BB—Lancaster Farming, Saturday, December 27,1980 BYDONCUNNION Staff Correspondent The year 1981 shapes up as a crucial one for Penn sylvania egg producers, according to representatives of three banks heavily into producer financing The situation is par ticularly serious for in dependent producers who lost anywhere from 20 cents to $2 a bird m 1980. Most vulnerable are those who took on heavy debt loads to put up large, automated facilities during the recent boom which saw Penn sylvania egg output rise some 30 percent between 1976 and 1979. “The problem could be worse than the 1967 bust,” one banker pointed out, because of bigger debt loads, higher interest rates and higher operating costs. “Some of our customers lost as much as $lOO,OOO on their flock in 1980,” another said. “It will be impossible for them to make this up with the new flock under the best of conditions The loss will just have to be carried forward ” The bankers are making every effort to keep producers afloat one way or another. In many cases only payments on interest are being made, with payments on principal extended for further negotiation. “We have no desire to take any of them over,” one banker said. “Even if we did, where would we find a' buyer under current con ditions’” Fortunately, many of the banks’ loan customers are contract producers or far- Poultry firm to honor drivers LEBANON - Penn sylvania Manufacturers’ Association Insurance Company will present its Safe Driver Award to CF Manbeck, Inc, in honor of the poultry producer com pany’s outstanding em ployee driving record. The presentation of the award will take place at C.F. Manbeck’s annual Holiday Banquet, Saturday, January 3, 1981, at 7.00 p.m. in the Banquet Room of the Lebanon Treadway Inn Attending the banquet will be • Pennsylvania State Senator Clarence Manbeck, president; Earl Hollmger, fleet safety director; Harry Stoessel, plant safety rs HEAVY % BREEDER i . A CONTRACT |f AVAILABLE W Jr 10,000-12,000 sq. ft. house needed for beginning of February Contact CHICKS, INC. Quakertown, PA 18951 215-536-3155 Bankers review egg situation, blast mers who have other agricultural enterprises to fall back on. Contract producers generally are squeaking by* but some are showing losses because their building loans are based on variable interest rates, which appear to be varying only one way up Some observers say market prices m 1981 will be stronger in the first quarter, decline in the spring and then come on again to average 78 to 82 cents in the last six months The bankers aren’t so sure this would be enough to offset increasing operating costs - higher costs for birds, feed and energy. One ventured that a dollar 'a dozen might be a more realistic price 50 far as producers are concerned This would help pay for losses incurred in 1980 and maybe leave something to live on Current production costs generally are over 50 cents a dozen, one banker noted This includes feed cost, cost of birds and interest on the loan for the birds, and such overhead as mortgage payments and energy If a processor is paying 23 cents under the market and some are and the market is 75 to 76 cents, the producer is within a whisker of- (1) breaking even; (2) losing; (3) gaining One producer told us his current operating costs are 52 to 56 cents a dozen, depending on feed prices At the time he was getting 56 cents from the processor He said he needs a “large” market price of 77-80 cents to director and Safety Com mittee chairman; and Joseph Armstrong, assistant manager of loss prevention in PMA’s Central Region The award will be presented to the company’s 200 drivers who average 1,300,000 miles annually in Pennsylvania, Ohio, Washington, D.C., Massachusetts and Maryland. Driver Gary Ham will also • receive a special award for achieving 35 consecutive years without an accident butter eggs current make a profit of one cent a dozen. The bankers say they feel some operators - are bound to be forced out of business in 1981. These include those with out-moded, inefficient units or those with large, new units heavily fmanced. One banker pointed out “You get some idea of how heavily mortgaged some new operations are when you consider they paid about $6.50 per bird for their facilities For a 60,000 layer house that’s nearly $400,000. “To that you add the cost of the flock, at least $150,000 more, and the operator starts off $550,000 in the hole even before he orders his first load of feed. A few years ago starting costs were about half that much, not to mention lower interest HARSH Why buy a copy... when you can have the original ? • Thirty years as the leader in hoist design and researph makes HAR.SH r!; the name to be trusted in hydraulic hoists • Unique telescopic scissor hoist • Models available to fit 12-26 ft bodies • The one-piece Rigid-Lift ’ hoist weighs less and is stronger than the competi tion s ’add-on" unit • HARSH's’ one-piece unit is more quickly installed • And best of all the price of an original HARSH Rigid-Lift" hoist is less than that of a copy l pricing system rates ” All three bankers took pot shots at the egg pricing system, noting that quoted prices do not reflect regional conditions. One said; “Here in the northeast we’re in a deficit situation with not enough home-produced'eggs to meet our needs. But prices are based on the national picture which shows a surplus. If we had regional pricing our producers probably would be better off” Another said better egg promotion in the nor theastern states might help, noting that government figures show per capita consumption in cities like Philadelphia, New York and Boston below the national average, while Atlanta, Dallas and Los Angeles are ✓ & Tnfcco HP ~ outlook. One said- "Things may get worse before they get better.’’Another said; ‘T just hope our producers can break even in 1981.” The third. “We can’t survive two back-to-back years like 1980 ” up y* '