Economic Comparison of Independent and Contract Turkey Family Farm Operations in Georgia

Abstract

The Georgia turkey industry is made up of a mixture of integrated producers, small independent producers and contract producers. The primary objective of this report was to present costs information relative to typical independent and contract turkey operations. An additional objective was to examine variations in costs due to variations in production levels and feed prices.Most of the data used in this analysis were obtained by personal interview from a random sample of turkey producers. Data were obtained on 1972 production of 89 flocks with a total volume of over one million turkeys. Budgetary procedures were used to budget costs and returns for average independent and contract operations and variability in costs was analyzed by production levels. Production costs were also estimated by allowing feed prices to change by $10 intervals from $90 to $200 per ton.Average production costs, excluding land and operator labor, for turkeys marketed by independent producers during 1972 were estimated at $0.2278 for 25.09-pound toms and $0.2178 for 14.77-pound hens.Average returns to land and labor were estimated for 25-pound tom turkeys marketed during 1972: (1) independent operations, $0.1807; (2) profit share contract, $0.2704 and (3) base pay and bonuses contract, $0.1656.These analyses show that differences in production cost were large enough to account for the success or failure of the turkey enterprise at 1972 turkey market prices.