The World’s Largest Open Access Agricultural & Applied Economics Digital Library This document is discoverable and free to researchers across the globe due to the work of AgEcon Search. Help ensure our sustainability. Give to AgE con Search AgEcon Search http://ageconsearch.umn.edu [email protected] Papers downloaded from AgEcon Search may be used for non-commercial purposes and personal study only. No other use, including posting to another Internet site, is permitted without permission from the copyright owner (not AgEcon Search), or as allowed under the provisions of Fair Use, U.S. Copyright Act, Title 17 U.S.C. comeitimmuNoxnarque- ,entarti.ttQsziL EC011eNtea Farmers' Report No.23. UNIVERSITY OF LFEDS Economics Section: Department of Agriculture SOME ECONOMIC ASPECTS OF THE LAYING BATTERY SYSTEE OF EGG PRODUCTION 1937-38 by J• D • Nutt 9B. A . IN D. . DEPARTMENT OF h'I.GRICULTURE. N.M .0 omber EC0 N O1VIIC S SEC TI ON. 1939. March INTRODUCTION Previous work on poultry costs has emphasised the difficulty of finding a number of flocks on which the systems of management are sufficiently similar to justify any comparisons or averaging of costs. The present study, which relates to nine flocks kept under the battery system, is an attempt to overcome this difficulty. The choice of the battery system as a study has much to .commend it. First, it is a system which has become widely adopted only within the last few years. Secondly, it appears to be self-contained and to have none of the "mixed" character prevalent amongst the more usual systems of poultry keeping. Lastly, it is a system about Which little information has been published, yet it is one which may have an important bearing on the future of the poultry industry. Besides the nine flocks for which complete costs were obtained, the records of egg production, mortality and culling from one other enterprise have been incorporated. Fullest acknowledgment is due to those who have so painstakingly compiled the records week by week, and it is hoped that, to them in particular and to poultry keepers generally, this report will be of interest and value. GF.NERAL CONDITIONS Perhaps the most important contribution that the battery system will make in developing the poultry industry will be the conversion of the laying bird from a farm animal to almost a factory machine. A brief outline of the system may not be out of place. A suitable type of house is equipped with laying cages, adult birds are placed in the cages and remain there quite content, as far as one can see, after the first few days, fulfilling their normal functions until culled or until death terminates their activities. Egg collection, H See Farmers' Reports Nos.3, 10, 17. 2. the feeding and watering of the birds and the cleaning of the cages are matters of daily routine. But simplicity is more apparent than real. There is no more agreement on the best methods to be followed in this than there is in the older systems of poultry keeping. Such questions as what constitutes the best type of house or ventilation; the pros and cons of large versus small units; the best methods of feeding or the best, type of food; whether to use pullets or older birds and how long to retain birds in the battery, will long continue to exercise the minds of both the practical poultry keeper and the theorist. In practice one finds that the individual appears to have developed his own enterprise along the lines which most easily fit in with existing circumstances. It may be shortage of accommodation, the hope that a new development of this kind will enable an increased return to be obtained from an already intensive form of mixed poultry farming, or the existence of usable accommodation in strange and most unpoultrylike places, that will determine the form and extent of each enterprise. From this point of view the battery system appears to be most adaptable, and laying units of varying sizes and fitting in with widely varying conditions are to be found. Indeed, the battery system, by keeping in use otherwise derelict buildings, might be regarded as a scavenger of capital in much the same way as the pig is, or used to be, a scavenger of foodstuffs. Thus the conditions under which battery egg production is practised vary from one extreme to the other. Examples of these variations, though not necessarily in the units on which this report is based, were as follows:- One floor of a disused textile factory hDd been fitted up to accommodate 3,000 laying birds in cages, and day-old pullet icks were bought and reared in batteries for replacement purposes. A roomy loft over a garage had been converted into a 500 bird unit with the most modern equipment, and for another, a factory worker had converted a small warehouse adjoining his home to accommodate some 300 birds. An intermediate stage between "industr.j" and "agriculture" is represented by examples of battery units of 300-500 birds situated in gardens, on small holdings, 3 and even on waste land both in thickly populated and tural areas. Sometimes these units are associated with other systems of poultry keeping and replacement stock is home reared; sometimes the units are the only form of poultry keeping practised. Where the battery system is found in an agricultural environment, i.e. on the general farm, it is sometimes regarded as a distinct enterprise, and sometimes as a way of extending egg production after the limit of accommodation under other systems has been reached. Finally, the system is found as part of the large specialised poultry farm. It is a flexible system and can be made to fit in with conditions which vary between wide limits - a hen in a cage is much the same production unit in a back yard or a factory as on a farm. Technique is narrowed down to an appreciation of the requirements of the laying bird and she aopears to be content under all environments. Elaborate equipment does not appear to.be necessary. The owners of home-made equipment, often constructed at very low cost, are scr)rnful of those who insist on expensive houses and cages. On the other hand not every one has the ability or opportunity to make his own equipment and, as the size of the unit becomes greater, the difficulties of making equipment at home must increase. The reasons for developing the system are many. Examples which may be given are the part-time occupation of, or as an additional source of income for, people engaged in other than agricultural pursuits; the possibilities of developing along "industrial" lines; the Extension of the more usual methods of egg production and even the adoption of battery egg production as a hobby.,, Thus there are many sets of conditions under which battery egg production is carried out; there are also many reasons for taking it up. Within the system,- too, there are many variations in the methods followed, and these differences must not be lost sight of when considering average costs and returns. TABLE I Percentage and per Laying Bird Distribution of Costs and Receipts Costs Receipts Nine Units Your Unit NinejUnIts .Y..o...u.._r Unit per per per per per per per per cent laying cent laying cent laying cent laying bird bird oird bird s. d. S. d. s. d. S. d. Food 49.7 10 6 Eggs 90.9 18 8 Replacement & Table Poultry 6.3 1 4 deprec.of stock 26.5 6-i Stock Depreciation transferred 2.3 5-2- of equipment 5.7 1 a Sundries .5 li Labour 13.0 2 9 Sundries 1.2 3 Interest on Capital 3.9 Total 100.0 21 0-1- 100.0 Total 100.0 20 7 100.0 Profit Loss 4. COSTS AND RECEIPTS Table I shows the costs and receipts as percentages of the total costs and total receipts respectively, and per laying bird. Although three of the nine units carried more than 900 birds each, and the other six less than 400 birds each, there was little variation between the large and small units in the average distribution of the costs and receipts, or the amounts per laying bird, under the various headings. All the units have, therefore, been considered together. The cost of food amounted to just under half the total cost and to 10/6d.per bird. The cost of replacement and depreciation of stockwas the next most important item at 26.5 per cent of the total and 5/6-id.per bird. Labour came next at 13.0 per cent of the total and 2/9d.per bird. This item included bothpaid labour and unpaid labour, charged at the equivalent cost of hired labour. The extent to which paid or unpaid labour was: used varied with the individual circumstances, but the • figures quoted are. fairly representative of the total requirements. Interest on capital at 3.9 per cent and 9-q-d. per laying bird, and sundries at 1.2 per cent and 3d.per laying bird, • complete the distribution of costs. The figures stress the great importance, first of the cost of food and, secondly, the cost of. stock replacement and depreciation, and these may be considered in more detail. „Variation in food costs may be due to two causes, the purchase price of the food and the efficiency with which it is fed. Differences of food costs between individual units arise from the proportions fed as mash and as pellets and, to some extant, from the fact that purchasers Of small quantities must usually pay slightly . higher prices than purchasers of large quantities. Of all the food purchased for the nineunits during the year 31.6 per cent was in the form of pellets, 67.0 per cent in the form of mash, and the remaining 1.4 per cent was composed of grit and a small amount of corn. There was nc uniformity. in the proportion of pellets or mash used on individual units. Five used no pellets at all; one used no mash, and on the remainder quantities of pellets ranging from 51 per cent to 72 per cent of the total food were used. The average cost of pellets over the year was 11/7d.per cwt. compared with 10 /11d.per cwt,for mash. Prices paid by individual units ranged from 12/3d. to 10/8d.per cwt. for pellets and from 11/8d. to 10/3d.per cwt.for mash. The higher prices were paid by small units. Individual preference for one or other type of food decided whether pellets or mash were used. The cost of stock at over a quarter of the total costs has now to be considered. This item is largely made up of the cost of stock purchased or transferred into the battery from home sources. Of the 3,144 birds added to the battery stock of these nine units during the year 79 per cent were pullets and 21 per cent were hens of varying ages. There was little difference between the purchase prices and home values of either hens or pullets; the average costs of hens and pullets from all sources were 3/1dt and 5/7id.per bird respectively, a difference of approximately 2/6(1. The average price realised for culls sold as table poultry was 2/1d.per bird; the average value of culls transferred out of the battery was 2/4-id. This gave an over-all average of2/2d.per bird, and indicates that there was a‘difference of about 1/0d.per hen and of 3/6d. per pullet between the incoming and outgoing values, provided that the birds were culled in good enough condition for sale or retention on the farm. As far as could be ascertained no price distinction was made between hen and pullet culls. In addition to the difference in value between a laying bird and a cull losses are introduced by deaths and by the fact that birds in the batteries at the end of the year have diminished in value to some extent. The effect of all these factors was to bring about an average depreciation per bird of 3/8id. The remaining item of cost of any great importance was that of labour. Over all the units labour amounted to some 13 per cent of the total cost and, of this, the proportions of paid and unpaid labour varied very widely, depending not so much on the size of the unit as on the individual conditions in which each unit was situated. 6. The distribution of the items on the receipts side -of Table I is very simple. Commercial eggs were the predominant item at 90.9 per cent of the total receipts and 18/8d.per laying bird. The two items for table poultry and stock may be taken together at 8.6 per cent.of the total and 1/9ad.per laying bird. Sundries, at 0.5 per cent and Iid.per laying bird, were negligible. With few exceptions it has not been possible to find any market for the sale of manure produced in batteries. Table I shows that after allowing for all expenses, including unpaid labour and interest on capital, there was an average net loss of 5id.per bird. By excluding the costs of unpaid labour and interest on capital, this loss is converted into a profit of 1/2i-doper bird. The variation between individual profits and losses was large. Including unpaid labour and interest on capital as costs, the range was from a profit of 3/8d.per bird to a loss of 10/10id.per bird; excluding these items, the range was from a profit of 4/3id.per bird to a loss of 5id.per bird. CAPITAL Nos mi. Table 11 shows the percentage distribution of capital, and the capital per laying bird on these nine . units. One point that must be remembered is that the figures do not represent the outlay required to set up in this system of egg production, but rather the capital values of going concerns in which some of the equipment is new, Some old, and in which some birds are pullets and some hens of varying ages. To set up with new-equipment and good young stock would entail a higher outlay. TABLE_ II D.ISTRIBUTION,OF CAPITAL Percentage Per Laying Bird All Units four Unit All Units Your Unit per cent per cent 5. d. s. d. Houses 31.0 5 1 Cages 38.0 6 0 Other equip. _ 4.7 r Total equip. 73.7 12 1 Stock 25.5 4 2 Supplies .8 li Total 100.0 100.0 16 4 The figures suggest that on going concerns the capital investment was just under 16/6d.per bird. Of this 12/1d.per bird or just under three quarters of the total capital was laid out in housing,cages and equipment. More than half the equipment capital was in cages at 6/2-ad.per bird, less than half in housing at 5/1d.per bird, and a small amount, 9i..d.per bird, in necessary accessories. Stock, at 4/2d.per laying bird, accounted for just over one quarter of the capital outlay. Supplies, tisually food, were negligible as it is seldom necessary to have more auan a few days' requirements on hand. Differences between the amounts of capital invested in the individual units were very marked and ranged from a total investment of 29/8id.per bird in a small but exceptionally well built and equipped modern unit to 11/10d. per laying bird in a large unit where the bouses have been in use for some years, had been converted from fixed laying houses and the cages were not of modern type. It must, however, be remembered that per laying bird figures are subject to the variations which may have taken place in the numbers of laying birds in the units. The variations in these numbers may be due to such causes as non-replacement of stock, the necessity of the cages being