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Economic Evaluation of Controlled Environmental and Conventional Commercial Egg Production Systems in Georgia
EDUCATION AND PRODUCTION Economic Evaluation of Controlled Environmental and Conventional Commercial Egg Production Systems in Georgia G. CHRIS LANCE Department of Agricultural Economics, University of Georgia, College of Agriculture Experiment Stations, Georgia Station, Experiment, Georgia 30212 (Received for publication May 24, 1977)
INTRODUCTION T h e mild climate of t h e S o u t h e a s t c o n t r i b utes t o p r o d u c t i o n advantages over colder areas of t h e United States. E n v i r o n m e n t a l control is unnecessary in Georgia d u e t o mild winter t e m peratures, b u t p r o d u c t i o n efficiency can be improved b y using c o n t r o l l e d environmental houses during h o t s u m m e r t e m p e r a t u r e s and occasional e x t r e m e cold periods. T h e basic h o u s e structures for commercial egg p r o d u c t i o n listed according t o m o s t comm o n use in Georgia are 1) o p e n cage, 2) o p e n litter floor, 3) semi-controlled environmental, 4) controlled environmental, a n d 5) open wire floor houses. All of t h e above h o u s e s have o p e n sides with d r o p curtains e x c e p t t h e controlled environmental houses which have solid walls a n d baffle vents for air i n t a k e . Most houses have insulated roofs a n d s o m e of t h e controlled environmental houses have insulated sides. All of t h e housing systems have mechanical feeders and m a n u a l egg collection e x c e p t t h e controlled environmental a n d wire floor systems which have mechanical egg collection. Published information is limited o n physical and e c o n o m i c differences a m o n g alternative commercial egg housing systems. Variations of wire floor and nest systems were tested in Pennsylvania (Bressler et al., 1 9 7 4 ) . Effects of 1978 Poultry Sci 57:835-844
flock size a n d housing density on egg p r o d u c tion costs were analyzed in N o r t h Carolina for litter floor systems (Stemberger a n d Jasper, 1 9 6 4 ) . E c o n o m i c analyses were m a d e for litter floor, slatted floor, and cage systems in windowless houses in Pennsylvania (Michalson et al,, 1 9 6 6 ) . Costs and returns analyses for i n d e p e n d e n t a n d c o n t r a c t p r o d u c e r s were m a d e for conventional litter floor a n d o p e n cage systems in Georgia (Lance, 1 9 7 2 a , b ) . E c o n o m i c studies are n e e d e d t o evaluate physical efficiencies a n d estimate t h e e x t e n t t o which t h e additional cost of controlled e n v i r o n m e n t a l over o p e n cage p r o d u c t i o n systems c o n t r i b u t e s t o physical efficiency a n d t h e i m p a c t o n n e t returns. A commercial egg operation is c o n c e r n e d with p r o d u c i n g eggs for h u m a n c o n s u m p t i o n rather t h a n hatching eggs. Typical i n d e p e n d e n t table egg p r o d u c e r s as defined in this s t u d y p u r c h a s e 20-week old started pullets a n d c o m plete m i x e d feeds t h r o u g h retail o u t l e t s . Eggs are m a r k e t e d a t farms t o packer-buyers w h o haul t h e m t o packing plants. Producers are p a i d o n t h e estimated grade o u t or o n a grade yield-basis after eggs are washed and g r a d e d . P r o d u c t i o n costs for p r o d u c e r s w h o either raise pullets, m i x feed on t h e farm, process eggs a n d / o r m a r k e t graded eggs differ f r o m those s h o w n in this analysis.
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ABSTRACT The value of controlled environmental production systems for commercial eggs has economic implications for the Southeast. The primary objectives of this study were to determine physical and economic differences among commercial egg production systems. Production records were obtained by personal interview surveys for 200 flocks of commercial layers during the 1972 to 1975 period. Production records were analyzed with respect to strains of hens and production systems to evaluate both average performance flocks and high performance flocks. Production costs were developed by budgetary procedures for average and high performance flocks. The best feed conversion of 3.78 pounds per dozen was obtained from high performance flocks housed in the semi-controlled environmental cage system. There was a 1.5 cent per dozen cost saving to high performance producers using the semi-controlled environmental cage system compared with high performance flocks housed in open cage systems. Commercial egg producers in the Southeast can, however, improve production efficiency by using high producing strains of hens and improved management practices with existing open cage systems.
Per hen
2.17
2.80
3.50
3.80
2.80
3.50
3.72
House type
Open cage houses, manual operation
Open cage houses, mechanical feeders
Semi-controlled environmental cage houses, mechanical feeders
Controlled environmental, high rise flat deck cages, mechanical feeders, and egg belts
Controlled environmental houses, 4-tier cages, mechanical feeders, and egg collection
Open high rise wire floor houses, mechanical feeders, and egg belts
Litter floor, mechanical feeders, manual egg collection
111,600
105,000
84,000
114,000
105,000
84,000
65,100
(dollars)
30,000 hens
Investment 3
11,160
10,500
8,400
11,400
10,500
8,400
6,510
House loan repayment''
5,580
5,250
4,200
5,700
5,250
4,200
3,255
Interest c
1.050
1,050
2,120
2,120
2,120
1,050
900
Electricity
2,065
2,405
2,739
2,568
2,860
2,065
2,065
(dollars/year)
Repairs, taxes, and insurance -
1,530
1,530
1,530
1,530
1,530
1,530
1,530
Misc."
21,385
20,735
18,989
23,318
22,260
17,245
14,260
Total
TABLE 1 .—Commercial layer investment and annual operation costs, 30,000 hens, excluding labor, by type housing system, Georgia, 19753-
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.691
.633
.777
.742
.575
.475
Cost per hen e
1,100
3,000
3,000
3,000
2,750
2,750
2,500
Labor requirements (hens/manhr-day)
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COMMERCIAL EGG PRODUCTION SYSTEMS
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PROCEDURES
Labor. Labor requirements for regular daily chores for cage systems are largely determined by the type of equipment used regardless of the
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Data Collection. Production data and cost records were obtained from independent producers, contract producers, and integrated production and marketing firms by the personal interview survey method. Production records from over 200 flocks were collected during the 1972—75 period. Construction and annual operating costs records were obtained on seven of the most commonly used systems in Georgia (Table 1). Egg production, mortality, feed consumption, and miscellaneous costs were obtained for pullets started at 20-wks of age through a 365-day production period. Detailed information was also obtained on the advantages and operational problems of each system. Production records were first stratified by housing systems and strains of hens (Table 2). High performance flock production records with hen-day production rates of 70% and above were analyzed to compare production differences among average producing flocks and high performance flocks (Table 3). Budgets. Cost budgets, incorporating flock production records, were synthesized for each system. January 1975 prices for new houses and equipment were budgeted for each system (Table 1). Repayment costs of houses and equipment were prorated over a 10-year time span since most loans have to be repaid within this period and poultry facilities may have a short life due to obsolescence rather than depreciation. Production costs were developed for open cage, litter floor, wire floor, and controlled environmental cage systems (Table 4). Budgets for high performance flocks were developed for the open cage system and the semi-controlled environmental cage system (Tables 5 and 6). Production costs were budgeted at 6 different feed and pullet price combinations to reflect changing feed prices for future time periods in high performance budgets. We assumed that average performance budgets were more realistic for describing existing economic conditions for all producers. High performance budgets were assumed to be better measures of the potential of each system because of the variability in hen strains and management levels of current producers. Low productivity may be due to low producing hen strains and management factors rather than a fault of the system used.
Production (doz/hen) Feed conversion (lbs/doz) No. flocks observed
18.21 3.84 (2)
15.45 4.49 (2)
Production (doz/hen) Feed conversion (lbs/doz) No. flocks observed
19.42 3.68 (1)
17.65 4.51 (3)
17.55 4.22 (1)
20.38 3.78 (8)
Production (doz/hen) Feed conversion (lbs/hen) No. flocks observed
Production (doz/hen) Feed conversion (lbs/doz) No. flocks observed
19.44 3.94 (3)
17.21 4.49 (1)
21.79 4.22 (5)
Production (doz/hen) Feed conversion (lbs/doz) No. flocks observed
18.44 4.57 (4)
17.01 4.49 (4)
18.74 4.14 (4)
17.21 4.33 (8)
16.31 4.22 (27)
18.68 4.13 (26)
Production (doz/hen) Feed conversion (lbs/doz) No. flocks observed
Type housing 1
17.60 4.17 (6)
19.10 4.20 (1)
Open litter floor houses
17.84 4.89 (2)
Open wire floor houses
17.04 4.39 (32)
Open cages
17.93 3.81 (1)
Controlled environment 4-tier cages 0
16.55 4.48 (4)
Controlled environment flat deck cages
Semi-controlled environment cages 0
Strains
17.96 4.48 (9)
21.60 4.02 (3)
18.27 4.23 (5)
TABLE 2.—Average annual production rates and feed conversion by hen strain and type housing system, Georgia 1970—1974
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7.65
3.62
3.87
4.26
3.40
Cracked eggs
(%)
All strains
3.09
.98
1.2
1.43
1.56
Grading loss
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Average production rates per hen housed for individual flocks ranged from 16 doz to 22 doz over a period of 365 days starting at 20 wks of age. Average flock production of 18 doz per hen from the farm survey was lower than expected. When records were stratified, obvious differences among production systems and hen strains were shown (Table 2). For example, the average for all systems for strain " A " was 19.35 doz eggs per hen compared to 16.51 for strain "B", a difference of 2.84 doz per hen. The best feed conversion rates were shown for the semi-controlled environmental cages and controlled environmental four tier cage systems. High performance records were selected to include the flocks with 70% hen day production rate and better. Only 16% of the
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housing structure. Labor saving features reduce labor costs and increase investment costs. Thus, availability and cost of labor vs. availability and cost of credit are important considerations in the selection of equipment. Daily labor requirements from the farm survey for three basic combinations of feeding and egg collection systems in cage systems are 1) manual feeding and egg collection, 2500 hens/ man hr; 2) mechanical feeding and manual egg collection, 2750 hens/man hr; and 3) mechanical feeding and egg collection, 3000 hens/man hr. Labor requirement for the wire floor system with mechanical egg collection was 3000 hens/ man hr and litter floor system was only 1100 hens/man hr. These estimates do not include cleanout. Mechanical egg' belts save only the labor of walking aisles to collect eggs. Each still must be picked up individually and placed on flats. More labor may be required for mechanical belt systems than cart pickup systems, since belts have to run almost every hr to prevent overload and breakage of eggs. Fewer pickups may be required for cart pickup systems. The addition of mechanical flat loaders reduced labor requirements to 5000 to 7500 hens/man hr depending on the type packer used. Some producers object to mechanical flat loaders because of an increase in the number of cracked eggs, reported to vary from 4 to 16% by individual operators and types of packer. As mechanical features are added to the operation, labor with greater skill is required to repair and maintain equipment, and constant supervision is required to keep equipment in operation.
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V
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11.38
6
7 5 6
365
365 365 365 10.07 13.08 7.87
(%)
72.16 72.46 74.13
71.83
(%)
Hen day
68.52 67.96 71.11
67.72
(%)
Hens housed
Production rate c
20.84 20.67 21.63
20.60
Total (doz/hen)
22.73 24.85 25.86
24.30
Feeding rate (lbs/day/ 100 hens)
3.78 4.10 4.19
4.06
Feed conversion0" (lbs/doz)
Production records were tabulated from 20-wk of age through a 365-day production period.
Source: Farm survey.
Feed conversion rates include all feed fed from 20-wk of age through 365 days.
Hen day production was based on the average number of hens in the flock over the 365-day period; the hens housed production rate and total production per hen were based on the starting number of hens at 20-wk of age.
c
Flocks were selected with average hen day production of 70% and above. Flock records were obtained on only two strains of hens with average production rates as high as 70%. No records were available for the flocks with 70% and above production in the controlled environmentally high rise flat deck system or the controlled environmental four-tier cage system.
Open cage house Semi-controlled environmental cages Open wire floor houses Litter floor houses
Type system
Mortality
Flock records (no.)
Days from 20-wkb (no.)
TABLE 3 .—Average annual production per hen, selected high performance flocks, by type housing system, Georgia 1970-1974*
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COMMERCIAL EGG PRODUCTION SYSTEMS
841
TABLE 4.—Average annual commercial egg production costs, by housing system, independent operators, Georgia, 1975 Type housing systems 1
Open cage
Litter floor
Wire floor
Feed cost 0 Pullet depreciation*3 House and equipment 0 Interest on operating capital" Medication and miscellaneous Total farm cost (excluding labor) Labor e Total farm cost (including labor)
.319 .097 .032 .022 .006 .476 .015 .491
.333 .093 .037 .023 .006 .486 .034 .520
.326 .095 .037 .022 .006 .486 .013 .499
.308 .095 .042 .021 .006 .472 .013 .485
a Annual egg production and feed conversion by housing system were: 1) open cage 17.22, 4.26; 2) litter floor 19.17, 4.44; 3) wire floor 18.82,4.34; and 4) all controlled environmentally 18.37, 4.10. Feed was valued at $150 per ton and pullets at $2 each. House and equipment cost taken from Table 1. Interest charged on feed, pullets, medication, miscellaneous and labor cost for the first six mo of production period at 10% per annum. Interest ^n house investment included in Table 1. Labor requirements were reported by systems in number of hens per man-hr per day: 1) open cage 2750; 2) litter floor 1100; 3) wire floor 3000; and 4) controlled environmental 3000. Labor charged at $2 per hr.
flocks and only two strains of hens appeared in the high performance flocks. Within flocks with high performance records, the litter floor system had the highest production rate of 21.63 doz/hen housed, but this group also had the poorest feed conversion rate of 4.19 lb/doz (Table 3). The semi-controlled environmental cage system with manual egg collection had the best feed conversion of 3.78 lb/doz. Litter floor flocks had a 3.8% higher average production rate per hen per day than the semi-controlled environmental cage flocks but consumed 13.77% more feed. The cracked eggs and grading plant loss together equaled 4.60% of production of the semi-controlled environmental cage system, the system with least breakage of all studied (Table 2). The cracked egg and grading loss of 4.96% reported for the open cage system was slightly greater. The cracked egg and grading plant loss, due in part to mechanical egg collection and high hen density in cages, included 15.65% of the production of the four tier environmental cage system. Neither of the controlled environmental cage systems with mechanical egg collection appeared among the high performance
flocks (Table 3). Production Costs. Costs were estimated for flocks with average performances that were housed in open cages, litter floor, wire floor, and controlled environmentally cage systems (Table 4). Production costs per doz for the environmentally controlled cage systems were only .6i doz less than costs for open cage systems. Production costs for high performance flocks in open cages were 3.4^/doz less than average flocks in open cages and 2.8^/doz less than average flocks housed in controlled environmental cage systems (Table 5). But production costs from high performance flocks housed in the semi-controlled environmental cage system showed a 1.6^/doz decrease over high performance flocks housed in open cage systems (Table 6). DISCUSSION The production records and cost budgets indicate that more differences among commercial layer flocks in the Southeast may be attributed to differences among strain of hens and management ability of producers than to
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Cost items
Controlled environmental cage
842
LANCE TABLE 5.—Annual commercial egg production costs, independent operators, high performance flocks, open cage houses, Georgia*
Annual costs Amount
Prices
Production rate 0 Feed b Pullet c House and equipment" Interest on operating capital e Medication and miscellaneous' Total farm costs (excluding labor)? Labor h Total farm cost (including labor) 1
20.60 doz/hen 4.06 lbs/doz 30,000/flock $17,245 $8.65/hen $3,240 3,982 hr
$150/ton $2 each $.10 $2/hr
6.273 1.750 .575 .433 .108 9.139 .265 9.404
(Dollars/ doz)
.305 .085 .028 .021 .005 .444 .013 .457
Farm production costs at alternative feed prices
Feed prices
Pullet pricesJ
(dollais/ton)
(dollars/pul.)
75 100 125 175 200
1.50 1.67 1.84 2.17 2.35
Feed costs
Pullet costs
Interest on operating capital
Total farm cost1
New York large, break even price*
.152 .203 .254 .355 .406
.061 .069 .077 .093 .102
.012 .015 .017 .023 .026
.271 .333 .394 .517 .580
.421 .483 .544 .667 .730
Budget for open cage houses (3 hens per 1 0 " X 1 8 " cage) with mechanical feeding and manual egg collection. Eggs are marketed nest run at Georgia farms. Egg production and feed conversion rates reported from 6 high performance flocks with production rates of 70% per hen day for 365-day periods from 20-wk of age. Pullets were valued at $2 each with a salvage value of $.25. Mortality losses averaged 11.37%. Annual operating costs per hen included housing and equipment depreciation, interest, electricity, repairs, taxes, insurance, and miscellaneous expenses from Table 1. Interest charged on feed, pullets, medication, miscellaneous, and labor costs for first 6 mo of production period at 10% per annum, f Miscellaneous includes medication, oyster shells, grit, egg oil, and Georgia egg commission payment. Other miscellaneous included in building and equipment costs in Table 1. "Applicable to family operations with all labor provided by the family. Labor reported at 2,750 hens per man hour per day excluding clean-out. Total farm costs include feed, pullet, house equipment, interest, medication, miscellaneous, and labor. J
Pullet prices based on changes in feed prices.
Blend prices for all sizes of ungraded eggs sold nest run at Georgia farms were usually determined by deducting $.15/doz from the New York wholesale price for grade A large loose packed eggs.
differences a m o n g housing systems. Producers with open cage systems can improve p r o d u c t i o n efficiencies significantly b y using high p r o d u c -
ing strains of hens a n d t h e best m a n a g e m e n t practices. T h e greatest p r o d u c t i o n efficiencies for n e w p r o d u c e r s and for expansion can be
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Cost items
(Dollars/ hen)
COMMERCIAL EGG PRODUCTION SYSTEMS
843
TABLE 6.—Annual commercial egg production costs, independent operators, high performance flocks, semi-controlled environment houses, Georgia^ Annual costs Cost items
Amount
Prices
Production rate'> Feedb ' Pullet^ House and equipment^ Interest on operating capital e Medication and miscellaneous' Total farm costs (excluding labor)? Labor" Total farm costs (including labor) 1
20.84 doz/hen 3.781bs/doz 30,000/flock $22,260 $8.28/hen $3,240 3,982 hr/yr
$150/ton $2 each $.10 $2.00
(Dollars/ hen)
5.908 1.750 .742 .414 .108 8.922 .265 9.187
(Dollars/ doz)
.283 .084 .036 .020 .005 .428 .013 .441
Feed price
Pullet priceJ
(dollars/ton)
(dollars/pul.)
75 100 125 175 200
1.50 1.67 1.84 2.17 2.3 5
Feed1 cost
Pullet cost
Interest on operating capital
Total farm cost1
New York large, break even price*
.142 .189 .236 .331 .378
.060 .068 .076 .092 .101
.011 .014 .017 .022 .025
.267 .325 .383 .499 .558
.417 .475 .533 .649 .708
Budget for semi-controlled environmental houses with mechanical feeders, manual egg collection, and 4 hens per 12" X 1 8 " cage. Eggs are marketed nest run at Georgia farms. Egg production and feed conversion rates reported from 7 high performance flocks with production rates of 70% per hen day for 365-day periods from 20^wk of age. Pullets were valued at $2 each with a salvage value of $.25. Mortality losses averaged 10.07%. Annual ^operating costs per hen included housing and equipment depreciation, interest, electricity, repairs, taxes, insurance, and miscellaneous expenses from Table 1. Interest charged on feed, pullets, medication, miscellaneous, and labor costs for first 6 mo of production period at 10% per annum, f Miscellaneous includes medication, oyster shells, grit, egg oil, and Georgia egg commission payment. Other miscellaneous included in building and equipment costs in Table 1. ^Applicable to family operations with all labor provided by the family. Labor reported at 2,750 hens per man hour per day excluding clean-out. Total farm costs include feed, pullet, house, equipment, interest, medication, miscellaneous, and labor. •'Pullet prices based on changes in feed prices. Blend prices for all sizes of ungraded eggs sold nest run at Georgia farms were usually determined by deducting $.15/doz from the New York wholesale price for grade A large loose packed eggs.
o b t a i n e d from controlled environmental cage systems. T h e p r i m a r y e c o n o m i c benefits from semi-controlled environmental cage syst e m s are derived from improved feed conversion rates over conventional o p e n cage syst e m s . T h e r e is little advantage t o be gained
from environmental c o n t r o l b y average indep e n d e n t producers, b u t t o p p r o d u c e r s can reduce p r o d u c t i o n costs. M a x i m u m p r o d u c t i o n efficiency will n o t be realized unless o t h e r improved m a n a g e m e n t practices are also a d o p t e d . Records for t h e o p e n wire floor
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Farm production costs at alternative feed prices
LANCE
844
system d e m o n s t r a t e d high p r o d u c t i o n rates, b u t feed conversion was lower in cage syst e m s probably due t o m o r e feed wastage and exertion of energy by hens moving a r o u n d within wire floor houses. O p e n wire floor houses have good natural ventilation from u n d e r n e a t h as well as from t h e sides. With increasing energy costs, this system m a y have important future implications for energy conservation if feed conversion can be improved.
REFERENCES
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Bressler, G. O., T. W. Burr, and H. D. Bartlett, 1974. Sloping wire floors in poultry houses. The Pennsyl-
vania State University, Coll. of Agriculture, Agr. Exp. Sta., University Park, PA. Bull. 795. Lance, G. C , 1972a. Costs and returns analysis for independent commercial egg producers in Georgia. University of Georgia, Coll. of Agr. Exp. Sta., Res. Bull. 113. Lance, G. C , 1972b. Costs and returns analysis for contract commercial egg producers in Georgia. University of Georgia, Coll. of Agr. Exp. Sta., Res. Bull. 119. Michalson, E. L., R. H. McAlexander, and A. P. Stemberger, 1966. An economic analysis of alternative egg production systems. The Pennsylvania State University, Coll. of Agr., Agr. Exp. Sta., University Park, PA. Bull. 733. Stemberger, A. P., and W. J. Jasper, 1964. Effects of flock size and housing density on egg production costs. North Carolina State University, Raleigh, NC. A. E. Information Series 100.
INTRODUCTION T h e mild climate of t h e S o u t h e a s t c o n t r i b utes t o p r o d u c t i o n advantages over colder areas of t h e United States. E n v i r o n m e n t a l control is unnecessary in Georgia d u e t o mild winter t e m peratures, b u t p r o d u c t i o n efficiency can be improved b y using c o n t r o l l e d environmental houses during h o t s u m m e r t e m p e r a t u r e s and occasional e x t r e m e cold periods. T h e basic h o u s e structures for commercial egg p r o d u c t i o n listed according t o m o s t comm o n use in Georgia are 1) o p e n cage, 2) o p e n litter floor, 3) semi-controlled environmental, 4) controlled environmental, a n d 5) open wire floor houses. All of t h e above h o u s e s have o p e n sides with d r o p curtains e x c e p t t h e controlled environmental houses which have solid walls a n d baffle vents for air i n t a k e . Most houses have insulated roofs a n d s o m e of t h e controlled environmental houses have insulated sides. All of t h e housing systems have mechanical feeders and m a n u a l egg collection e x c e p t t h e controlled environmental a n d wire floor systems which have mechanical egg collection. Published information is limited o n physical and e c o n o m i c differences a m o n g alternative commercial egg housing systems. Variations of wire floor and nest systems were tested in Pennsylvania (Bressler et al., 1 9 7 4 ) . Effects of 1978 Poultry Sci 57:835-844
flock size a n d housing density on egg p r o d u c tion costs were analyzed in N o r t h Carolina for litter floor systems (Stemberger a n d Jasper, 1 9 6 4 ) . E c o n o m i c analyses were m a d e for litter floor, slatted floor, and cage systems in windowless houses in Pennsylvania (Michalson et al,, 1 9 6 6 ) . Costs and returns analyses for i n d e p e n d e n t a n d c o n t r a c t p r o d u c e r s were m a d e for conventional litter floor a n d o p e n cage systems in Georgia (Lance, 1 9 7 2 a , b ) . E c o n o m i c studies are n e e d e d t o evaluate physical efficiencies a n d estimate t h e e x t e n t t o which t h e additional cost of controlled e n v i r o n m e n t a l over o p e n cage p r o d u c t i o n systems c o n t r i b u t e s t o physical efficiency a n d t h e i m p a c t o n n e t returns. A commercial egg operation is c o n c e r n e d with p r o d u c i n g eggs for h u m a n c o n s u m p t i o n rather t h a n hatching eggs. Typical i n d e p e n d e n t table egg p r o d u c e r s as defined in this s t u d y p u r c h a s e 20-week old started pullets a n d c o m plete m i x e d feeds t h r o u g h retail o u t l e t s . Eggs are m a r k e t e d a t farms t o packer-buyers w h o haul t h e m t o packing plants. Producers are p a i d o n t h e estimated grade o u t or o n a grade yield-basis after eggs are washed and g r a d e d . P r o d u c t i o n costs for p r o d u c e r s w h o either raise pullets, m i x feed on t h e farm, process eggs a n d / o r m a r k e t graded eggs differ f r o m those s h o w n in this analysis.
835
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ABSTRACT The value of controlled environmental production systems for commercial eggs has economic implications for the Southeast. The primary objectives of this study were to determine physical and economic differences among commercial egg production systems. Production records were obtained by personal interview surveys for 200 flocks of commercial layers during the 1972 to 1975 period. Production records were analyzed with respect to strains of hens and production systems to evaluate both average performance flocks and high performance flocks. Production costs were developed by budgetary procedures for average and high performance flocks. The best feed conversion of 3.78 pounds per dozen was obtained from high performance flocks housed in the semi-controlled environmental cage system. There was a 1.5 cent per dozen cost saving to high performance producers using the semi-controlled environmental cage system compared with high performance flocks housed in open cage systems. Commercial egg producers in the Southeast can, however, improve production efficiency by using high producing strains of hens and improved management practices with existing open cage systems.
Per hen
2.17
2.80
3.50
3.80
2.80
3.50
3.72
House type
Open cage houses, manual operation
Open cage houses, mechanical feeders
Semi-controlled environmental cage houses, mechanical feeders
Controlled environmental, high rise flat deck cages, mechanical feeders, and egg belts
Controlled environmental houses, 4-tier cages, mechanical feeders, and egg collection
Open high rise wire floor houses, mechanical feeders, and egg belts
Litter floor, mechanical feeders, manual egg collection
111,600
105,000
84,000
114,000
105,000
84,000
65,100
(dollars)
30,000 hens
Investment 3
11,160
10,500
8,400
11,400
10,500
8,400
6,510
House loan repayment''
5,580
5,250
4,200
5,700
5,250
4,200
3,255
Interest c
1.050
1,050
2,120
2,120
2,120
1,050
900
Electricity
2,065
2,405
2,739
2,568
2,860
2,065
2,065
(dollars/year)
Repairs, taxes, and insurance -
1,530
1,530
1,530
1,530
1,530
1,530
1,530
Misc."
21,385
20,735
18,989
23,318
22,260
17,245
14,260
Total
TABLE 1 .—Commercial layer investment and annual operation costs, 30,000 hens, excluding labor, by type housing system, Georgia, 19753-
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.691
.633
.777
.742
.575
.475
Cost per hen e
1,100
3,000
3,000
3,000
2,750
2,750
2,500
Labor requirements (hens/manhr-day)
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COMMERCIAL EGG PRODUCTION SYSTEMS
837
PROCEDURES
Labor. Labor requirements for regular daily chores for cage systems are largely determined by the type of equipment used regardless of the
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Data Collection. Production data and cost records were obtained from independent producers, contract producers, and integrated production and marketing firms by the personal interview survey method. Production records from over 200 flocks were collected during the 1972—75 period. Construction and annual operating costs records were obtained on seven of the most commonly used systems in Georgia (Table 1). Egg production, mortality, feed consumption, and miscellaneous costs were obtained for pullets started at 20-wks of age through a 365-day production period. Detailed information was also obtained on the advantages and operational problems of each system. Production records were first stratified by housing systems and strains of hens (Table 2). High performance flock production records with hen-day production rates of 70% and above were analyzed to compare production differences among average producing flocks and high performance flocks (Table 3). Budgets. Cost budgets, incorporating flock production records, were synthesized for each system. January 1975 prices for new houses and equipment were budgeted for each system (Table 1). Repayment costs of houses and equipment were prorated over a 10-year time span since most loans have to be repaid within this period and poultry facilities may have a short life due to obsolescence rather than depreciation. Production costs were developed for open cage, litter floor, wire floor, and controlled environmental cage systems (Table 4). Budgets for high performance flocks were developed for the open cage system and the semi-controlled environmental cage system (Tables 5 and 6). Production costs were budgeted at 6 different feed and pullet price combinations to reflect changing feed prices for future time periods in high performance budgets. We assumed that average performance budgets were more realistic for describing existing economic conditions for all producers. High performance budgets were assumed to be better measures of the potential of each system because of the variability in hen strains and management levels of current producers. Low productivity may be due to low producing hen strains and management factors rather than a fault of the system used.
Production (doz/hen) Feed conversion (lbs/doz) No. flocks observed
18.21 3.84 (2)
15.45 4.49 (2)
Production (doz/hen) Feed conversion (lbs/doz) No. flocks observed
19.42 3.68 (1)
17.65 4.51 (3)
17.55 4.22 (1)
20.38 3.78 (8)
Production (doz/hen) Feed conversion (lbs/hen) No. flocks observed
Production (doz/hen) Feed conversion (lbs/doz) No. flocks observed
19.44 3.94 (3)
17.21 4.49 (1)
21.79 4.22 (5)
Production (doz/hen) Feed conversion (lbs/doz) No. flocks observed
18.44 4.57 (4)
17.01 4.49 (4)
18.74 4.14 (4)
17.21 4.33 (8)
16.31 4.22 (27)
18.68 4.13 (26)
Production (doz/hen) Feed conversion (lbs/doz) No. flocks observed
Type housing 1
17.60 4.17 (6)
19.10 4.20 (1)
Open litter floor houses
17.84 4.89 (2)
Open wire floor houses
17.04 4.39 (32)
Open cages
17.93 3.81 (1)
Controlled environment 4-tier cages 0
16.55 4.48 (4)
Controlled environment flat deck cages
Semi-controlled environment cages 0
Strains
17.96 4.48 (9)
21.60 4.02 (3)
18.27 4.23 (5)
TABLE 2.—Average annual production rates and feed conversion by hen strain and type housing system, Georgia 1970—1974
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7.65
3.62
3.87
4.26
3.40
Cracked eggs
(%)
All strains
3.09
.98
1.2
1.43
1.56
Grading loss
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Average production rates per hen housed for individual flocks ranged from 16 doz to 22 doz over a period of 365 days starting at 20 wks of age. Average flock production of 18 doz per hen from the farm survey was lower than expected. When records were stratified, obvious differences among production systems and hen strains were shown (Table 2). For example, the average for all systems for strain " A " was 19.35 doz eggs per hen compared to 16.51 for strain "B", a difference of 2.84 doz per hen. The best feed conversion rates were shown for the semi-controlled environmental cages and controlled environmental four tier cage systems. High performance records were selected to include the flocks with 70% hen day production rate and better. Only 16% of the
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housing structure. Labor saving features reduce labor costs and increase investment costs. Thus, availability and cost of labor vs. availability and cost of credit are important considerations in the selection of equipment. Daily labor requirements from the farm survey for three basic combinations of feeding and egg collection systems in cage systems are 1) manual feeding and egg collection, 2500 hens/ man hr; 2) mechanical feeding and manual egg collection, 2750 hens/man hr; and 3) mechanical feeding and egg collection, 3000 hens/man hr. Labor requirement for the wire floor system with mechanical egg collection was 3000 hens/ man hr and litter floor system was only 1100 hens/man hr. These estimates do not include cleanout. Mechanical egg' belts save only the labor of walking aisles to collect eggs. Each still must be picked up individually and placed on flats. More labor may be required for mechanical belt systems than cart pickup systems, since belts have to run almost every hr to prevent overload and breakage of eggs. Fewer pickups may be required for cart pickup systems. The addition of mechanical flat loaders reduced labor requirements to 5000 to 7500 hens/man hr depending on the type packer used. Some producers object to mechanical flat loaders because of an increase in the number of cracked eggs, reported to vary from 4 to 16% by individual operators and types of packer. As mechanical features are added to the operation, labor with greater skill is required to repair and maintain equipment, and constant supervision is required to keep equipment in operation.
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11.38
6
7 5 6
365
365 365 365 10.07 13.08 7.87
(%)
72.16 72.46 74.13
71.83
(%)
Hen day
68.52 67.96 71.11
67.72
(%)
Hens housed
Production rate c
20.84 20.67 21.63
20.60
Total (doz/hen)
22.73 24.85 25.86
24.30
Feeding rate (lbs/day/ 100 hens)
3.78 4.10 4.19
4.06
Feed conversion0" (lbs/doz)
Production records were tabulated from 20-wk of age through a 365-day production period.
Source: Farm survey.
Feed conversion rates include all feed fed from 20-wk of age through 365 days.
Hen day production was based on the average number of hens in the flock over the 365-day period; the hens housed production rate and total production per hen were based on the starting number of hens at 20-wk of age.
c
Flocks were selected with average hen day production of 70% and above. Flock records were obtained on only two strains of hens with average production rates as high as 70%. No records were available for the flocks with 70% and above production in the controlled environmentally high rise flat deck system or the controlled environmental four-tier cage system.
Open cage house Semi-controlled environmental cages Open wire floor houses Litter floor houses
Type system
Mortality
Flock records (no.)
Days from 20-wkb (no.)
TABLE 3 .—Average annual production per hen, selected high performance flocks, by type housing system, Georgia 1970-1974*
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COMMERCIAL EGG PRODUCTION SYSTEMS
841
TABLE 4.—Average annual commercial egg production costs, by housing system, independent operators, Georgia, 1975 Type housing systems 1
Open cage
Litter floor
Wire floor
Feed cost 0 Pullet depreciation*3 House and equipment 0 Interest on operating capital" Medication and miscellaneous Total farm cost (excluding labor) Labor e Total farm cost (including labor)
.319 .097 .032 .022 .006 .476 .015 .491
.333 .093 .037 .023 .006 .486 .034 .520
.326 .095 .037 .022 .006 .486 .013 .499
.308 .095 .042 .021 .006 .472 .013 .485
a Annual egg production and feed conversion by housing system were: 1) open cage 17.22, 4.26; 2) litter floor 19.17, 4.44; 3) wire floor 18.82,4.34; and 4) all controlled environmentally 18.37, 4.10. Feed was valued at $150 per ton and pullets at $2 each. House and equipment cost taken from Table 1. Interest charged on feed, pullets, medication, miscellaneous and labor cost for the first six mo of production period at 10% per annum. Interest ^n house investment included in Table 1. Labor requirements were reported by systems in number of hens per man-hr per day: 1) open cage 2750; 2) litter floor 1100; 3) wire floor 3000; and 4) controlled environmental 3000. Labor charged at $2 per hr.
flocks and only two strains of hens appeared in the high performance flocks. Within flocks with high performance records, the litter floor system had the highest production rate of 21.63 doz/hen housed, but this group also had the poorest feed conversion rate of 4.19 lb/doz (Table 3). The semi-controlled environmental cage system with manual egg collection had the best feed conversion of 3.78 lb/doz. Litter floor flocks had a 3.8% higher average production rate per hen per day than the semi-controlled environmental cage flocks but consumed 13.77% more feed. The cracked eggs and grading plant loss together equaled 4.60% of production of the semi-controlled environmental cage system, the system with least breakage of all studied (Table 2). The cracked egg and grading loss of 4.96% reported for the open cage system was slightly greater. The cracked egg and grading plant loss, due in part to mechanical egg collection and high hen density in cages, included 15.65% of the production of the four tier environmental cage system. Neither of the controlled environmental cage systems with mechanical egg collection appeared among the high performance
flocks (Table 3). Production Costs. Costs were estimated for flocks with average performances that were housed in open cages, litter floor, wire floor, and controlled environmentally cage systems (Table 4). Production costs per doz for the environmentally controlled cage systems were only .6i doz less than costs for open cage systems. Production costs for high performance flocks in open cages were 3.4^/doz less than average flocks in open cages and 2.8^/doz less than average flocks housed in controlled environmental cage systems (Table 5). But production costs from high performance flocks housed in the semi-controlled environmental cage system showed a 1.6^/doz decrease over high performance flocks housed in open cage systems (Table 6). DISCUSSION The production records and cost budgets indicate that more differences among commercial layer flocks in the Southeast may be attributed to differences among strain of hens and management ability of producers than to
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Cost items
Controlled environmental cage
842
LANCE TABLE 5.—Annual commercial egg production costs, independent operators, high performance flocks, open cage houses, Georgia*
Annual costs Amount
Prices
Production rate 0 Feed b Pullet c House and equipment" Interest on operating capital e Medication and miscellaneous' Total farm costs (excluding labor)? Labor h Total farm cost (including labor) 1
20.60 doz/hen 4.06 lbs/doz 30,000/flock $17,245 $8.65/hen $3,240 3,982 hr
$150/ton $2 each $.10 $2/hr
6.273 1.750 .575 .433 .108 9.139 .265 9.404
(Dollars/ doz)
.305 .085 .028 .021 .005 .444 .013 .457
Farm production costs at alternative feed prices
Feed prices
Pullet pricesJ
(dollais/ton)
(dollars/pul.)
75 100 125 175 200
1.50 1.67 1.84 2.17 2.35
Feed costs
Pullet costs
Interest on operating capital
Total farm cost1
New York large, break even price*
.152 .203 .254 .355 .406
.061 .069 .077 .093 .102
.012 .015 .017 .023 .026
.271 .333 .394 .517 .580
.421 .483 .544 .667 .730
Budget for open cage houses (3 hens per 1 0 " X 1 8 " cage) with mechanical feeding and manual egg collection. Eggs are marketed nest run at Georgia farms. Egg production and feed conversion rates reported from 6 high performance flocks with production rates of 70% per hen day for 365-day periods from 20-wk of age. Pullets were valued at $2 each with a salvage value of $.25. Mortality losses averaged 11.37%. Annual operating costs per hen included housing and equipment depreciation, interest, electricity, repairs, taxes, insurance, and miscellaneous expenses from Table 1. Interest charged on feed, pullets, medication, miscellaneous, and labor costs for first 6 mo of production period at 10% per annum, f Miscellaneous includes medication, oyster shells, grit, egg oil, and Georgia egg commission payment. Other miscellaneous included in building and equipment costs in Table 1. "Applicable to family operations with all labor provided by the family. Labor reported at 2,750 hens per man hour per day excluding clean-out. Total farm costs include feed, pullet, house equipment, interest, medication, miscellaneous, and labor. J
Pullet prices based on changes in feed prices.
Blend prices for all sizes of ungraded eggs sold nest run at Georgia farms were usually determined by deducting $.15/doz from the New York wholesale price for grade A large loose packed eggs.
differences a m o n g housing systems. Producers with open cage systems can improve p r o d u c t i o n efficiencies significantly b y using high p r o d u c -
ing strains of hens a n d t h e best m a n a g e m e n t practices. T h e greatest p r o d u c t i o n efficiencies for n e w p r o d u c e r s and for expansion can be
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Cost items
(Dollars/ hen)
COMMERCIAL EGG PRODUCTION SYSTEMS
843
TABLE 6.—Annual commercial egg production costs, independent operators, high performance flocks, semi-controlled environment houses, Georgia^ Annual costs Cost items
Amount
Prices
Production rate'> Feedb ' Pullet^ House and equipment^ Interest on operating capital e Medication and miscellaneous' Total farm costs (excluding labor)? Labor" Total farm costs (including labor) 1
20.84 doz/hen 3.781bs/doz 30,000/flock $22,260 $8.28/hen $3,240 3,982 hr/yr
$150/ton $2 each $.10 $2.00
(Dollars/ hen)
5.908 1.750 .742 .414 .108 8.922 .265 9.187
(Dollars/ doz)
.283 .084 .036 .020 .005 .428 .013 .441
Feed price
Pullet priceJ
(dollars/ton)
(dollars/pul.)
75 100 125 175 200
1.50 1.67 1.84 2.17 2.3 5
Feed1 cost
Pullet cost
Interest on operating capital
Total farm cost1
New York large, break even price*
.142 .189 .236 .331 .378
.060 .068 .076 .092 .101
.011 .014 .017 .022 .025
.267 .325 .383 .499 .558
.417 .475 .533 .649 .708
Budget for semi-controlled environmental houses with mechanical feeders, manual egg collection, and 4 hens per 12" X 1 8 " cage. Eggs are marketed nest run at Georgia farms. Egg production and feed conversion rates reported from 7 high performance flocks with production rates of 70% per hen day for 365-day periods from 20^wk of age. Pullets were valued at $2 each with a salvage value of $.25. Mortality losses averaged 10.07%. Annual ^operating costs per hen included housing and equipment depreciation, interest, electricity, repairs, taxes, insurance, and miscellaneous expenses from Table 1. Interest charged on feed, pullets, medication, miscellaneous, and labor costs for first 6 mo of production period at 10% per annum, f Miscellaneous includes medication, oyster shells, grit, egg oil, and Georgia egg commission payment. Other miscellaneous included in building and equipment costs in Table 1. ^Applicable to family operations with all labor provided by the family. Labor reported at 2,750 hens per man hour per day excluding clean-out. Total farm costs include feed, pullet, house, equipment, interest, medication, miscellaneous, and labor. •'Pullet prices based on changes in feed prices. Blend prices for all sizes of ungraded eggs sold nest run at Georgia farms were usually determined by deducting $.15/doz from the New York wholesale price for grade A large loose packed eggs.
o b t a i n e d from controlled environmental cage systems. T h e p r i m a r y e c o n o m i c benefits from semi-controlled environmental cage syst e m s are derived from improved feed conversion rates over conventional o p e n cage syst e m s . T h e r e is little advantage t o be gained
from environmental c o n t r o l b y average indep e n d e n t producers, b u t t o p p r o d u c e r s can reduce p r o d u c t i o n costs. M a x i m u m p r o d u c t i o n efficiency will n o t be realized unless o t h e r improved m a n a g e m e n t practices are also a d o p t e d . Records for t h e o p e n wire floor
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Farm production costs at alternative feed prices
LANCE
844
system d e m o n s t r a t e d high p r o d u c t i o n rates, b u t feed conversion was lower in cage syst e m s probably due t o m o r e feed wastage and exertion of energy by hens moving a r o u n d within wire floor houses. O p e n wire floor houses have good natural ventilation from u n d e r n e a t h as well as from t h e sides. With increasing energy costs, this system m a y have important future implications for energy conservation if feed conversion can be improved.
REFERENCES
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Bressler, G. O., T. W. Burr, and H. D. Bartlett, 1974. Sloping wire floors in poultry houses. The Pennsyl-
vania State University, Coll. of Agriculture, Agr. Exp. Sta., University Park, PA. Bull. 795. Lance, G. C , 1972a. Costs and returns analysis for independent commercial egg producers in Georgia. University of Georgia, Coll. of Agr. Exp. Sta., Res. Bull. 113. Lance, G. C , 1972b. Costs and returns analysis for contract commercial egg producers in Georgia. University of Georgia, Coll. of Agr. Exp. Sta., Res. Bull. 119. Michalson, E. L., R. H. McAlexander, and A. P. Stemberger, 1966. An economic analysis of alternative egg production systems. The Pennsylvania State University, Coll. of Agr., Agr. Exp. Sta., University Park, PA. Bull. 733. Stemberger, A. P., and W. J. Jasper, 1964. Effects of flock size and housing density on egg production costs. North Carolina State University, Raleigh, NC. A. E. Information Series 100.