The Economics of Producing Market Turkeys

Abstract

This study determined: 1) The capital investment in land, buildings, and equipment and machinery for producing market turkeys as related to enterprise size; 2) the cost per pound to produce Broad-Breasted Bronze toms, hens, and mixed flocks as related to management system (brooding and range rearing from day-old poults vs. range rearing eight-week-old started poults), flock size, and number of flocks per year; 3) the amount and relative importance of variable and fixed cost items of production; 4) the effect of feed conversion efficiency, mortality rate, market age and weight, and utilization of brooding capacity on production costs; and 5) the identity and importance of factors accounting for economies of scale.Five hypothetical models (5, 10, 20, 30, and 50 thousand birds), with size based on brooding capacity or number of started poults placed on range at one time, and 1 or 2 flocks per year, were designed using the synthetic method. Budget standards (for physical facilities and inputs) and flock management practices reflected recommendations of Midwest poultry scientists and costs were based on 1965–66 price relationships in Kansas.Production costs for range rearing started poults were slightly higher than for brooding and range rearing. Raising two flocks per year instead of one reduced cost. Tom turkeys could be produced approximately 3 to 4 cents per pound cheaper than hens, and slightly cheaper than a mixed flock.Feed and poults, the largest cost items, amounted to 78.7% of total costs for the brooding and range rearing system; and 85.7% for the other management system. Depreciation on buildings, equipment, and machinery was the largest fixed cost item.Economies of scale—which existed for both management systems, with approximately half of the savings occurring between the 5,000- and 10,000-bird size flocks—were relatively small, especially in flocks larger than 10,000 birds, and were smaller for toms than for hens. The cost reduction per pound (0.95 cent) from brooding and range rearing two 5,000-bird mixed flocks per year rather than one was equal to that obtainable by expanding one mixed flock per year from 5,000 to 50,000 birds.Expanding the turkey enterprise to 50,000 birds, and two flocks per year, appears to be justified in terms of cost savings. But increased mortality (from 9 to 15%) for tom turkeys would offset economies of scale gained by expanding flock size from 20,000 to 50,000 birds.Production costs varied considerably, depending on how fully brooding capacity was utilized. Depreciation, interest on investment, repairs and maintenance, and poult cost were major factors accounting for economies of scale (between 5,000 and 50,000 birds) in brooding and range rearing.The optimum age to market tom turkeys was 26 weeks, based on feed requirements per pound of gain.