The Cost of Production of Eggs and Pullets in Southern Arizona

Transcription

1 The Cost of Production of Eggs and Pullets in Southern Arizona Item Type text; Book Authors Embleton, H. Publisher College of Agriculture, University of Arizona (Tucson, AZ) Download date 19/08/ :36:35 Link to Item

2 THE COST OF PRODUCTION OF EGGS AND PULLETS IN SOUTHERN ARIZONA Agricultural Experiment Station University of Arizona, Tucson

3 ORGANIZATION BOARD OF REGENTS SIDNEY P. OSBORN (ex officio) Governor of Arizona LINNE D. KLEMMEDSON, M.S. (ex officio)...state Supt of Public Instruction CLARENCE E. HOUSTON, LL.B., MA., President Term expires Jan., 1949 MRS. JOSEPH MADISON GREER, B.A., Secretary Term expires Jan., 1949 W. R. ELLSWORTH, Treasurer Term expires Jan., 1951 SAMUEL H. MORRIS, A.B., J.D Term expires Jan., 1951 CLEON T. KNAPP, LL.B Term expires Jan., 1953 JOHN M. SCOTT Term expires Jan., 1953 WALTER R. BIMSON Term expires Jan., 1955 LYNN M. LANEY, B.S., J.D Term expires Jan., 1955 JAMES BYRON MCCORMICK, S.J.D President of the University ROBERT LOGAN NUGENT, Ph.D Vice- President of the University EXPERIMENT STATION STAFF PAUL S. BURGESS, Ph.D Dean and Director RALPH S. HAWKINS, Ph.D Vice -Dean and Vice -Director POULTRY HUSBANDRY DEPARTMENT HARRY EMBLETON, B.S Poultry Husbandman HUBERT B. HINDS, M.S Associate Poultry Husbandman Bulletin 208 Revised September, 1947

4 TABLE OF CONTENTS PAGE INTRODUCTION 3 THE BUSINESS SIDE OF PRODUCING EGGS 5 Expenditures 6 Receipts 13 Cost of Producing Eggs 14 FACTORS INFLUENCING THE COST OF PRODUCING EGGS 16 Egg Production 16 Size of Flock 18 Price of Eggs 20 Labor Efficiency 21 Chore Route 22 Mortality 24 Other Factors 25 Feeding 25 Housing 25 Cost and Quality of Replacements 25 Proportion of Pullets 25 Culling 26 Lighting 26 Breeding 26 Winter Egg Production 26 Management Practices 27 FACTORS INFLUENCING THE COST OF PRODUCING PULLETS 27 Number of Pullets 29 Source of Chicks 30 Quality of Pullets 31 Other Factors 31 SUMMARY 31 ACKNOWLEDGEMENT 32 BIBLIOGRAPHY 32 APPENDIX OF USEFUL INFORMATION 33 Rules for Providing Brooding Equipment 36 The Litter Problem in the Laying House 39 Artificial Lighting 41 ILLUSTRATIONS PAGE FIGURE 1.- RELATION OF SIZE OF FLOCK TO EGGS PER HEN 20 FIGURE 2.- CHICK -EGG COST CHART 33 FIGURE 3. -CHART FOR FINDING EGG COST 40 FIGURE 4.- LIGHTING CHART 42 PLATE I.- SIMPLE CLOCK SWITCH 41

5 TABLES PAGE TABLE 1. -BREED DISTRIBUTION 5 TABLE 2. -EGGS PRODUCED PER HEN PER MONTH BY MIXED FLOCKS -ALL PULLET FLOCKS, AND ALL HEN FLOCKS 8 TABLE 3.- ITEMIZED EXPENSE IN EGG PRODUCTION 10 TABLE 4.-CAPITAL OUTLAY FOR 1,500 FOWLS 11 TABLE 5.-COST OF FEEDS 11 TABLE 6.- YEARLY AVERAGE PRICE FEB DOZEN EGGS WEIGHTED FOR VOLUME PRODUCTION AND AVERAGE PRICE PER MONTH 12 TABLE 7.- EGG -FEED RATIO 13 TABLE 8.-ITEMIZD RECEIPTS IN EGG PRODUCTION 15 TABLE 9. -CASH COSTS COMPARED WITH TOTAL COST 15 TABLE 10.- VARIATIONS IN THE COST OF EGG PRODUCTION AS INFLUENCED BY PRODUCTION PER BIRD 16 TABLE 11.- RELATION OF EGG PRODUCTION TO TOTAL INCOME 17 TABLE 12.-RELATION OF EGG PRODUCTION TO EXPENSE 18 TABLE 13.-RELATION OF EGG PRODUCTION TO LABOR INCOME 18 TABLE 14.- VARIATIONS IN THE COST OF EGG PRODUCTION AS INFLUENCED BY THE SIZE OF FLOCK 19 TABLE 15. -THE RELATION OF NUMBER OF LAYERS TO LABOR INCOME 19 TABLE 16.- INFLUENCE OF VARIATIONS IN PRICE RECEIVED FOR EGGS ON THE NET INCOME PER FARM 21 TABLE 17. -NET PROFIT PER DOZEN EGGS RESULTING FROM AN INCREASED SELLING PRICE 21 TABLE 18.- EFFECT OF VARIATIONS IN THE NUMBER OF BIRDS PER MAN ON THE COST OF PRODUCING EGGS 21 TABLE 19.- RELATION OF LABOR EFFICIENCY AS MEASURED BY NUMBER OF BIRDS PER MAN TO LABOR INCOME - 22 TABLE 20. -THE CHORE ROUTE FACTOR 23 TABLE 21.- EFFECT OF VARIATIONS IN THE PERCENTAGE OF MORTALITY ON THE COST OF PRODUCING EGGS 24 TABLE 22.-THE RELATION OF THE PER CENT MORTALITY TO LABOR INCOME 24 TABLE 23. -THE RELATION OF THE PER CENT LAY DURING THE THREE MONTHS, OCTOBER -DECEMBER, TO LABOR INCOME 26 TABLE 24.- COMPARISON OF VARIOUS MANAGEMENT PRACTICES 27 TABLE 25. -CosT OF PRODUCING PULLETS 28 TABLE 26. -COST AND RETURNS OF REARING PULLET'S 29 TABLE 27.- INFLUENCE OF THE NUMBER OF PULLETS RAISED ON COST 30 TABLE 28.- EFFECT OF SOURCE OF CHICKS UPON THE COST OF RAISING A PULLET 30 TABLE 29.- NUMBER OF FEMALES AND MALES REQUIRED FOR VARIOUS HATCHING CAPACITIES 34 TABLE 30.-EFFECT OF TEMPERATURE DURING THE LAST WEEK OF INCUBA- TION UPON THE HATCHABILITY AND DISTRIBUTION OF MORTALITY 35, TABLE 31.-COST OF PRODUCING TURKEY HATCHING EGGS 36 TABLE 32.- RELATION OF BROODING MORTALITY TO FLOOR SPACE 36 TABLE 33.- EQUIPMENT REQUIREMENTS FOR BABY CHICKS 37 TABLE 34. -FEED CONSUMPTION AND UTILIZATION 37 TABLE 35.-LAYING HOUSE FLOOR SPACE 38 TABLE 36.- EQUIPMENT AND SUPPLIES NEEDED PER 100 HENS IN LAYING FLOCKS 38 TABLE 37. -PER CAPITA CONSUMPTION OF EGGS, CHICKENS AND TURKEYS 42 TABLE 38.-AVERAGE WEEKLY FEED CONSUMPTION AND WEIGHT OF TURKEYS 43 TABLE 39. -Loss OF WEIGHT IN DRESSING TURKEYS 43 TABLE 40. -FEED CONSUMPTION AND COST OF GRAIN FOR GROWING TURKEYS 44

6 THE COST OF PRODUCTION OF EGGS AND PULLETS IN SOUTHERN ARIZONA BY H. EMBLETON INTRODUCTION Many people who have been with the armed forces or in war work will be looking for avenues of future livelihood. Some will elect the field of poultry. Of those that attempt poultry raising there will be failures. These failures will be due principally to a lack of working capital, knowledge of poultry raising, and a lack of knowledge of business principles connected with the pursuit of poultry raising. It is hoped that the information contained in this publication will be of assistance in furthering the knowledge of business analysis as it pertains to poultry. The average poultryman, in thinking of his production costs, has in mind only his cash outlay. He takes as a matter of course the hours of labor required to feed, water, clean, and care for the flock. He does not think of the time the wife or other members of the family spend in packing eggs, tending baby chicks, or other duties connected with the poultry. He forgets that he has capital invested in the business which might be placed elsewhere at a fairly safe rate of interest. He does not recall that his poultry houses are being slowly depreciated by wind, weather, and insects and will eventually need to be repaired or replaced. Still, all of these factors, while not at first apparent, should and do enter into the cost of production and should be reckoned with in figuring these production costs, and it becomes necessary to take them into consideration if the poultry industry is to be placed on a business basis. If the industry cannot bear these costs and return a reasonable profit, then it will no longer be attractive to prospective poultrymen or prove a source of profit to those already engaged in it. Prices are determined largely by supply and demand and are, tq a large extent, not under the control of the producer. He can, perhaps, influence them to some extent by selling direct to the consumer, by finding a local or preferred market, or he can often secure better prices by better grading or by producing a better product. But in any of these cases, the price is still subject to the law of supply and demand and is still influenced by daily and seasonal variations. On the other hand, knowing his own costs and the average costs under similar conditions, the producer may analyze his business and often effect economies that may mean the difference between profit and loss. He may find that his business is too small, that he is not utilizing his labor efficiently, or that the production of his flock is not as high as it should be. Some studies have been made along this line in the poultry industry. Scudder, Burlier, Lunn, and Knowlton made a very complete and comprehensive study (7) of conditions in Oregon 3

7 4 EXPERIMENT STATION BULLETIN 208 and of factors affecting the costs of production there. But conditions in Oregon are different from conditions in southern Arizona. A somewhat similar survey of thirty -eight poultry farms (2) was made in California. Another study was made (9) of twenty -three New Hampshire farms, but there was no attempt made to study the factors influencing costs. Castle (3) also studied eighteen California flocks but did not attempt to separate and study the factors influencing costs. A survey (6) was made of Kansas conditions but no attempt was made to secure cost figures. Some figures on costs (8) were published in Ohio, but these were for feed only and were taken from trap -nest records. Some information has been published (1, 5) giving New Jersey egg prices and feed costs, but again there was no effort to determine the factors influencing costs. The costs of growing pullets were investigated in Oregon (4), but no attempt was made to determine the cost factors. The area selected for the present study was the territory immediately surrounding the city of Tucson, Arizona. Many poultry farms have grown up here in the last few years. The flocks are of varying size. All of the eggs from the farms studied are marketed in the city of Tucson. Less than 50 per cent are produced, however, to care for the demands of the city, and many eggs are brought in from the surrounding territory and from adjacent states. There are four ways in which the poultryman can dispose of his eggs. (1) He may sell them to private customers. This usually involves extra costs in labor and delivery, and is not practicable except for the smaller flocks. (2) He may sell to restaurants, hotels, or stores in wholesale lots. This furnishes a good outlet but at a lower price. (3) He may dispose of his product to an egg broker or wholesale house. This returns a still lower price but does not usually necessitate any delivery as the broker takes the eggs at the poultryman's door. (4) There is a limited demand in the spring for eggs for hatching purposes. One poultryman, whose record is included, runs a commercial hatchery in connection with his egg production. Producing eggs for hatching necessitates additional expense for better stock, but this is offset by better egg prices and by better egg production. Several of the poultrymen are trap nesting their birds so as to produce hatching eggs. Fifty -one records were obtained. Of these fifty -one farms seven had not had laying hens for a full year, consequently the records of only forty -four farms were used in figuring egg production. Each record was completed and the factors figured so that the record showed the net income from the flock and the essential factors such as production per hen, cost of producing pullets, etc. The records for egg production costs and pullet costs were taken separately. The records were then sorted according to the various factors and averages obtained for these factors for each group. No effort was made to select the farms, but a record was taken from every poultryman who was willing to give the figures and

8 COST OF PRODUCTION OF EGGS AND PULLETS 5 seemed to have a fairly accurate knowledge of his or her business. Thirty -nine of the records were taken in the area north of the city and twelve in and around the Sunnyside district, south of the city. On these fifty -one farms the White Leghorn was by far the predominating breed. The percentages of the various breeds are shown in Table 1. TABLE 1. -BREED DISTRIBUTIONS No. farms No. hens Pct. of total White Leghorns 33 18, Rhode Island Reds Barred Rocks White Leghorn and some other breed 11 6, Total 51 26, Of the flocks listed as "White Leghorn and some other breed," the largest part of each flock was White Leghorn and only a few birds were of another breed. Probably 95 per cent of the layers in the study were White Leghorns. In no flocks were the different breeds crossed. Many of the poultry owners in this area came here orginally seeking health for themselves or for some member of their family. Some had had previous experience in caring for poultry but many had not. It is interesting to note that not one was born in the state of Arizona, only one had been here 35 years, and one was born in a foreign country. A considerable number were veterans of World War I, living here because of the healthful climate. Of the fifty -one poultrymen seven had passed through their first year's experience, four had been in business for two years, six had passed their third year, while ten had started four years ago. Nine had been in business ten or more years. The owner of the largest flock in the survey had been keeping hens here for seventeen years. THE BUSINESS SIDE OF PRODUCING EGGS The poultryman like any other businessman should have a full appreciation of the risks, dangers, and expenses, as well as the profits, before even deciding to go into the business. Not only should he have a general knowledge of the subject but also an understanding of the specific problems of the area in which he proposes to start his operations. He should study the possible markets and their probable requirements. He should consider the various breeds and select the one that suits him best, and that is best suited to the conditions in that particular area and to the probable market. After having made his decision to enter the business, there still remain many things for him to decide upon. Some of these are the location of the farm, location and type of buildings, yards, etc., and enough capital to finance his enterprise adequately.

9 6 EXPERIMENT STATION BULLETIN 208 A discussion of the expenses that might be necessary, using the 1932 figures for this area to illustrate the approximate amounts of these expenses, will help_ to clear up these points. EXPENDITURES It should be remembered that not all of the capital required is represented by the investment in the poultry plant itself. Stock and equipment are important items that must be considered, and capital must be provided for them before the poultryman can start his operation. These costs amounted to 51 per cent of all capital required in Another survey (7) has shown that these costs for equipment and stock are approximately 63 per cent of all capital required. There are two ways by which a poultryman can enter the business, depending upon the amount of his capital and previous experience. First, he may buy a small amount of stock and gradually build his business up as he develops his flock and his market and accumulates more capital. Second, he may purchase his stock and equipment and enter the business on a large scale. This entails considerably more capital at first and may or may not be conducive to large returns. The first method is always to be recommended for the man with limited experience or capital and usually is better for anyone starting the poultry enterprise. Many people start in the poultry business in a small way, while working whole or part time in some other line of work, and as their capital and experience increase, they gradually build their poultry business up until it is self sustaining. The average capital invested in stock and buildings on the forty -four farms in this survey, that had hens for a full year, was $3.40 per laying hen or $2, per farm accommodating 597 fowls. This does not include any investment for the dwelling of the operator. The capital investment necessary per laying hen in 1945 would approximate $5.10. This initial investment of $3.40 per laying hen is very low compared with that in other areas. In Oregon (7) it was found to be S4.56 per hen, in New Hampshire $10.40 per layer (9), in California $4.58 per hen (2), and in Utah $3.93 per hen (10). Because of the warm climate, tight houses are not needed or wanted and the poultrymen take advantage of this by constructing their poultry houses with open fronts and much more cheaply than can be done in colder climates. Since the margins of profit from the poultry business are narrow, it is necessary to keep the operating expenses as low as possible and yet operate efficiently. It would be false economy to reduce the quality of the birds by purchasing a poor grade of chicks. On the other hand, elaborate and expensive equipment is not necessary. On these forty -four farms the total expenses averaged $3.19 per hen. This included all expenses such as feed, labor, depreciation

10 COST OF PRODUCTION OF EGGS AND PULLETS 7 of buildings, interest on investments, replacements, etc. This was somewhat lower than the cost of $4.09 which was found under Oregon conditions (7) ($3.93 in Utah and $4.29 in California), but as explained before southern Arizona calls for less expensive equipment and buildings. The total expense per hen in 1945 would approximate $5.85. The largest single item of expense with poultry is for feed purchased. All of the feed used by poultrymen in this area except green feed must be purchased, and with the exception of a little hegari grown locally all of it must be shipped in from other regions. In this survey the 1932 feed cost amounted to $1.30 per bird per year or 10.2 cents per dozen eggs. In 1937 it cost $1.86 to feed a hen, and in 1945 the cost was $2.60. Feed represented 41.2 per cent of the entire cost of egg production. In in Utah the cost was 52.7 per cent, in Oregon in , 54.2 per cent, and in California in , 54.2 per cent. This includes all costs of grain, mash, green feed, milk, oystershell, and minerals purchased by the poultryman. Another cost which is important but which is often overlooked in figuring profits is that of labor. The average cost of labor per year was 71 cents per hen or 5.6 cents per dozen eggs produced. This compares very closely with the results in other surveys (7). This was the second highest item of expense and represents 22.5 per cent of the total expense. All of the operator's labor is figured at the rate of 30 cents per hour. In 1945 with the labor rate at 60 cents an hour the labor cost per hen would be $1.42 per hen. With other costs increasing proportionately this labor cost represented 22.2 per cent of the total cost of egg production. The labor cost, or labor return, on a dozen eggs was 11.3 cents. Another item of expense in the cost of producing eggs is that of replacing in the flock those birds that are lost through disease, culling, and in other ways. This item cost the poultrymen in the Tucson area 45 cents per hen per year or 3.5 cents per dozen eggs produced. This is an expense that cannot well be avoided, for 2- year -old hens must be replaced with pullets, and birds that have died must also be replaced. It has been found (2, 7) that a flock containing from 45 per cent to 60 per cent pullets is the most efficient in egg production. A comparison of pullet and hen egg production is shown in Table 2. In 1945 the replacement cost per hen per year was 68 cents, or 5.4 cents per dozen eggs. In taking the records of the forty -four farms, the inventory was secured for the beginning and the end of the year. In a few cases it was found that the value of the birds on hand was more at the end of the year than at the beginning. However, in a majority of cases it was lower. This was undoubtedly due to two reasons: first, many poultrymen actually decreased the number of birds in their flocks by not providing for replacements as they felt that poultry probably would not be very profitable during the coming year, or they did not have sufficient funds to secure these replace-

11 TABLE 2. -EGGS PRODUCED PER HEN PER MONTH BY MIXED FLOCKS, ALL PULLET FLOCKS, AND ALL HEN FLOCKS* Kind of flock Number of flocks Eggs per hen Nov. De. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Total Average of all flocks, hens and pullets All pullet flocks All hen flocks Difference Note. -The average of all flock records during the 3 -year period comprising 271,000 hens indicated that the flocks were made up as follows: 60 per cent pullets, 30 per cent yearling hens, and 10 per cent old hens. *From Oregon Experiment Station Bulletin No. 287.

12 COST OF PRODUCTION OF EGGS AND PULLETS 9 ments; second, many pouultrymen felt that, since the price of hens had dropped from the 1931 price, they should be inventoried at a lower price at the end of the year than they were at the beginning, and this, of course, brought about a decrease in the inventory value. A poultryman must have a certain amount of money tied up in his buildings, equipment, and stock at all times. He is entitled to a return equivalent to interest rates on this investment. As stated before, the average poultry farm had àn investment of capital of $3.40 per laying hen. Figuring interest on this capital at 8 per cent, each hen would have to pay 27 cents per year as interest toward the poultryman's investment. With an interest rate of 5 per cent, and a capital investment of $5.10 per hen in 1945, each hen would have to pay 25 cents per year for interest. Buildings depreciate fairly rapidly in this area even with ordinary repairs and each hen must pay 9 cents per year for the upkeep of the building in which she is housed. This includes not only a charge for repairs but a certain amount to be set aside to replace the buildings when they are no longer usable. This equivalent figure for 1945 would be 5:9 cents per hen per year. By far the greater percentage of the poultrymen deliver all or a part of their eggs to market and some of them to private customers. This entails keeping an automobile or truck and the hens must pay for their share of the upkeep of it. For this car expense, the average hen must pay 8 cents per year. In 1945 this figure would be increased to 15 cents per hen per year. In Arizona, hens are assessed and taxed the same as real estate. However, since many of the poultrymen in this area are veterans, they are exempted from a certain amount of taxes, so their poultry pays no tax. The average cost for taxes was 1 cent per bird per year. This would remain about the same in As a means of increasing the production of their birds during the period of high prices, more than one half of the poultrymen lighted their poultry houses part of the time during the year, some for all night, some for only a few hours per night. The average hen in this section must pay 1 cent per year for this lighting. There would be no change in this estimate for Aside from the costs already mentioned, there are many smaller items that enter into the cost of egg production. Included in these costs are water, litter, blood testing, drugs and medicines, egg cases and cartons, insurance, leg bands, lice powder, disinfectant, and, in a few cases, storage. These costs are low per individual item but amounted in the aggregate to 13 cents per hen per year at the time of the survey. This figure would increase to 18 cents in These costs are summarized in Table 3, showing also the percentage which each item is of the total. The percentages do not

13 TABLE 3.- ITEMIZED EXPENSE IN EGG PRODUCTION; AVERAGE OF FORTY -FOUR FARMS WITH 597 BIRDS PER FARM Cost per farm Cost per hen Cost per dozen Percentage of eggs (cents) total cost * * * * Capital in stock and buildings $2,030 $3,045 $3.40 $5.10 Interest Labor Feed 778 1, Replacements Auto expense Upkeep of buildings Taxes Light Inventory depreciation Miscellaneous Total $1,910 $3,486 $3.19 $ Figuring items representing Cash outlay only $1,332 $2,407 $2.24 $ *Estimate.

14 COST OF PRODUCTION OF EGGS AND PULLETS 11 change materially from year to year (7), but the costs may change due to variations in prices. It will be observed that three items, feed, labor, and replacements, made up 77 per cent of the total operating expenses on these forty -four farms. Of these three main items, feed is the most difficult item on which to lower costs. But that all of them may be affected by one or more factors was shown clearly in this study. These items increased to 80.3 per cent in TABLE 4.- CAPITAL OUTLAY FOR 1,500 FOWLS Est. 3 acres of land, which includes enough space for dwelling, at $200 an acre $ 600 $ 600 Water system 750 1,500 Laying houses 1,500 2,250 Brooder houses for 2,400 chicks ,500 mature pullets ready to lay 1,500 2,250 Storage building for feed and egg room Total $5,100 $7,650 Cost per hen $ 3.40 $ 5.10 Kinds TABLE 5. -COST OF FEEDS Cost per cwt Wheat $1.55 $2.75 Red milo Oats Hegari Cracked yellow corn Ground oats Ground barley Rolled oats Yellow corn meal Wheat bran Wheat shorts Linseed meal *Alfalfa meal Meat scraps, 50% protein Dried buttermilk Bone meal Oystershell flour Charcoal Salt *Price quoted in 1945 is for alfalfa leaf and blossom and meal, dehydrated. Note. -A total -cost method of estimating expenses involves all items shown in Table 3 including interest, labor, and depreciation. A cash -cost method includes only items that call for a definite cash expenditure. A cash -cost method would not include interest, labor, and depreciation costs. This is the common method used by poultrymen but not necessarily the right one.

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16 Year COST OF PRODUCTION OF EGGS AND PULLETS 13 TABLE 7.- EGG -FEED RATIO Price Price 100 lb. of feed dozen eggs* (cents) Egg -feed ratio 1932 $ : $ :6 *Weighted average of all grades in relation to percentage production per month. A typical example of the necessary capital outlay for a 1,500 fowl flock is shown in Table 4. The items of land, water system, and storage building would be sufficient to care for 1,500 fowls. Inasmuch as the feed cost is a major item of cost in producing eggs (approximately 60 per cent) the relation between feed cost and the price received for eggs is a criterion for measuring possibilities between different periods or years. The egg -feed ratio is an indication as to how many dozen eggs at current prices would be needed to purchase 100 pounds of feed at current prices. RECEIPTS Before considering the factors influencing costs, it is well to consider the receipts that may be expected to offset the expenses which must be incurred. The receipts from the poultry industry include all of the returns from eggs, from cull hens, from any increase in the inventory at the end of the year, and miscellaneous receipts. In this study the average hen returned $3 gross per year to her owner toward the expense of caring for her for the year. Since the average flock was 597 hens per farm, it follows that the average return per farm was $1,793 per year. From this, the owner must pay all expenses and derive his profit. Of the above income, eggs provided 90.7 per cent of the total. Each hen produced an average of 111/2 dozen eggs which sold at 23.6 cents per dozen, thus returning $2.72 to her owner. Eggs which were used in the operator's household were included in the total, as though they had been sold, although often at a less price when the lower grades such as cracked or checked eggs were used. Since the sale of eggs is the major source of income from the poultry, this is the item upon which the poultryman should concentrate his best efforts to improve and extend. Hens sold or eaten included birds that were no longer profitable to keep as layers and that were sold for meat or eaten in the operator's household. The average returns from this source were 19 cents per hen or 6.3 per cent of the total receipts. The price of hens for meat was very low during 1932, and this is reflected in the comparatively low returns from this source. While some poultrymen were not optimistic as to the outlook and were decreasing the size of their flocks, others were building

17 14 EXPERIMENT STATION BULLETIN 208 up their flocks either because they started in a small way due to limited capital or experience or because they believed they saw greater opportunities in the future of the poultry industry. The result is that some flocks showed an increase in their inventory at the end of the year. In this study twelve of the forty -four flocks showed an increased inventory and one remained the same. When this increased value is spread over the whole forty -four flocks, it adds 7 cents to the receipts per bird and is 2.3 per cent of the total receipts. Miscellaneous receipts were only 0.7 per cent of the total receipts. The main item was for empty sacks returned to the feed store or sold elsewhere. Small amounts were also received from county fair premiums and from poultry manure sold. These receipts are summarized in Table 8 which also shows the percentage which each item is of the total. Tables 3 and 8 show that the average hen in this area lacked 16 cents of paying all of her expenses and that the average cost of producing a dozen eggs was 25.4 cents. On a cash outlay basis in 1945 there was a net profit of 10 cents a dozen. The largest income over all costs both cash and noncash on a per -farm basis was $1,919 and the largest loss per farm was $1,492. This demonstrates that there is a chance to make a very good income in the poultry business, but that there is also a very good chance for a sizable loss. COST OF PRODUCING EGGS There are two methods or yardsticks by which the cost of producing eggs may be measured. One is the business method which takes into consideration both cash and noncash expenses and is known as the total -cost method and the other which takes account of only the cash expenses. The total -cost method charges all costs against the hens whether cash or noncash. The operator is allowed wages of 30 cents an hour for the time he spends actually caring for the hens. If any other member of the operator's family spends time caring for the birds, due allowance is made for it. Interest is charged against the business for all capital invested, and depreciation is charged on the buildings and equipment. It is only fair to the poultryman that these charges should be included. He cannot be expected to work for nothing and he is entitled to a fair return on his money the same as he could secure if it were invested elsewhere. On the other hand, the average poultryman does not consider these expenses in figuring his costs of production. He knows how much money he takes in and how much he has to expend. The money returned by the hens for his labor is cash in his pocket. He is not interested in or does not consider the money which should be charged as interest. It is also cash from his business. Depreciation of buildings is not considered. A few repairs, which he makes himself at a slight outlay of money, keep the laying houses in a usable condition so he does not see why he should lay aside money

18 TABLE 8.- ITEMIZED RECEIPTS IN EGG PRODUCTION; AVERAGE OF FORTY- FOUR FARMS IN 1932 Receipts per farm Receipts per hen Percentage of total * * * Eggs sold or eaten $1, $3, $ 2.72 $ Hens sold or eaten Increase of flock Miscellaneous Total cost basis $1, $3, $ 3.00 $ *Estimate. TABLE 9. -CASH COSTS COMPARED WITH TOTAL COSTS Total cost Cash cost Gross returns * * * Cost of producing a dozen eggs $.254 $.465 $.177 $.32 $.26 $.492 Income per farm , Cost per hen *Estimate.

19 16 EXPERIMENT STATION BULLETIN 208 for their depreciation. Therefore, one may well consider the cash costs of producing eggs and see how they compare with the total costs. It will be seen from this that the poultryman is securing his income by using the returns for his labor and capital invested and by not keeping up his buildings and not from the profit he makes from his hens. FACTORS INFLUENCING THE COST OF PRODUCING EGGS From the preceding information it was established that there are several important factors influencing the cost of producing eggs. These were demonstrated by arranging the records according to these various factors and averaging all of the records within each class. EGG PRODUCTION That good egg production is always essential in a profitable poultry business is well illustrated in Table 10, which was made up by sorting the forty -four records according to production and averaging all of them in each class. Yield is not the only factor, but it does greatly decrease the costs of egg production. TABLE 10.- VARIATIONS IN THE COST OF EGG PRODUCTION AS INFLUENCED BY PRODUCTION PER BIRD (FORTY -FOUR FLOCKS) u2 u u, cl d + co la t CO CO d N.-1 rl r-1 Q) ~ o o r'i ÓD r'1 bo,h 7-4 W rib ßrIó,-1N Number of farms Production per bird Number birds per farm Price per dozen eggs (cents) Per cent mortality Av. cost to produce doz. eggs (cents) Table 10 shows how directly the rate of production affects the cost of egg production. The farms that had an average production of 177 eggs produced eggs at an average cost of about 37 per cent as much as the farms at which the flocks averaged ninety -two eggs per bird per year. This table would seem to indicate that one must have an average production of at least 150 eggs per bird in order to be assured a profit. Twenty -four, or over half, of the farms did not have this. But the fact that the balance of the farms did maintain an average above this figure indicates that it can be done if proper stock is secured and the right care is given the birds. The farms with the lowest production were small ones. This would indicate that possibly the reason for the low production was that the poultry was a side line and as such did not receive much attention. The flocks that gave the highest production were En 5-I

20 COST OF PRODUCTION OF EGGS AND PULLETS 17 also small. This is undoubtedly because the owners of these small flocks were very much interested in them and had time to give them especially good attention. The fact that the eggs from the lowest -producing flocks were sold at a price 7.2 cents per dozen higher than any of the other groups (probably being sold direct to consumer) did not make up for the abnormally low production. Mortality apparently did not have much influence on the production, as it did not vary with any degree of regularity. Feed costs vary only slightly, being $1.18 per hen for the lowest - producing group and $1.33 for the highest group. This increased feed cost is more than made up by the increased egg production. As indicated in Table 10, 16 per cent of the forty -four farms had an average egg production per hen of 177 eggs a year. Forty - five per cent averaged 161 eggs per hen in a year, indicating that with a reasonably good setup and management profitable production may be obtained. The cost in producing a dozen eggs on 16 per cent of the best farms was 19.3 cents on a total -cost basis and only 13.3 cents on a cash -cost basis. The best 45 per cent of the farms produce a dozen eggs at a total cost of 22.1 cents and at a cash cost of only 15.2 cents. The great increase in the cost of producing eggs in the group averaging 100 eggs or less was due to the labor cost of a fowl being approximately two and one half times as much as the average for all groups. The labor cost per hen in the remaining groups varied within a very limited range from 0.62 cents to 0.76 cents per bird. Under conditions existing at the time of this survey, it would require a production of at least 150 eggs per bird per year to keep the cost of production at or below the selling price. The relation of egg production to labor income was worked out by the University of Missouri and published in their Extension Circular 330: The phase of poultry management which is of most significance to the farmer is the labor income. By labor income is meant the difference between the receipts and all expenditures, including feed cost, overhead expenses such as interest on the investment, depreciation of buildings and equipment, miscellaneous expenses and money spent or new stock to improve the flock. Labor income is the return the farmer receives for his or her labor. This can be determined only when complete records of the enterprise are kept. TABLE 11.- RELATION OF EGG PRODUCTION TO TOTAL INCOME (1,248 FLOCKS -ALL BREEDS)* Average yearly egg production per hen Number of flocks Sources of income per hen Eggs Fowl Increase in inventory Total income per hen Under $1.58 $0.76 -$0.11 $ and over *From Missouri Ext. Cir. 330.

21 18 EXPERIMENT STATION BULLETIN 208 TABLE 12.- RELATION OF EGG PRODUCTION TO EXPENSE (1,248 FLOCKS -ALL BREEDS) * Sources of expense per hen No. of flocks Feedt Interest Average yearly egg production Depreciationt Miscellaneousll Stock and eggs bought Total cost per hen Under 100._ 70 $1.30 $0.25 $0.22 $0.01 $0.03 $ and over *From Missouri Ext. Cir tincludes feed for young and old stock. tdepreciation-5 per cent. Interest -6 per cent. Il Includes egg cases, certification, spray materials, etc. TABLE 13.- RELATION OF EGG PRODUCTION TO LABOR INCOME (1,248 FLOCKS -ALL BREEDS)* Average yearly egg production Number Total Total Labor per hen of flocks income expense income per hen per hen per hen Under $2.34 $1.81 $ and over *From Missouri Ext. Cir SIZE OF FLOCK Another factor directly influencing the cost of producing eggs is the size of the flock. This is shown in Table 14. As indicated the cost to produce a dozen eggs goes down rapidly as the size of the flock increases. The cost in the flocks of over 1,200 birds is only 60 per cent as much as it is in the flocks averaging less than 200 birds. One of the main reasons for this reduction in cost of production in larger flocks is found in the greater labor efficiency in them. It will be noted that in the smallest flocks, one man cared for only 95 birds, but that the number cared for went up steadily until in the largest flocks one man was caring for 1,875 birds, or more than eighteen times as many. This number of birds is based on a man working full time per day. Very few of the poultrymen in the area studied had enough hens to keep them busy all day, and their labor is figured for only the time actually spent with the poultry. Production per bird seemed to be as high in the large flocks as it was in the small ones, but the price for which the eggs were sold

22 COST OF PRODUCTION OF EGGS AND PULLETS 19 TABLE 14.- VARIATIONS IN THE COST OF EGG PRODUCTION AS INFLUENCED BY THE SIZE OF FLOCK (FORTY -FOUR FARMS) : ti 0 mm to I N 0 d, o cu 9 oo q.0.-i o Number of farms Av. number of birds ,003 1, Production per bird Price per dozen eggs (cents) Birds per man 720 1,221 1,323 1,404 1,853 1,434 Cost per dozen eggs (cents) Cost per dozen eggs (cash cost) was consistently less as the size of the flocks increased. This was undoubtedly due to the fact that with smaller flocks, the operator had time to deliver the eggs to private customers, while with the large flocks, the volume was too great and they were sold at wholesale. However, the increased price was not enough to overcome the handicap of small volume. Mortality did not appear to be any higher in the large flocks than in the small ones. Feed costs per bird decreased as the size of the flock increased, because the owners of the larger flocks were able to buy their feed cheaper in large amounts. Too many poultrymen are trying to make a living from 200 to 400 hens. One hundred hens are about the equivalent of one cow as a production unit, and no one would expect to make a living from two to four cows. Larger -size units are necessary if one expects to make a livable income from poultry. Some figures from a publication by C. E. Lee on the relation of number of layers to labor income are enlightening. TABLE 15. -THE RELATION OF NUMBER OF LAYERS TO LABOR INCOME ON NEW YORK COMMERCIAL POULTRY FARMS, 5 YEARS, * Year Small flocks Number of layers Average flocks Large flocks Small flocks Labor income Average flocks u55 co Large flocks ,946 $1,076 $2,035 $3, , , ,251 2, , ,220 2, , ,226 2, ,006 Five years' ay ,106 2,175 $ 471 $ 976 $1,958 *C. E. Lee, Profitable Poultry Management.

23 20 EXPERIMENT STATION BULLETIN 208 z S W a on 0 c W (. \o \ o o a AVE. NUMBER HENS PER FLOCK Figure 1.- Relation of size of flock to eggs per hen. Other results on the relation of size to flock to eggs per hen, compiled by the Los Angeles County Farm Bureau, are set forth in Figure 1. PRICE OF EGGS The price of eggs is probably the factor that the average poultryman thinks about most, yet this is the factor which is the least under his control, as it is regulated by supply and demand. However, the price received does have a direct bearing on the profits of a poultry farm as is shown in Table 16. Table 16 shows that the poultrymen receiving a higher price per dozen for their eggs also made a larger net income. An increase in price of 8.8 cents a dozen, from 21.7 cents for the low -price group and 30.5 cents for the high -price group, turned a loss of $219 per farm into a gain of $63 per farm. This was in spite of the fact that the flocks were smaller where the higher price was received for the eggs, and consequently labor costs were higher per unit. These higher egg prices were secured in the following ways: (1) by better grading and better quality, (2) by more efficient marketing, (3) by retailing to private customers, and (4) by selling eggs for hatching. Probably not any one of these factors is responsible for the increased egg price but rather a combination of several of them. However, the increase in the price of eggs was accompanied by a similar increase in costs, so not all of the higher price was profit. This is shown by comparing costs and selling price as in Table 17.

24 COST OF PRODUCTION OF EGGS AND PULLETS 21 TABLE 16.- INFLUENCE OF THE VARIATIONS IN PRICE RECEIVED FOR EGGS ON THE NET INCOME PER FARM (FORTY -FOUR FARMS) (TOTAL -COST BASIS) 22c and under 23-25c 26e and over Average Number of farms Average price of eggs (cents) Number of birds Production per bird Per cent mortality Birds per man 1,519 1,438 1,165 1,434 Net income per farm (dollars) TABLE 17. -NET PROFIT PER DOZEN EGGS RESULTING FROM AN INCREASED SELLING PRICE 22c and under 23-25c 26c and over Average Selling price (dozen) Cost of production (dozen) Net gain or loss per dozen Table 17 shows the margin due to an increased price of eggs. Some poultrymen sold at a cost below the cost of production, while others were able to get a price above all costs. Mortality was not much different in the three groups as shown in Table 16, but fewer hens were cared for per man in the groups receiving the higher prices because more time was spent in marketing. LABOR EFFICIENCY Labor efficiency may well be measured by the number of birds one man may care for efficiently, using his full time. It might be noted here that eighteen men working full time could have cared for all the hens on the forty -four farms covered in the survey if they had been in one flock. This shows that each operator on an average works less than half of his time taking care of his hens. In other words, the poultry farms in this area are working at less than half capacity so far as man labor is concerned. Table 18 shows the results of increasing the efficiency of the man labor on the farms studied by having more birds per worker. TABLE 18.--EFFECT OF VARIATIONS IN THE NUMBER OF BIRDS PER MAN ON THE COST OF PRODUCING EGGS No. birds cared for 899 or under 900-1,299 1,300-1,999 2,000 or over All farms by one man Av. number birds per man 596 1,085 1,560 2,360 1,434 Numbers of farms Production per bird Price per dozen eggs (cents) Per cent mortality Cost per dozen eggs (cents)

25 22 EXPERIMENT STATION BULLETIN 208 Increasing the number of birds taken care of by one man, full time, from 596 to 2,360 hens decreased the cost of producing a dozen eggs from 33.4 to 21 cents per dozen, a decrease of 37 per cent. This is brought about by the increased efficiency of the labor, and since labor is more than 22 per cent of the total cost of producing eggs, it becomes an important factor. The fact that increasing the efficiency by increasing the flock from 1,085 to 1,560 birds in the second and third groups did not decrease the production costs is undoubtedly due to the fact that the third group for some reason had an abnormally low egg production per bird, which more than offset the gain due to increased labor efficiency. The price received for the eggs was lower as the number of birds per an increased. This is to be expected, since with a larger number of birds the operator has less time for marketing, and a larger proportion has to be sold at wholesale. The more hens a man can take care of, the greater his efficiency and the less the labor cost of producing eggs. There is also a distinct tendency toward a lower mortality where more birds are taken care of by one man. He makes it his business to care for the hens and does a better job than does the man with whom it is only part -time work and who has less interest in the outcome. Still other figures showing the relation of labor efficiency as measured by the number of birds per man to labor income are set forth in Table 19. TABLE 19.- RELATION OF LABOR EFFICIENCY AS MEASURED BY NUMBER OF BIRDS PER MAN TO LABOR INCOME ON NEW YORK COMMERCIAL POULTRY FARMS, * Year Low efficiency Birds per man Average efficiency High efficiency Labor income Low efficiency efficiency Average High efficiency ,337 $1,780 $1,818 $2, ,238 1,248 1,550 2, , ,101 1, , , , ,263 Five years' ay ,263 $ 750 $1,176 $1,902 *C. E. Lee, Profitable Poultry Management CHORE ROUTE A very important labor -efficiency factor known as the "chore route" is the arrangement of the layout of the farm in such a way as to eliminate as many steps as possible during the routine of the day's work. In the Oregon survey a study was made of this factor. Their results are reported in Table 20.

26 COST OF PRODUCTION OF EGGS AND PULLETS 23 d to 0 co, 0 4., m '' o a aeaal.tad sanog aeaf aad salmi a (3 a3) aaue;sip aveaan+ suzae; je;o; Jo ae;uaaaad 03 o cd oa CO N ti.r ~ w CO ro- o0ó co ao co w LO co CO co CO CO Co Ñ ooi m co -..-I.-+ r c., ó o 4.4 aeab aad sanog aeas w woo aad saibbi co r- o w rn cy co co m Ñ m,y w (;aa) aaue;sip aeaan o co rn co ` rco C.-, co -4,4 w.-a co co co m,o ;7:5 A sutae; je;o; ;o ae;uaaaad r-! N cc: m,-, Ñ w 7., o? o- 00! o aeas.lad sanog r- m m r- co ti o) 2 o tzi 0 2 t0, CIS.--e o *' to al A aeaó aad sai?iai (;aa;) aaue;sip aeaany suiaex Ie3a; ;o ae;uaaaad N co o w 2 Ñ ou o wo co CO oco o ow m ca ol N ó m co a; 2 7r co Ñ,-. o 8o5a A... Ñ y N TS W ns ó -4-, N.-i o o W O 1- N W ó ị-4.a N W oo O.--i o v Ó TS cv i-. W.-i o N o ii D y w tl ó Sr.Q z

27 24 EXPERIMENT STATION BULLETIN 208 MORTALITY One of the factors that the poultryman must guard against is losses from disease or otherwise. Birds that are lost in this way are removed from production and return nothing as meat in the inventory. The effect of a high rate of mortality is shown in Table 21. Mortality here may mean either loss from disease or loss from stealing. Both have the same effect -the bird is removed from the flock. A comparatively small loss has resulted from stealing. TABLE 21.- EFFECT OF VARIATIONS IN THE PERCENTAGE OF MORTALITY ON THE COST OF PRODUCING EGGS 9% or 40% or less 10-19% 20-39% over Average Number of farms Birds of flock , Per cent mortality Production per bird Cost to produce 1 dozen eggs (cents) Birds per man 1,530 1,496 1,510 1,099 1,434 Price per dozen eggs (cents) The average loss of hens through disease or theft in the area studied was 25 per cent. This is too high and the poultrymen could well take steps to reduce this loss. However, the effect of TABLE 22. -THE RELATION OF THE PER CENT MORTALITY OF THE BEGINNING NUMBER OF LAYERS TO LABOR INCOME ON NEW YORK COMMERCIAL POULTRY FARMS, 5 YEARS, * Per cent of beginning number Labor income Year Low mort. Average mort. High mort. Low mort. Average mort. High mort $2,457 $1,964 $2, ,922 1,352 1, , , Five years Av $1,419 $1,129 $1,033 *C. E. Lee, Profitable Poultry Management. this mortality is not so great as might be expected, and the influence it exerts is not so noticeable as the four previous factors. The nine farms where losses ran over 40 per cent paid 4.3 cents per dozen more for producing costs than did any of the other groups and 6.8 cents more per dozen than did the lowest cost group. However, in this one group, the losses approached the epidemic form. Good care pays at all times, and strict sanitary measures will become increasingly important as the length of time that poultry has been kept in the area is increased. If the percent-

28 COST OF PRODUCTION OF EGGS AND PULLETS 25 age of loss had been reduced to a considerably lower figure, it would have unquestionably lowered the cost of egg production. Other figures showing the relationship of the per cent mortality of the beginning number of layers to labor income are reproduced in Table 22. OTHER FACTORS Several other factors have a bearing on the cost of egg production, but these are tied up more or less closely with the six main factors previously mentioned. These factors are: FeedZng. -The system of feeding grain and mash is fairly uniform throughout the area. Only two of the fifty -one poultrymen did _not feed grain but fed all mash. A few have started feeding pellets, and a considerable portion of them fed wet mash at least part of the time. All fed mash in hoppers or troughs. Thirty -eight scattered the grain on the ground and thirteen fed it in hoppers or troughs. Only one reported having grain before the birds all the time. For green feed all but seven of the fifty -one fed alfalfa, either green or dried, usually supplemented with barley or oats in the winter. Two reported feeding no green feed. Other materials used for green feed were wild mustard, cabbage, lawn clippings, wheat, rye, lettuce, kale, Chinese cabbage, wild turnip, and rabbit hay. The system of feeding has a direct bearing on production, labor efficiency, and mortality. The more efficiently the feeding is done, the higher the production and the lower the mortality. Housing. -There were ninety -nine poultry houses located on the fifty -one farms. Of these, forty -six were built of galvanized iron, forty -three of wood, and ten of adobe. On the fifty -one farms twenty -one had no dropping boards in their poultry houses, seventeen had dropping boards that were screened, and thirteen had dropping boards that were not screened. This would have an effect on mortality, since the dropping boards, aside from catching the droppings, often perform a useful function in breaking up drafts which might affect the birds' health. Screening the droppings so that the birds cannot get in them often prevents the spread of disease. Twenty -four have running water piped to the houses and a large proportion of these have automatic floats. Cost and quality of replacements. -It is important that pullets be raised for replacements as cheaply as possible and even more important that they be well grown, vigorous, and from a good laying strain of birds. Proportion of pullets. -Since pullets lay better than old birds, it is better that pullets make up a considerable proportion of the flock. On the other hand, there is danger (7) in having too large a proportion of pullets. Risks in brooding chicks are fairly high, and a flock of pullets may contain a relatively high percentage of culls, while with hens that have gone through at least one laying season, there has been an opportunity to eliminate the culls. Also many poultrymen want some older hens in a flock to produce eggs

29 26 EXPERIMENT STATION BULLETIN 208 for hatching. As indicated before, about 45 to 60 per cent pullets is the most efficient percentage for egg production. Culling.- Culling should be practiced each year. The best plan is to cull out a hen whenever she stops laying in the spring or early summer. Two or three times during this season, the flock should be gone over and any drones sent to market. In this way only the very best are retained for the second season's production. Lighting.- Twenty -four or nearly one half of the poultrymen used lights on their birds at least part of the year. Breeding. -Stock from high -producing strains is always an important factor in keeping down the costs of egg production due to the increased production obtained. In the Oregon (7) survey of 3 consecutive years the factors influencing the cost of egg production are listed as follows: egg yield, labor efficiency, size of flock, price of eggs, mortality, feeding, and housing. From its survey of 3 consecutive years, Utah (10) lists the following factors influencing cost of egg production: egg yield, mortality, flock depreciation, size of flock, egg price, and egg -feed ratio. In a California report covering a period from August, 1929, to July 31, 1930, the following factors dealing with the cost of egg production are listed: size of flock, egg production, mortality, cost of feed, and price of eggs. Winter egg production. -That the winter egg production has a decided relation to labor income is evident from figures set forth in Table 23. A high rate of lay in the fall when egg prices are high is necessary for a good labor income on a poultry farm. As a five years' average , for each additional one per cent in the rate of production in the three months, October- December, the labor income increased $51. As a five years' average the farms obtaining a low percentage lay of 14.5 on the three months, October- December, returned a labor income of $706. Those with a high per cent lay of 31.6 in these three months returned 'a labor income of $1,582. A high percentage of lay in the fall months is the consequence of healthy, well -developed, early hatched pullets and well maintained production of older birds. The five years' average was 25.0 per cent lay in the fall.' TABLE 23. -THE RELATION OF THE PER CENT LAY DURING THE 3 MONTHS OCTOBER TO DECEMBER TO LABOR INCOME ON NEW YORK COMMERCIAL POULTRY FARMS, 5 YEARS, * Year llessr % lay Labor income 13 to 20 % lay Labor income More than 20 Labor income % $1, $2, $2, , , ,132 Less 30 or than 30 more %lay %lay `C. E. Lee, Profitable Poultry Management. '"Ibid.

30 COST OF PRODUCTION OF EGGS AND PULLETS 27 Management practices. -From a survey by the Los Angeles County Farm Bureau it was found that mortality and egg production are influenced by different management practices. Their results appear in Table 24. TABLE 24.- COMPARISON OF VARIOUS MANAGEMENT PRACTICES, 1938* Management and practice No. of records Mortality Egg production Net profit Feeding mash and pellets Mash Mash and pellets Method of collecting droppings Wired pits Drop on litter Dropping boards Times litter changed More than 8 times Less than 8 times Effect of feeding fresh greens Fresh greens No fresh greens Effect of feeding wet feed Wet feed No wet feed No wet feed (10 high co- operators) Effect of deworming Do not deworm $0.75 Deworm once a year Deworm twice a year Deworm 3 times or more a year *L. D. Sanborn, Los Angeles County Farm Bureau. It is evident from the similarity of the above results that the factors mentioned must be the vital ones in determining the cost of egg production irrespective of location. FACTORS INFLUENCING THE COST OF PRODUCING PULLETS Of the fifty -one farms in the study, thirty -seven raised pullets during 1932 for replacements in their flocks for the 1933 season. Since these pullets were raised in connection with the regular poultry operations, there is a possibility that they were produced at a slightly lower cost than when they were raised separately. Some equipment may be made use of by both chicks and hens, and labor costs might be slightly less. The average cost of producing pullets on the thirty -seven farms after taking out the receipts derived from the sale of cockerels and cull pullets was 98 cents per pullet raised. Of the various costs that enter into raising pullets, the largest single item was for feed, as this was 44.7 per cent of the total cost. The original cost

31 28 EXPERIMENT STATION BULLETIN 208 of the baby chicks was the next highest item, being 25.5 per cent of the total cost, while labor was 22.7 per cent. In the Oregon survey it cost $1.25 to grow a pullet to 6 months of age on a total -cost basis and 98 cents on a cash -cost basis. The items of overhead and the per cent they represent of the entire cost follow: labor, 15.8 per ccent; feed, 51.9 per cent; miscellaneous, 6.7 per cent; chicks, 20.4 per cent; depreciation, 2.5 per cent; interest, 2.7 per cent. Credit items amounted to 19.3 per cent of the gross cost of $1.57. In the Utah survey it cost $1.23 to grow a pullet to 6 months of age on a total -cost basis and 90.6 cents on a cash -cost basis. The items of overhead and the per cent they represent of the entire cost follow: chicks, 26.8 per cent; feed, 45.4 per cent; auto operation, 0.3 per cent; miscellaneous, 0.7 per cent; depreciation and interest, 8.7 per cent; labor, 16.7 per cent. Table 25 shows the costs of producing pullets. TABLE 25. -COST OF PRODUCING PULLETS Total cost per farm Cost per pullet (cents) Per cent total cost Interest $ Labor Feed Cost of baby chicks Fuel Upkeep of buildings Miscellaneous Total $ Receipts $ Net cost of producing pullets $ Cash cost of producing pullets $ The average mortality for the 42,486 baby chicks purchased on these thirty -seven farms was 17 per cent up to the time the pullets were 6 months old. Each poultryman raised 35 per cent pullets from his baby chicks. In other words, he had to provide approximately three chicks for each pullet he had at 6 months of age. Not all of the costs of producing pullets, however, must be paid for in cash by the poultryman. Labor is usually provided by the operator or his family without cash outlay. Interest on the investment is not usually considered by the poultryman and he can get along by making only necessary repairs to his buildings without considering the depreciation. Taking out these noncash items it is found that the pullets cost only 61.5 cents per bird or $249 per farm in actual cash outlay. A verification of the above figures with a somewhat more detailed study of these costs was made by C. E. Lee and appears in Table 26.

32 COST OF PRODUCTION OF EGGS AND PULLETS 29 TABLE 26. -COST AND RETURNS OF REARING PULLETS, 118 NEW YORK COMMERCIAL POULTRY FARMS, YEAR ENDED SEPTEMBER 30, 1933* Average per farm Cents per pullet Per cent of total Number of pullets raised 1,150 Costs Feed $ Litter Human labor Horse labor Use of auto Use of land Use of buildings Use of equipment Interest Miscellaneous $1, Returns Value of pullets and cockerels over chick cost $1, Manure Miscellaneous $1, Gain Value of cockerels over chick cost Net cost of pullets 1, *C. E. Lee, Profitable Poultry Management. NUMBER OF PULLETS The same effects of the size of business in decreasing costs are apparent in the cost of raising pullets as in the cost of producing eggs. The receipts from cockerels and cull pullets sold were considerably higher in the small flocks, probably due to the fact that the birds to be marketed were kept to a larger size and marketed to private trade. In the large flocks there was no time for this, and the birds were often sold as soon as the sex could be determined. In spite of these higher receipts the costs were much higher for raising a pullet in the small flocks than in the large flocks. The effects of increasing the number of chicks brooded on the cost of raising a pullet are shown in Table 27, where the records are arranged according to the number of pullets raised. It will be seen from Table 27 that the cost of raising a pullet decreased directly as the number of pullets raised increased. The poultrymen who raised an average of 871 pullets raised them at a cost of 21 per cent less than the group having an average of only 264 pullets. One reason for this is the much more efficient use of labor in the larger flocks. The group having the smaller number of pullets had a labor charge of 73.2 cents per pullet while in the largest flocks this charge was only 21.3 cents, a difference of 71 per cent.

33 30 EXPERIMENT STATION BULLETIN 208 TABLE 27.- INFLUENCE OF THE NUMBER OF PULLETS RAISED ON COST pullets pullets 600 pullets or over Average Number of farms Number baby chicks per farm 264 1,222 2,385 1,148 Number pullets raised per farm Per cent mortality Per cent pullets from chicks Cost per baby chick (cents) Cost of labor per pullet (cents)._ Receipts per pullet (cents) Net cost of raising a pullet $ 1.20 $ 0.99 $ 0.95 $ 0.98 SOURCE OF CHICKS In an effort to determine whether the source of the baby chicks had any influence on the cost of raising a pullet, the records were sorted into three groups. In one group were placed all farms where chicks originated from the home flock, in another group the chicks were purchased from within the state, and in the third group the chicks came from some other state, some from as far away as Missouri and Iowa. The results are shown in Table 28. TABLE 28.- EFFECT OF THE SOURCE OF CHICKS UPON THE COST OF RAISING A PULLET zs o TS o cn ú!:l Number of pullets raised per farm Number chicks per farm 1, ,235 1,148 Per cent mortality 22 17* Cost per chick (cents) Per cent pullets raised from chicks Total cost of raising pullet $ 0.88 $ 1.02 $ 1.03 $ 0.98 *It should be kept in mind that this survey way made in Since then, with the practice of blood testing becoming quite general, the average mortality in Arizona- produced chicks would not exceed 5 per cent. It can be seen from Table 28 that it was somewhat cheaper to raise a pullet when the chicks were hatched from eggs from the poultryman's own flock. While the initial cost per chick was somewhat less than for chicks secured from either of the other sources, the mortality was higher and the percentage of pullets raised from chicks was lower. Savings can be effected by home hatching, but it seemed to make little difference whether the chicks were from local or out -of -state hatcheries as far as cost of producing pullets was concerned.

34 COST OF PRODUCTION OF EGGS AND PULLETS 31 QUALITY OF PULLETS Low cost of pullet production, however, should not be considered more important than quality. The future of the poultry - man's enterprise depends upon the quality of his replacements. If they are well grown, vigorous, and from a good laying strain, the production of his flock will be increased. If they are not, the production will be decreased. The effect of any change in management upon the quality of the pullet should always be considered carefully before making the change. OTHER FACTORS Low mortality, efficient feeding, prompt separation of the broilers from the pullets, good care, and rigid and prompt culling of low -grade pullets (7) are other factors in lowering pullet production costs which should be given careful consideration by every poultryman. SUMMARY A study of production costs brings out the weaknesses of a poultry enterprise and shows how greater efficiency can be secured. A survey of forty -four farms in southern Arizona showed that in 1932 the average cost of producing eggs on these farms was 25.4 cents per dozen while the average price received for these eggs was 23.6 cents per dozen, making a net loss of 1.8 cents per dozen on a total -cost basis. The poultryman was able to make a living because 7.7 cents of his costs was for his labor, interest on his investment, and for the upkeep of his buildings. Not having to pay it out in cash he had it to live on. One of the most important factors influencing the cost of producing eggs was the production per bird. As the number of eggs laid per bird increased, the cost of production per dozen eggs was lowered. The size of the flock was another important consideration. The larger the flock the poultryman kept, the more cheaply eggs were produced. Some poultrymen received a higher price for their eggs than others. Their income from poultry was directly proportional to the price they received for their eggs. However, the poultryman had little control over the price of his product. The more birds that one man fed, watered, and took care of, the cheaper the cost of eggs. This was due to the increased labor efficiency reducing the cost of labor, which was one of the main items of expense. Mortality did not have so great a bearing as the previous factors but was important. Care must be taken at all times to have conditions as sanitary as possible so as to prevent losses. Other factors having a bearing on the costs of egg production but of minor importance were (1) feeding methods, (2) housing,

35 32 EXPERIMENT STATION BULLETIN 208 (3) cost of replacements, (4) proportion of pullets in the flock, (5) culling, (6) lighting, and (7) breeding. The larger the number of chicks brooded, the less the cost of raising a pullet. The geographical source of the chick was not so important in the cost of raising a pullet as it was to make sure that the chicks came from a high -producing strain of birds. The net cost of producing a pullet was 98.3 cents and the actual cash cost to the poultryman was 61.5 cents. ACKNOWLEDGMENT Sincere appreciation is hereby extended to all of the poultrymen who through their willingness to co- operate and their patience in making available the information made this study possible. BIBLIOGRAPHY 1. Allen, W. H., Egg production. Monthly costs and receipts on New Jersey poultry farms. N. J. Agr. Exp. Sta., Hints to Poultrymen, Vol. 12, No. 4 (1924). 2. Buster, Melvin W., What California's cost of production studies reveal concerning poultry management. Journal of Poultry Science, Vol. VII, No. 2, pp (1927). 3. Castle, C. V., Second annual report, poultry analysis and cost study Los Angeles Co. Agr. Ext. Service, University of Calif., co- operating with Los Angeles Co. Farm Bureau ( ). 4. Cockell, Fred H., Cost of rearing pullets to six months of age. Ore. Agr. Col. Ext. Serv., Ext. Bull. 379 (1924). 5. Knowles, W. F., Effect of variations in prices of eggs and feed upon farm income. N. J. Agr. Exp. Sta., Hints to Poultrymen, Vol. 18, No. 5 (1930). 6. Payne, L. F., and Steup, Howard H., A. poultry survey in Kansas. Kansas Agr. Exp. Sta. Bull. 245 (1928). 7. Scudder, H. D., Burrier, A. S., Lunn, A. G., and Knowlton, F. L., Cost and efficiency in commercial egg production in Oregon. Ore. Agr. Exp. Sta. Bull. 287 (1931). 8. Sherwood, R. M., and Buss, W. J., Experiments with poultry. Ohio Agr. Exp. Sta. Bull. 262 (1913). 9. Woodworth, H. C., and Reed, F. D., Economic study of New Hampshire poultry farms. N. H. Agr. Exp. Sta. Bull. 265 (1932). 10. Thomas, W. Preston, and Clawson, Marion, Economic factors affecting poultry production and marketing in Utah 1929, 1930, and 1931.

36 APPENDIX OF USEFUL POULTRY ECONOMIC INFORMATION /00 /0 Egg cost per. chick (cents) 90 zo 30 s0 60 Cost os e935 in cents per clozert -Chart by Dr. L. E. Card Per cent /0 hatch o f salable chicks 0 Figure 2.- Chick -egg cost chart for calculating egg cost per chicken with varying egg prices and varying percentage hatch. Suppose (as illustrated) hatching eggs cost 43 cents a dozen and the hatch of salable chicks is 60 per cent. One can quickly determine the egg cost per chick by laying a straight rule at the 43 -cent mark on the left hand side and at the 60 -cent mark on the right hand side. The point where the ruler intersects the diagonal line represents the egg cost per chick, which is 6 cents.

37 TABLE 29.- NUMBER OF FEMALES AND MALES REQUIRED FOR VARIOUS HATCHING CAPACITIES* 40% ay. egg production 50% ay. egg production 60% ay. egg production No females No. males 1,000 2,000 3,000 4,000 5,000 Leg. 50 Heavy 67 Leg. 100 Heavy 134 Leg. 150 Heavy 200 Leg. 200 Heavy 267 Leg. 250 Eggs per week Eggs 21 days or incubator capacity Eggs per week Eggs 21 days or incubator capacity Eggs per week Eggs 21 days or incubator capacity 2,800 8,400 3,500 10,500 4,200 12,600 5,600 16,800 7,000 21,000 8,400 25,200 8,400 25,200 10,500 31,500 12,600 37,800 11,200 33,600 14,000 42,000 16,800 50,400 14,000 42,000 17,500 52,500 21,000 63,000 Heavy 333 Note. -In actual practice the average egg production is low early in the season and high later. In order to get sufficient eggs for February settings (March chicks), more females are needed than can be fully used later. So as a rule most hatcheries plan on about 1,200 females for each 10,000 incubator capacity, figuring on dropping the poorest flocks or limiting each flock owner later in the season when egg production is at the peak and more are being produced than can be set. *Courtesy Hatchery Tribune.

38 TABLE 30.- EFFECT OF TEMPERATURE DURING THE LAST WEEK OF INCUBATION UPON THE HATCHABILITY AND DISTRIBUTION OF MORTALITY (FORCED DRAFT INCUBATOR)* Incubation temp Per cent hatched Per cent of cripples at hatching Per cent that lived 21 days after hatching *Courtesy of Turkey Topic and Dr. Al L. Romanoff, Cornell University. w cn

39 36 EXPERIMENT STATION BULLETIN 208 TABLE 31. -COST OF PRODUCING TURKEY HATCHING EGGS* Items Cost per farm Cost per hen on hand April 1 Cost per hatching egg Percentage total cost Feed $254 $ c 38 Labor Use of land, buildings, and equipment Taxes Depreciation of breeding flock Interest on value of flock (5 %) Other items Total gross cost $661 $ c 100 Credit for cull eggs Total net cost $655 $ c 99 *Average cost of producing turkey hatching eggs in Oregon for year ending June 1, Forty -five farms -6,483 hens -217,116 hatching eggs produced. Average flock 144 hens and 15 toms for 6.4 months. Average production, 33 hatching eggs per hen. Average cost of feed - grain, $1.17 per 100 lbs.; mash, $1.90 per 100 lbs. Average feed consumption per hen - mash, 52.2 lbs.; grain, 56.6 lbs. (Oregon Bulletin 333.) Cost on individual farms in this study varied from less than 10 cents per hatching egg to nearly 30 cents. As a rule the cost per egg for large flocks was less than for small flocks. At the Jan. 1, 1938, price of feed the feed cost per hatching egg would be approximately the same as in TABLE 32.- RELATION OF BROODING MORTALITY TO FLOOR SPACE (BUSTER AND NEWLON, 1934) * Floor space per 100 chicks (square feet) Less than to and over *Jull, Poultry Husbandry. Number of Chicks 73,007 25,371 25,044 Mortality 19,254 4,122 3,484 Per cent mortality RULES FOR PROVIDING BROODING EQUIPMENT' 1. Have i square foot of floor space for each three chicks. 2. Have 7 square inches of hover area for each chick. 3. Supply at least 1 gallon fountain capacity per 100 day -old chicks. 4. Provide 1 inch of feeding space per chicken for first 4 weeks. 5. Keep several inches of clean, dry litter beneath chicks at all times. One bale peat litter will cover 100 square feet 3 inches deep. 6. Have two accurate thermometers graduated to 140 degrees F. in the brooder house. These will show the temperatures in other parts of the house as well as at the edge of the hover. Reliable weather thermometers are satisfactory if they are graduated high enough to prevent their bursting at the high temperatures which are likely to result before the brooder stove is accurately regulated. SBuyer's Guide, 1911.

40 COST OF PRODUCTION OF EGGS AND PULLETS Provide a 36 -foot strip of 18 -inch (width) deadening felt, or some rigid material, for a thick guard around the hover at the start of the brooding period. 8. Provide 2 inches of feeding space per chick after the fourth week, using large hopper. 9. Place small grit hopper on the wall of the house. 10. Provide roost frames to encourage early roosting. 11. Place 1 -inch mesh chick wire under roosts to prevent chicks from scratching in droppings. 12. Keep hover and house at following temperatures: Hover temperature under edge of hover and 2 inches from floor First week 95 to 100 Second week 95 to 100 Third week 92 Fourth week 88 Room temperature 70 to to to to 75 Fifth week and on, gradually reduce till no more heat is required, which will usually be about 8 weeks. TABLE 33.- EQUIPMENT AND SUPPLIES NEEDED TO RAISE CHICKS UP TO 6 WEEKS OF AGE* Brooder house Brooder stove Feeders 100 chicks 200 chicks 300 chicks 500 chicks Floor area (sq. ft.) Diameter of canopy (in.) Length of feeders (ft.) Fountains Capacity (gal.) Feed *Buyer's Guide, Age in weeks All -mash starter (lb.) ,000 TABLE 34. -FEED CONSUMPTION AND UTILIZATION* Weight per 10 chicks (lb.) $ 100 Leghorn chicks 100 heavy breeds Feed per week (lb.) (94.5)t (352.3) t Weight per 10 chicks (lb.) Feed per week (lb.) (95.1) f (394.3) t

41 38 EXPERIMENT STATION BULLETIN 208 TABLE 34- Continued $ (755.8)t 22.90$ (839.2)t (1214.0)t (1358.1)t (1793.7)t (2012.5)t (2387.2)t (2724.7)1' *Adapted from Nebraska Ext. Cir taverage feed consumed per 100 chicks to age indicated. Cockerels removed. TABLE 35.- LAYING HOUSE FLOOR SPACE RECOMMENDED BY THE WASHINGTON AGRICULTURAL EXPERIMENT STATION Size of house (sq. ft.) Leghorns Heavy breeds 20 x 20 = x 30 = x 24 = x 30 = x 75 = 1, x130 = 2,600 1, TABLE 36.- EQUIPMENT AND SUPPLIES NEEDED FOR 100 HENS IN LAYING FLOCKS* Equipment and supplies Light breeds Heavy breeds Floor area of laying house (sq. ft.) Length of feeders (ft.) Capacity of fountains (gal.) 5 5 Nests Trap Open Length of perches (ft.) Diameter of ventilator necks (in.) No. of 40 -watt lamps 2 2 Egg mash (lbs. per day) Scratch (lbs. per day) *Buyer's Guide, t300 square feet and 400 square feet respectively for southern Arizona

42 COST OF PRODUCTION OF EGGS AND PULLETS 39 THE LITTER PROBLEM IN THE LAYING HOUSE` There are many different kinds of litter in use among commercial poultrymen, ranging all the way from materials available on the farm such as plain sand, straw, granulated corncobs, chapped corn stalks, etc., to, the more expensive processed litters such as Stazdry (processed sugar cane), peat moss, peanut shells, shavings and oat hulls, or one of the popular combinations of these two groups of materials such as shavings and straw, peat moss and straw, sand and straw, or Stazdry sugar cane litter and straw. Some of the characteristics of these litters may be mentioned very briefly. The Stazdry (processed sugar cane) is an excellent litter, very light in color and very free from dust. As made at present, this litter is light and fluffy and does not readily pack down, moreover it has excellent absorptive powers. It breaks down readily in the soil but does not have much fertilizing value of itself. This litter will last for a long time. It is also excellent in combination with straw. Shavings are most popular where they can be obtained cheaply. In most sections they are too expensive to use for anything but baby chicks. Shavings make a very clean, light -colored, dust -free litter, but they do not decompose in the soil and therefore their disposal is sometimes a problem, as farmers do not like to put manure containing shavings on their land. Shavings have a poor rating in moisture absorption, and where much moisture is present they have to be cleaned out and renewed frequently. Straw is the most common litter used for laying hens, and in grain - growing sections it is so cheap that it is the only practical litter to use for laying hens. Straw has only fair rating in moisture absorption and has a relatively short life as litter so that it must be renewed frequently. It does have the advantage of giving more exercise to the laying hens, particularly where grain is fed in the litter, than any other type of litter, and there are times when this extra exercise is an exceedingly important factor in maintaining proper condition of the birds and high egg production. For this reason, a combination of straw and Stazdry sugar cane litter, or straw and one of the other commercial litters, makes a very practical type of litter and one which is increasingly popular even in the sections where a good deal of grain is grown and there is a large supply of local straw. Peat moss is a very popular litter in many sections, particularly where it can be purchased without too much transportation cost. Much of the peat moss used in this country comes from Europe - particularly, Germany, Holland, Sweden, and Russia. Prices vary considerably, and the quality of different brands also varies greatly. Peat moss has a greater absorptive power than any other litter and the greatest lasting quality, but it is dark, usually dusty, and the dust is dark and very dirty. After peat moss has been used for a time there is generally a coating of thick, dark brown dust on everything in the interior of the house, and often the eggs may be coated with this dust also. Peat moss packs down very hard when wet, unless constantly agitated, but it takes a very large amount of water to get it so wet that it becomes caked. This litter furnishes little or no exercise to the birds, as grain thrown in it stays on the top and the birds walk around and pick it up without exercising to any extent as they do when grain is thrown in straw litter. Peat moss does provide a dust bath for the birds, which aids in the control of lice. Peanut shells are less commonly used as litter, but are somewhat more satisfactory in the laying house than shavings since they have greater moisture absorption. The disadvantage is that they break down readily and when damp may get packed down and caked on the floor. They are reasonably light colored and reasonably free from dust. The lasting quality is fair. Oat hulls are commonly used for litter when oats are very cheap and there is little call for oat hull feed for the manufacture of low priced rations. Oat hulls are frequently sold at rather high prices for use as a 'C. E. Lee, Profitable Poultry Management.

43 $ FIND YOUR EGG COST Eggs laid PPer per 100 pounds 100 hens per day~ most of feed (grai i and is41 tovether as Feat ; hq2 amse- 90 c a hacls EXAMPLE d9assumed: 80 F eed costs $2 perl00pound3 100 hens lay45eggs a day Then : 90 Feed cost of dozen eggs =I2cts.. Necessary sellingpricea20cts. I00 Courtesy Dr. L. E. Card, University of Illinois Figure 3. -In the column at the left of the chart, the cost of feed per hundred pounds is set down. In finding this cost in order to figure the cost of eggs, the grain and mash must be averaged together in the proportion as fed. This is important. A mere fifty -fifty average is not sufficient for accurate cost finding. If two parts of grain are being fed to one of mash as is frequently the case, with a high protein laying mash through the fall and winter months, the price of grain per hundred pounds should be multiplied by two and the cost of a hundred pounds of mash added to this. The total should be divided by three and the result, of course, is the cost of feed per hundred pounds as fed. If three parts of grain and two parts of mash are being used, multiply the cost per hundred pounds of grain by three and the cost per hundred pounds of mash by two, add them together and divide by five. The amount of grain and the amount of mash consumed per hundred birds per day must be known, of course, in order to work out this proportion. Unless the feeder knows exactly the proportion in which he is feeding the grain and mash, the accurate feed cost per dozen eggs cannot be computed.

44 COST OF PRODUCTION OF EGGS AND PULLETS 41 litter, but when obtainable at reasonable prices they make a very clean, bright, and nearly dust -free litter. The birds may eat some of the oat hulls, but probably will not consume enough to do them any harm, and in some cases, where cannibalism and prolapse are giving trouble, the consumption of some of the oat hulls will probably do a good deal to alleviate the condition. Oat hulls have a relatively low absorption rating but last in the laying house about as long as some of the other litters with relatively low absorptions qualities, such as shavings. Corncob litter is widely used in the corn growing sections and in the east, particularly in Delaware, Maryland, and parts of Pennsylvania. If the cobs are dry and free from mold, and the breaking is properly done so that pieces about the size of a garden pea result, and if the dust and finer particles are removed by screening, the resulting litter is very satisfactory and practical where corncobs can be obtained. Some care must be taken to see that this litter doesn't get real wet when the interior of the house is warm, because it is likely to develop considerable mold which may be a cause of illness and mortality among the birds if they consume it. When properly used, however, it is not likely to give any trouble. It has excellent absorptive power and reasonably good lasting quality. The color is not so light as Stazdry or shavings and not nearly so dark as peat moss; furthermore, it is relatively free from dust. Courtesy C. L. Lee, Profitable Poultry Management. Plate I. -Simple clock switch made at Beacon Poultry Research Farm out of a clock which keeps good time and lasts for years. It consists of a plain knife switch, block of wood, string, rod soldered to clock alarm key, and cord with plug to end of circuit left open. ARTIFICIAL LIGHTING' 1. Over a period of 8 years results with morning lights have averaged best. Pullets on all -night lights did not do so well the next year. 2. Use chart (Fig 4) and set your clock switch to turn on the lights at the time shown on upper curve. Change setting once a week. 3. Light must be brightest on feed and water but roost must also get some illumination. 'C. E. Lee, Profitable Poultry Management.