Increasing density at any firm size has the same effect as it has on 

 hroiler assembly costs. Chick distribution cost decreases at a decreasing 

 rate. For example, firm D can reduce the per unit distribution cost by 

 0.035 cents a pound when density is increased from 1,000 to 5,000 pounds, 

 but the reduction is only 0.012 cents a pound when density is increased 

 from 5,000 to 25,000 pounds. 



Figure 5 illustrates the relationship between the average cost per 

 pound and increasing production density for six firms distributing 

 chicks. The unit cost decreases at a decreasing rate for the six firms as 

 density is increased. Increasing density beyond 10,000 pounds for firms 

 A and B has little effect on the average cost. The larger size firms, C 

 through F, experience continued decreases in unit cost up to a density 

 level of approximately 15,000 to 20,000 pounds with only minor decreases 

 in cost with further increases in density. 



Figure 5. Chick Distribution Costs per Pound of Live Broiler Produced at 

 Various Density Levels for Six Firms. 



5 10 15 20 25 



Broiler production density ^ thousands of pounds per square 



mile per year 



V. Feed Distribution 



Each firm produces and distributes all the feed required by the 

 broiler growing and hatching egg activities. ^ The feed produced consists 

 of five basic formulations, two for the broilers and three for the breed- 

 ers. Broilers consume a starter ration and a finisher. Breeders are as- 

 sumed to be purchased as day old chicks and are fed a breeder starter 

 ration for six weeks, a breeder grower for the following fourteen weeks, 

 and a breeder layer during the following 40-week laying period. 



The quantity of feed mixed and distributed is a function of the 

 production coefficients and firm size. It is assumed that broilers have a 



1 The assembly of hatching eggs has not been included as a spatial activity. The 

 cost on the basis of a per pound of broiler would probably range between .01 and 

 .03 cents. 



15 



