largest possible firm size at this density level. Over 95 percent of the 

 total unit cost is for broiler assembly and feed distribution, the former 

 accounting for approximately 60 percent and the latter approximately 

 36 percent of the total. Chick distribution costs are a very small portion 

 of the total. As firm size is increased, the initial decreases in unit chick 

 distribution cost are more than offset by the increases in the unit broiler 

 assembly and feed distribution costs. 



The situation is similar at the 5,000 pound density level. The total 

 unit cost increases continuously from 1.007 cents for firm A to 1.463 

 cents for firm F. However, the percentage increase in cost with increas- 

 ing firm size is considerably less. At the 1,000 density level, the total 

 unit cost increased by 47 percent between firms A and D, but the in- 

 crease at the 5,000 pound density level is only 21 percent over the same 

 range in firm sizes, and 45 percent from firm A to firm F. 



At the 25,000 pound density level, there is an initial decrease in 

 the total unit cost as firm size is increased. The cost per pound is .816 

 cents for firm A and decreases to .786 cents for firm B. The decrease is 

 a result of unit cost decreases for chick and feed distribution amounting 

 to .05 cents. This is only partially offset by a .02 cent rise in the unit 

 assembly cost. The total unit cost increases continuously from firm B to 

 a high of .963 cents for firm F. The percentage increase over the range 

 of firm sizes considered is 18 percent and 22 percent between the firms 

 with the lowest to the highest unit cost. 



Figure 8 shows the relationship between firm size and unit cost 

 for the spatial activities at each density level. 



Increasing broiler production density reduces total unit spatial cost 

 for a given firm size. For example, for firm D, total unit costs decline 

 from 2.095 cents per pound at 1,000 pounds per square mile to 0.820 

 cents per pound at 25,000 pounds per square mile. 



Figure 8. Spatial Activities Costs per Pound of Live Broiler for Various 

 Size Firms Producing Broilers at Three Density Levels.! 



2.2 

 2.0 

 1.8 

 1.6 

 1.4 

 •1-2 



i'-o 



o 



a. 



i .8 



a. 

 Pi 



S .6 



o 

 u 



.4 



1,000 pound dens ty level 



5,000 pound density level 



C5,000 pou.Td den:;ty level 



iO 20 3C 40 to 



Firm size : millions cf pc^i'ds 01 live fcroiU.'S hand'.-j cn.iujlly 



£0 



70 



1 Spatial Activities: (1) Broiler Assembly, (2) Chick Distribution, (3) Feed Dis- 

 tribution. 



19 



