260 Journal of Agricultural Economics.

F. G. Stuwock: I should like first of all to congratulate Mr. Lloyd on the excellent way he has

presented his paper. He has given his results in the form of budgets and the methods used are most ingenious. Many farmers will tell you that the hen is born in debt and dies in debt-and here we see it proved in figures.

There are one or two points I should like to make. In the first place, the budgets given seem to prove that if meal costs 37/- er cwt., a pullet costs 25/- and.eggs sell for 4/- a dozen, it is impossible to make a pro& from poultry. Indeed if the input-output relationships are as stated, there is nothing the farmer can do about it. Could he tell US how this connects up with what Professor Nash told us last night ? Apparently the price of eggs in Denmark is only 61 per cent. of the price here, but feedingstuffs cost about 90 per cent. of the price here. How then do the Danes manage to show a profit on their

The second point is this. I am inclined to regard budgeting as a form of economic model-linear programming if you like. I should, however, have felt more confident of his results if he had given us the actual results on the poultry farms investigated. If one uses economic models, the most satisfactory method is to make one set of assumptions, get one answer, make another set of assumptions and get another answer; then test these by showing that there are poultry-kee ers who are getting exactly these results. If so, i t proves that your model is correct. TL is particularly necessary when you are dealing with profits which are differences between fairly large figures. If there is an error in any of the assumptions, it will be greatly magnified in the profit.

The third point is the cost of pullets. Mr. Lloyd charges then at 251- each on the grounds that the farmer could have sold them, at point of lay, for this amount. This is quite a reasonable method if we regard the rearing flock and laying flock as separate enterprises.

Our own costings suggest, however, that a pullet could be reared for about 17/-. Thus if the laying flock is showing a loss, it should be remembered that the farmer who produces his own pullets has another rearing enterprise alongside it which is showing a profit something like 30 per cent. of the output.

D. H. Lloyd: The answer to your question about the Danish producer is fairly straightforward.

Last year he received an average price of 3/3 per dozen for his eggs. The average annual egg yield per bird in Danish commercial flocks is about 15 dozen, and consequently the income from eggs per bird is about 49/- per year. In the United Kingdom for comparison, the price of eggs was about 4/- per dozen, and the average yield of birds 12) dozen, giving an income from eggs of about 51/- per bird per year, or 2/- per year more than the Danish counterpart. We know that Danish foodstuffs are slightly cheaper than our own in this country, and that labour and replacement stock are less costly. Consequently the economies in outgoings achieved in this way produce a margin which apparently is sufficient to encourage the Danish farmer in the production of eggs.

The figures in Table VIII are of course based on facts supplied by a large number of costing investigations not only at Leeds. Many of the results are better than the standards shown and others correspondingly worse. Coming from a large number of sources one would expect the standards set to be fairly typical of normal farm practice. It so happens that I have had the experience of applying these standards in the field for advisory purposes on a number of occasions, and without exception I have been more than pleased with the accuracy of the budgets made.

I have expected some criticism of my choice of method in charging “ point of lay ” pullets a t their market value of 25/-. I feel that if the farmer is to get the maximum profit from his poultry enterprise, he must be prepared to divide the production process up into economic compartments. This is precisely what is done when it is considered whether a laying flock should be culled early in the spring when slaughter prices are good, or later in the summer when prices are lower. No one would criticise an economic calculation of that nature, but immediately the same principle is applied as between the rearing and laying periods, for some inexplicable reason, opposition may be aroused.

A t the present time it is possible and relatively easy to market a ‘ I point of lay ” pullet for at least 25/-, and in consequence, with rearing costs at not more than IS/- to 18/-, the profit on the process of rearing is good. It is wrong, to my way of thinking, that this profit on rearing should then be used to subsidise an uneconomic laying period. The laying flock should be capable of making a profit after allowing for a reasonable profit on the process of rearing the bird. This is my justification for placing the “point of lay ” pullet a t its market value when investigating the economics of the laying flock.

DISCUSSION ON MR. LLOYD’S PAPER.

poultry ?

Journal of Agricultural Economacs. 26 1

w. Cowley: This point of the pullet a t the point of lay is a very important one, because if all

farmers sold their pullets a t 25/- there would not be anyone left producing eggs. I think that Mr. Sturrock is right. I think we have got to take the cost of the production of the pullet at around IS/- to IS/-, and it is quite wrong to take it at 251-.

D. H. Lloyd: I think the point of what would happen if the whole community acted upon one

principle is irrelevant to the argument in this connection. In whatever economic facet of production you care to choose, mass reaction produces a complete change in the whole structure and economics of production, and may invalidate any economic conclusions previously reached for the individual or the community. It is only against the back- ground of a fairly stable production economy that we can interpret the results of the individual and the community with any degree of certainty.

G. K. R. Black: I should like to support Mr. Sturrock’s opening remarks in thanking Mr. Lloyd for

a most interesting paper in which he has brought together a great wealth of information. This is a paper which many of us who are engaged in the teaching of agricultural economics will wish to preserve for reference purposes. There is one matter I would like to raise, namely, labour requirements in poultry farming. In Table VIII figures are given of the total labour per bird per year for the major systems of poultry keeping. Taking the figures for what are described as “ typical flocks,” we notice that the battery system requires more labour than any other system. I have always been led to believe that the annual labour requirements of both the free range and fold unit systems were considerably in excess of the battery system. I would like to ask Mr. Lloyd, therefore, if he has assumed the same scale of production for each system in compiling his labour figures, or is the higher labour requirement for the battery system due to a small size of flock in Mr. Lloyd’s sample ? Mr. Lloyd gives no figures on average size of flock for the various systems in the sample of 68 flocks and it does seem to me that scale of production is every bit as important as the system of production in accounting for differences in labour requirements.

Miss H . C. McIvcr: Mr. Lloyd refers to the comparative amount of food required for small birds as against

large birds. I should like to mention that as far as egg production is concerned in deep litter and in batteries, the excitability of the light breeds and the light crosses has a bad effect on egg yield. The heavier breeds seem to be far more placid and their egg yield is far more regular from day to day, but with the light breeds they get upset sometimes from no apparent cause, or very slight cause, and the egg yield promptly drops heavily. I have also one case where a poultry farmer compared a light heavy cross with a heavy cross-it was actually Black Leghorn x Rhode Island Red and Rhode Island x Light Sussex-in the same battery and the latter cross did f a r better both from the point of view of health and from egg production.

A further point concerning mortality rates is that second year birds do not seem to be affected at all by the paralysis complex and I find that there is usually a f a r lower death and cull rate among second year birds, which means that their profits are compara- tively rather higher than for the first year birds. Then again, although Mr. Lloyd does not record any deaths in young stock from the paralysis complex, there is one variety of this which has been hitting birds between 8 and 12 weeks old in the last year or two. For example, I have had a flock with as much as 50 per cent. of loss from that cause alone at that age.

Referring to high egg production in early autumn, there is a method of achieving this by buying November hatched pullets, which are very strong chicks and rear quite easily, and which when kept in deep litter or batteries can be made to carry on laying throughout the autumn without a moult. This has been done for two or three years on the University farm and I have found commercial egg producers also doing it. It usually means careful adjustment of lighting and so forth but i t can be done and that means that you get good sized eggs just a t the high price time at the end of July, August and September.

P. M . Reason: I was interested to hear Mr. Lloyd’s acknowledgment that sometimes the returns

on poultry keeping worked out on the usual enterprise costing method show rather better results than those given in Table X, because I feel that this table presents a most extra- ordinarily gloomy picture of the industry, which is very hard to believe. If one looks at that table one is confronted with a bristling array of minus figures, and as far as one can

Journal of Agricultural Economics.

see one cannot make any money at all on battery production, whether the birds die or whether they are culled. There is now available uite a selection of University costings, and for the year 1952-53 the general level of proztability shown is anything from 20 to 40 per cent. Since then we have had a decline in egg prices. But on the other hand, there have been improvements in efficiency and a swing to intensive production, which I think Mr. Lloyd may underestimate in Table VI. Allowing for these factors I would say that although it will have declined since 1952-53, profitability will be at a distinctly better level than his daancial table suggests.

The gloomy trend running through his paper is perhaps summarised in the statement which maintains that if present conditions continue we may expect a steady decline in production. I don’t think that is borne out so far; the rate of increase in production has, of course, fallen off, but production is still increasing. There is little doubt that with the continuation of present conditions we could reasonably expect that production would stay up fairly well. Finally, I think Mr. Lloyd writes very much from the point of view of the producer. I want to put the consumer’s point of view, and protest that the consumer does not resist paying an economic price for his eggs; he resists paying an uneconomic price.

K. E. Hunt: Bearing in mind that poultry and eggs represent about one-fifth of the total vaiue

of ,livestock products, the available poultry statistics seem woefully inadequate. From each census we h a y the total numbers over six months and under six months, but we do not know what the under six months ” represent. Presumably the table buds which wil l never reach six months are included, together with pullets which may reach twenty- four months or thereabouts. Figures of the number of eggs put into incubators, the number of chicks hatched, and number of chicks ordered are scarce or non-existent. The American industry, for instance, has figures of the number of eggs going into incubators, the number of chicks hatched and even the number of orders placed.

The question of the effect of imports of eggs on prices is clear1 important but the evidence is not clear. Mr. Lloyd hints towards the end of his paper J a t the only method of raising wholesale prices appreciably lies in the restriction of imports of eggs. Restriction of imports presumably affects prices of home produced eggs but the critical question is, to what extent. Mr. Beilby did a study in the late thirties which showed that the effect of imported supplies on the prices of home produced eggs was not very great.

If you take the monthly supplies and price statistics in the period from the end of control up to last month and lot the quantities of home produced eggs going through packing stations against the wgolesale prices, you will h d that they fa l l pretty well on a smooth curve except for the first two months, hpril and May, 1953, that is, those immediately after de-control when things were unsettled. It would be unwise to press that too far, but it does rather look as if you could find a pretty complete explanation of the variations in home produced egg prices in the supplies of home produced eggs. The two months November and December, 1953, when there were substantial releases of imports, substantial in comparison with home produced supplies, are particularly interesting. One would have expected imported egg supplies to have pushed down the prices but there is little sign of this. If this is true it suggests that home produced and imported eggs do not compete for the same market. I believe there are some surveys which have hinted that housewives do quite openly look on home produced and imported eggs as two different articles, to be used for two different purposes-one to be put in an egg cup and the other one to be put in a pan or in a cake. If that is true, the surveys tend to link up with the price analyses.

Retail display methods for eggs vary greatly and they might lend themselves to the kind of experimental enquiry which Brunk has used for a variety of products at Cornell. The method needs careful handling but at least i t seems worth a trial to see what effect different display methods have on the quantity of the product which people will buy.

W. J. Thomas: I would like to congratulate Mr. Lloyd on the excellent piece of work which he has

given us. He has produced a paper which is entirely up-to-date and which has required a tremendous amount of calculation work in the time a t his disposal. It illustrates, too, that enterprise costs, properly used, can lead to most interesting and important conclusions.

There are some ‘points with which I disagree, particularly on the introduction of pullet replacements at 25/- per bird. I think it is necessary here to have the principles quite clear in our minds. If a poultry producer cannot rear a pullet at less than 25/-. then, obviously, i t is right to put it in at 25/- as Mr. Lloyd has done and, in that case, his conclusions are upheld about the relative economy of first and second year hens. But. in that situation, the proper place for this man is outside the poultry industry, and that

Journal of Agriczllturd Eoonomics. 263

is where he very soon will be on Mr. Lloyd’s figures ! If, on the other hand, this producer can obtain an alternative price of 25/- for this pullet, Mr. Lloyd, as an economist, is again right in presuming that it should be entered at 25/-. But again, the place for that producer is in the rearing of poultry replacements rather than in commercial egg production. I t would be wrong, however, to draw conclusions from this work that, taking the national farm as a whole, unit costs of egg production could be reduced by keeping hens to the second year rather than getting rid of them at the end of the fist year. In our own costings survey we find that the cost of rearing replacements is, on average, about 151- per head. If on the national farm you now introduce the pullets at 15/- it completely upsets the relationships which are found in Table X. In all groups, except the free range, you will find that rearing replacements every year would help to reduce unit costs of egg production.

Like Mr. Hunt, I wish it had been possible in this paper to devote time and space to illustrating some of the important relationships which we find in the economy of egg production. The most important and significant of these is the relationship between, yield per bud, proportion of winter eggs and profits. The achievement of high yields and a high ratio of winter eggs is obviously partly dependent on management but it must also be partly dependent on the inherent capacity of birds. There are very few commercial producers in this country who are able to buy pullet replacements from proven or progeny tested stock. Yet, this would seem to be the rational starting point for a profitable enterprise. I feel sure, that in a period of ten years, if we applied the principles of scientific selection to the improvement of our poultry stock we could help to improve materially the competitive position of the industry. A t a time when we are spending a very large amount in subsidy to egg producers, is it too much to ask that we should set aside some small part of th is sum to the improvement of the efficiency of the basic resources which we use ? It is, I think, much more important to help the industry in this way than to give the whole of the subsidy as an addition to egg prices. May we ask our friends a t the Ministry to bear this in mind when they come to fix prices at the next Annual Review ?

E . Dawson: I would like to add my congratulations to those of other speakers. I consider that the two previous speakers have been somewhat unfair. They implied

that Mr. Lloyd had been extremely negative when he came to the question of suggesting methods of improving efficiency. Actually he touched on this question of improvement through breeding, though admittedly he did not go into it in quite the same detail as Mr. Thomas has done. At the same time, I am a little uneasy about the formulation of one statement on breeding: viz. that “ Selection of a strain capable of giving a high output of eggs at low food consumption is of the first importance.” I think one could be forgiven for interpreting that as meaning that Mr. Lloyd is looking forward to the time when the poultry breeders will be able to produce a fowl that will have improved powers of digesting food, and of turning that food into eggs-more efficient digestive organs, and more efficient egg producing organs, in fact. But from my random reading I suspect that such a bird is completely mythical. The analogy of meat production is misleading. We have all seen the table showing the improved rate of conversion of food into meat of the bahy beef, as compared with the older animal. However, the meat is of different composition in the two cases; and if one looks at it in terms of energy input in relation to output, there isn’t any improvement in the actual rate of conversion. I think Hammond says that, so far as he knows, geneticists have not been able to bring about any improvement in the efficiency of the vital processes of the animal organism. The improvements that have occurred have been brought about by various indirect means, such as speeding up the rate of maturity. There is. however, one sense in which Mr. Lloyd’s statement is true. Higher egg production is a character which can be bred for, and if a higher output of eggs is obtained, then the maintenance ration is spread over a larger number of eggs and the result is to give more efficient conversion of food when the whole picture is taken into account.

Eric Rea: Although I am not an economist i t was most refreshing to find Mr. Lloyd reminding

us that we have not paid sufficient attention to the point the last speaker mentioned, namely, the food conversion ratio with poultry. Taking his own figures, we arrive at a conversion ratio of something like 6 to 1 based on an output of 121. dozen eggs from 114 lb. food a year. I would like to ask Mr. Lloyd if we ought not to include in the calculation the carcase value of the bird on culling, allowing, say, 4 lb. for the carcase. That would probably bring the conversion rate back t o something like 43 lb. Are we giving the hen credit for all she is doing ?

264 Journal of Agricultural Economics.

J . Hammond: I would like to ask two questions on this excellent paper and make one comment.

Mr. Lloyd says “ No charge has been made for a share of farm overheads or for litter, and no credit has been allowed for the manure produced.” Does he do that because he thinks they are self-balancing and c a t be ignored ?; or merely because he can’t get at it ? And again, I have written the word Why ” against “ Quick freezing of poultry has not developed to any considerable degree in this country.” I would like to know why that is so and whether anythmg could be done about it, because i t seems to me one of the best ways of selling poultry to the public a t the price they can afford to pay.

The comment I want to make is that, as far as I can see. in my part of the world, the South-West of England, most farmers are now convinced that egg production does not pay and most of them want to give it up; but their wives are determined that they shall not do so, and there is no prospect of their doing so even if the price of eggs fell 1/- a dozen I

P. Scola: Some of the gloom which people seem to see in this paper might be dissipated if Mr.

Lloyd took a different price. It might make quite a difference to the general picture if, instead of taking the packing station price for all eggs sold, we valued the large volume of non-packing station sales at a distinctly higher price.

One of the tables suggests that a larger number of people were keeping poultry in 1952 than before the war. That accords with evidence from the Ministry’s Agricultural Returns. but I believe the increase to be largely a paper one connected with rationing.

D. H . Lloyd:

b u t I am not in a position to say whether full adjustment has been made.

P. Scoh: Mr. Hunt wants more scratching around for information but there may be some

danger in scratching if it leads to the results shown in Table VI. I feel I should not criticise Dr. Cole’s figures when he is not present but I find it difficult to suppose that a representative enquiry would confirm the suggestion that as many birds are being kept in batteries as on deep litter. In Scotland a recent enquiry of a random sample of farmers showed that birds kept on deep litter outnumbered birds kept in cages by about 5 to 1.

T . A . Larmour: I would like to add my voice in congratulation to Mr. Lloyd for giving a paper which

we will want to refer to in our teaching, very often. To return to the labour problem, which I deem important, though representing only a small proportion of the total cost. Poultry in the United Kingdom are, generally speaking, kept by two distinct types of people-the specialist and the general farmer.

On the general farm the labour is either that of the farmer’s wife-a source usually unavailable except for poultry keeping-r the spare time of a workman necessary for the main enterprises on the farm, i.e. poultry is supplementing the main enterprises and so labour is not a direct charge on the poultry.

In Tables VIII, IX and X, taking deep litter as an example, the figures show one man as looking after 1,300-1.400 hens. The specialist poultry keeper could multiply that figure by two, in which case his labour would represent 51- per bird instead of lo/- i.e. a further 51- profit could be added to the present figure shown in the tables. If we add a further 616 profit on rearing, assumed about lS/6 and put in laying flock at 251-, then I think a lot of gloom disappears.

I think these figures prove that poultry kept as shown don’t pay, but these figures don’t give the true picture of how poultry are kept in the United Kingdom, and 50 it would be unwise to draw from them the gloomy conclusion that we can expect nothing but further decreases in poultry numbers.

Sir James Scott Watson: The place of poultry in the farm economy really ought to be looked at again. We

have had the point about the scale of the enterprise. I remember being in one of the commercial poultry areas in the United States and went to see a plant where all the food was in the top storey, with four tiers of birds underneath. All the watering, feeding and SO forth was automatic; the man was looking after 7,000 birds and. after 1o:fring round, I said to him, “ I cannot see what you do with your time.” His reply was, Well, I look around and I wring the neck of anything that doesn’t look too good.“ There is certainly scope for reducing labour by working on a large scale.

I understood the figures had been adjusted by the Ministry to take that into account,

Journal of Agrioultural Economics. 265

Then again, when I looked a t that figure of 371- a cwt., I thought of a visit I made to a friend in an arable area, and he was estimating the price a t which he could produce his feed. He was arranging to get his wheat back from a local mill, and he was going to use a considerable quantity of his own home-grown barley and oats, and his answer provisionally was 291- a cwt. A saving of 81- a cwt., or 101- a bird, brings you right out of the red. That raises the whole question of the status of the poultry industry. Can we look forward to the time when it will be a means whereby the corn farmer will get a bit more for his grain, or is it going to carry on as a traditional thing for the small farmer ? There is, of course, the point that under present conditions i t is the small man who most needs the enterprise, especially if his acres are too few to provide him with a living from the product of his own soil. I think there really are big questions for the future.

F. D. Mills: Previous speakers have been concerned with the gloominess of the picture that Mr.

Lloyd has portrayed for us this morning. The point I would like to make is also in con- nection with that probably unnecessary gloom, but it is rather a point of emphasis than anything else. I say it is a point of emphasis because although I do not feel that Mr. Lloyd, or indeed any other speaker so far, has drawn sufficient attention to it, they must all, I am sure, be aware of its general validity. The point is this-the treatment of costs in isolation is no doubt a suitable one for many purposes, e.g. the analysis of inputs and input-output relationships and so on, but when one is concerned with consideration of profitability, is it not a highly dangerous and inappropriate approach to treat the costs of an enterprise in isolation when that enterprise is closely integrated with others as it is on many British farms ? May it not be, therefore, that much of the gloom here is more apparent than real-a consequence in other words of this wrong approach rather than a n inalienable fact ?

D. H. Lloyd: Mr. Black raised the question of scale of production as it effects the labour utilisation

figures quoted. The standards were calculated from material relating mainly to flocks of 200-500 layers. The labour requirements of flocks generally decrease as the size of the unit increases, but it is only fair to say that the decrease is not of the large proportions one might expect. Convenience of layout may not improve with increasing flock size, and much of the labour, e.g. egg washing, egg collecting, etc., is not responsive to scale of operation.

He also comments on the relatively good labour utilisation of the Free Range and Fold Unit flocks indicated in this paper. This is accounted for by the assumption that all flocks were situated conveniently to the main farm buildings. Where flocks are kept a t a distance from the farm, the labour requirement may compare favourably with battery flocks.

Miss McIver suggested that the light breeds are not generally sufficiently placid for satisfactory production under intensive management systems. This is a generally accepted premise, but I have found the actual behaviour and performance of the light breeds to vary considerably with the strain of stock. Several instances are known to me where they have given very satisfactory results under intensive management conditions.

I have found no significant difference in the rate of mortality of 6rst and second year layers, but I am quite prepared to accept that the cause of mortality as between the two years may differ.

Mention was also made by Miss McIver of November hatched pullets. I have a little experience of such flocks, and under good management conditions they have shown up very well. Such flocks benefit from the high late summer and autumn egg prices. which may be missed by spring hatched stock. There is some danger of early hatched birds moulting in the autumn, but with good management the incidence of moult should not exceed 10 per cent. Another advantage of these early hatched flocks, is that the birds can be marketed a t the high spring cull prices after having laid for a complete year, or, alternatively. they may be kept for eighteen months, as they will lay for this period before a full autumn moult occurs.

Mr. Reason has stated that the paper paints a gloomy picture of laying flock finances. I would assure him that every effort has been made to ensure that the standards quoted represent typical results at the present time. The bristling array of minus figures may not look so bad to the individual producer, who may get some production factors a t less than their market value (e.g. labour).

Mr. Reason also commented that other Provincial Agricultural Economics Centres showed for 1952-53 far greater profits than those shown in Table X. My figures dealt with the year October, 1953-54, when egg prices were a t least 8d. per dozen lower. This

266 Journal of Agriculturd Economics. alone would reduce profits to the extent of at least 81- per bird. Also many economists charge both I ' point of lay " pullets and home grown foods at their costs of production, and this makes laying flock finances appear more attractive,

Mr. Reason saw no reason to believe that egg production would decrease in the future. In the last two years poultry numbers have declined without a drecease in egg production but there is now a larger percentage of older birds in flocks. Unless more replacements are hatched, I foresee a fall in fowl numbers and possibly in the average yield of the remaining birds.

He also feels that I may have underestimated the swing to intensification of manage- ment systems. If this is so, and the Ministry estimates of average national egg yield. with which I have tried to tie up my figures, are correct, then by the same reasoning I have also overestimated the average egg yields of the intensive systems, and therefore shown their finances in too favourable a light. This is a conclusion with which I am sure he would not agree. The increased productivity of birds in 1953-54 has been attributed by many expert authorities more to an excellent laying season than to an intensification of management systems. As to the consumer paying an uneconomic price for eggs, the nutrilitional authorities seem unanimous that the egg represents good value for money, and I am content to accept their expert opinion.

Mr. Hunt commented on the difficulties of management during the moult period, and of course these are very real. The uncertainty of production during this period of a bird's life is probably the reason why no sale market for layers exists a t the beginning of the second year of production.

He also commented on the small amount of statistics relating t o the poultry industry which are available. This is a serious deficiency. There are official estimates of eggs used for hatching, b u t to my knowledge no estimates are available of chicks hatched or the proportion of young stock used for laying flock replacements or for table purposes. Any rough calculation of these figures has been made more difficult by the discontinuation of the quarterly censuses of poultry numbers.

Mention was also made of the effect of imports on the prices of home produced eggs. With this subject in mind, I had made an estimate some while ago, aimed at showing the effect of changing market supplies on egg prices. For technical reason.1 confined the calculation to home produced large and standard eggs. In general terms I found that a change in the supply of these eggs of 1 per cent. altered the wholesale price by between )d. to 2d. per dozen. While we import only 15 to 20 per cent. of our total egg supplies, this proportion might prove sufficient to have considerable influence on the price of the home-produced product.

On the other hand, Mr. Hunt may be quite correct in thinking that the market for the home produced and imported eggs is, to some extent, separate, the latter being used for cooking. This was thought to be so in the pre-war years. However, the influence of rationing and difficulties of getting supplies has caused a certain interchangeability in use, and I think that this influence still largely persists. Consequently I would expect imported supplies to have a considerable depressing effect on the prices of home produced eggs-

That this did not occur in November, when large imports occurred, is probably an indication of nothing more than that these imports, occumng at this time, served only t o balance an existing consumer demand when home production was low.

The question of an attractive retail pack for eggs as a sales stimulant is worthy of mention. Although the housewive will not generally pay an increased price for an attractive pack, its use very often stimulates demand sufficiently to justify the increased expense.

The paper has been criticised for not indicating what could be done to improve flock finances. That I felt was not part of my job, but I do feel that many of the answers are self-evident from a study of the pa er. For example, the range of results shown in Table VIII indicates that it is possible gr an efficient producer to obtain quite good results. The procurement of good stock, good management, and close integration between the flock and the farm economy, together can ensure that the poultry unit makes a contribution to the profit of the parent farm.

Mr. Thomas has mentioned the difficulty of buying stock of known capacity and that there is only a limited quantity of high grade stock available. If the financial status of British producers is to be improved, much more attention should be given to the breeding of suitable stock, and to the marketing of the final products, as well as to the technical efficiency of the individual laying flocks.

The difficulty of getting stock of known performance is a result of the present Accredited Scheme. For registration as an Accredited Breeders Grade Flock it is necessary to average something like 170 eggs per bird per year. However, -4ccredited Commercial

Journal of Agricultural Economics. 267

Grade Flocks have no egg laying performance tests and these flocks, together with non- accredited hatching flocks, supply the vast majority of replacements for commercial laying flocks. It is thus not surprising that the egg laying performance of purchased stock is very variable.

In Denmark and the Netherlands the average yield of basic breeding flocks is nearer 220 eggs per bird per year, as compared with 170 eggs per bird per year in this country. This, together with a stringent hatchery policy, may account for the higher commercial laying flock yields found in those countries.

Mr. Dawson mentions the difficulties of improving stock through breeding, and states that it may well be impossible to alter the efficiency of the vital processes of the animal organism. While I am no geneticist, it does appear that there is a wide range in the food conversion ratios of poultry and it is only common sense to breed from the more efficient producers.

I agree entirely with Mr. Thomas that there is an urgent need for Government finance of projects for improving the efficiency of the industry. Dr. R. F. Gordon, of the Animal Health Trust, said recently that the annual Treasury allowance to cover all forms of poultry research was only ~lOO.000. There are many ways in which further grants, wisely spent, could yield large scale benefits.

Mr. Rea made the point that in calculating the food conversion ratio of the layer at 6 to 1, we do not give the bird credit for its production of meat. While this is correct, it is not as important as he suggests, for in its first year of production a bird does not usually gain more than # to 1 lb. in weight, and in the second year of production the increase in weight is negligible. To allow the whole weight of the carcase in calculating the food conversion ratio would be incorrect without including in the food consumption the weight of food eaten in the rearing process. Taking this a t 36 lb., the conversion ratio from hatching to the end of a bird’s first laying year would be about 6.1 to 1, and from hatching to the end of the second laying year about 6.2 to 1.

Mr. Hammond asked why I have not included anythmg for overheads, poultry manure and litter in my costings. Litter was not included because the amount used varied enormously with the availability of supply, and there was the difficulty in valuing it.

Overheads were ignored because I felt their inclusion might have had little justification in the concept of cost analysis of a unit in isolation. Except in the case of a specialist farm, the addition of a poultry flock to the farm economy does not materially affect the total farm overheads. In such a case, a charge for overheads would be both arbitrary and unrealistic. In the case of specialist poultry holdings, all overheads have to be carried by the poultry and a charge of 21- to 31- per bird would be justified.

The value of the manure produced varied with the system, how the manure was stored, and when it was applied to the land. Taking the average production as 2 cwt. of fresh droppings per bird per year, i t would be equivalent to 41- worth of fertilisers bought at current prices, less subsidy.

A number of farmers value poultry manure highly, but in some areas, such as in parts of the West Riding where there is a concentrated poultry population on small farms, and little arable land, farmers may actually have to pay for the removal of manure from their premises. Thus a credit for manure can only be applied in the light of the farm circumstances.

Mr. Hammond also asked why the deep freezing of poultry had not developed in this country. I believe that in the future there will be considerable development of this trade. The Farm Economics Branch a t Cambridge have produced figures on the economics of deep freezing by contract. Apparently it costs something like 117 to 1/9 per bird, for collection, slaughter, dressing, packing and quick freezing, and thereafter 4d. per month for storage. I t would thus appear that there is a good margin on deep freezing stock culled at times when slaughter prices are low, for release a t more favourable periods in the market. The deep freeze pack is an attractive one, and buyers are becoming increasingly aware of it. However, whether the process will serve to reduce the price of poultry meat to the customer as Mr. Hammond suggests, is a matter of conjecture.

In answering Mr. Scola’s remarks about the extent of the deep litter flocks in Scotland, I would point out that the figures in Table VI based on Dr. Cole’s material do in fact relate only to England and Wales. However, in my extension and adjustment of the figures for the footnote table on page 249, I have used a similar ratio of battery to deep litter birds, and I am indebted to him for the information in his point.

Mr. Scola also makes an important point when he suggests that D large proportion of eggs can be valued a t non-packing station sale prices, and this would contribute materially to improving the finances of many flocks. I t is estimated that only 64 per cent. of eggs laid in 1953 passed through packing station channels, and i t is reasonable t o suppose that the remaining eggs were marketed at higher prices.

268 Jourrcal of Agricultural Economics.

Mr. Larmour mentioned the specialist poultry keeper, and the effect of the labour economies of large scale production, on the roduction costs of the industry as a whole. I would remind him that the influence of &ese specialist flocks on the labour costs of the industry is not very great, as they represent only a small proportion of the poultry population. It is thought that less than one half of the 1 per cent. of flocks are in excess of 1,000 layers in size and they probably do not account for more than 8 per cent. of all poultry kept.

It has been my experience that many of the extreme labour economy figures quoted for large flocks are exaggerated, and that a good deal of casual help is required at intervals. Very often, in consequence of too much attention being paid to labour economy in large flocks, the technical and economic efficiency of the units suffer to an extent which largely nullifies the saving in labour costs.

Sir James Scott Watson told us of an actual unit he had visited in the United States, where a factory scale of operation had led to amazing labour economy. My comment is that such units, to be worked economically on labour, require very high capital invest- ment, and for this reason, the majority of farmers in this country could never contemplate such plants. One of the main reasons for the popularity of the new intensive systems has been the possibility of utilising existing farm resources, and though these may not be the most convenient plants to work, the capital investment involved is small.

Mr. Larmour does not expect the current decrease in poultry numbers to continue as flock finances are not as black as they appear from my costings. I base my prediction not on the economic conditions prevailing in the industry, but upon the recent statistics of poultry population. In the last year fowl numbers have fallen by abou; 7 million in the United Kingdom, and this decrease has been almost entirely in the fowls under 6 months,” i.e. the replacement stock category. Thus unless an increasing proportion of laying birds are kept into their second and later years of production, and an unusually large number of birds are hatched in the coming year, numbers will undoubtedly fall.

Sir James mentioned the margin on compounding foods. I have estimated that rations perfectly satisfactory for intensive management conditions can be mixed on the farm for as little as 32/- per cwt., or alternatively supplied mixed to the fanner’s speci- fication by contractors and food suppliers at about 3316. A t the present time, there does seem an increasing tendency for farmers to compound their own foods, and considerable economies can be achieved by the process.

Mr. Mills asked me whether there was any real justification for my concept of studying the laying unit in isolation from the rest of the farm economy.

I realise that the interpretation of such costings as this method reveals has its difficulties, but this is no less so than if the analysis of the economics of production had been made withii the framework of some average farm, for the relation of the laying unit to the parent farm, and the set-up of the parent farm itself, are subject to extreme variations. The method I have used shows clearly the factors which are involved in production, and they are so arranged that by a simple process of substitution of factors, a re-calculation of production economics for any particular situation is possible. I \kould agree with Mr. Mills that the financial status of the laying unit in many instances would not appear to be so gloomy when viewed as a part of the economy of the whole farm. I would be most careful about advising a farmer to discontinue egg production on the basis of a costing of the laying unit in isolation, without first examining the contribution which the unit is making to the total farm profit.

It must be remembered that many of the costs of production which are charged when costing an enterprise in isolation, may not in fact be real or out-of-pocket costs to a farmer if the enterprise is examined against the background of the farm economy. Some costs would have to be met irrespective of whether or not a poultry unit used them.

Finally I would like to give my thanks to all who have helped me in the preparation of this paper, particularly Mr. Boreham and Mr. Marks at the Ministry of Agriculture and Mr. Scola a t the Scottish Department of Agriculture. They have all provided statistics which have been most valuable. Also Mr. Kemp of the Yorkshire Egg Producers, and numerous feedingstuff firms, chick hatcheries and farmers who have provided the material on which this paper is based. My colleagues a t Leeds have been very helpful, particularly Mr. Wynne, who helped me to edit the rough draft of this paper. Lastly I would like to thank you all for the favourable reception given to it.