Publisher's Synopsis
Excerpt from A Comparison of Returns to Poultry Growers Under Contract, Operating Independently
The organization of the poultry industry has changed considerably in the past 20 years. A major development is the increasing use of contracts to coordinate the various activities involved in production and marketing of poultry products. Latest estimates are that probably 95 percent of the chicken broilers, 50 to 60 percent of the turkeys, and 30 to 35 percent of the eggs are produced-under some type of contractual arrangement between the grower and other firms associated with the industry; The type of contract used almost exclusive in broiler production and most frequently in turkey and egg production is one in which all or most of the price risk is assumed by the contracting firm, The contractor furnishes the chickens or turkeys and the feed, and retains owner ship of these production inputs. The grower furnishes housing, equipment, and labor. Other production items may be furnished by either party depending on the individual contract.
Contractors want contracts that promote efficient production of quality products, and growers want contracts that will provide them a satisfactory return for their labor and other inputs. Contracts have been used for more than 20 years in certain segments of the poultry industry, but changes in these contracts over time indicate a need for continuing evaluation.
The main objective of the study reported here was to estimate returns to growers under different types of contracts with various combinations of prices and other factors that influence grower returns. Another objective was to com pare the returns to contract growers with returns to independent growers.
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