Viability of a Cooperatively Coordinated Egg Complex

Excerpts from the report Preface: In recent years, the egg industry has undergone many changes that have subjected family-size egg producers to severe economic pressures. A structural change of major importance is the development of substantial numbers of large-scale, owner-integrated egg complexes. These complexes have direct control over all phases of the production-marketing process, and are able to take advantage of economies of large-scale operation to reduce their total system costs. Continued growth of these complexes portends a market environment that could endanger the survival of family-size producers in the egg industry of the future. It has been suggested that one way these producers might remain a viable part of the egg industry is to participate in a coordinated production-marketing system operated by their cooperative. The purpose of this study was to determine if a co-operatively coordinated (decentralized) egg production-marketing system made up of family-size producers could be economically viable. The scope of the study was limited to an analysis of the synthesized cost structures of two simulated coordinated egg complexes—a decentralized contract production complex and a centralized owner-integrated complex. Technical and cost data were obtained from several cooperatives that currently operate coordinated egg production-marketing systems.