density. 



In addition, data on input requirements for labor, building, equip- 

 ment, management, utilities, and other resources of lesser importance 

 are provided for the several sizes of manufacturing and distributing 

 operations. These data along with costs applicable to the New England 

 region are used to develop a short-run average cost curve for each firm 

 to illustrate cost variation with short-run changes in output. 



III. Method and Procedure 

 Method 



The economic-engineering method is used to develop the costs in 

 feed manufacturing and feed distributing under several levels of broiler 

 and breeder production density. This approach requires the determina- 

 tion of the various physical input-output relationships for each of the 

 steps in the process. Standardized costs are applied to the physical rela- 

 tionships to derive the cost functions. These relationships are used in 

 "constructing" and "operating" the several model plants and distribu- 

 tion operations. 



Several sources were used in obtaining information and data for the 

 manufacturing and distributing phases of this report. Time studies and 

 interviews with mill personnel were made to obtain data on labor re- 

 quirements. Mill personnel also provided information on managerial 

 inputs, technical data on equipment, and accounting and cost data. Build- 



