The Nonpartisan Leader Newspaper, April 5, 1917, Page 21

Cost of Producing Farm Products (By Homer Dixon) E ARE living in a scientific age. This is witnessed by the fact that factories, shops, commercial houses and cities are applying scientific man- agement to their affairs. Evidently these leaders in our commercial world have learned that business science is essential if they are to secure adequate Yrofits from their business. The “farming business” comes under the application of this principle also. It is true that we are living in an unusual time. Because of the war prices are high. This unusual demand 1s going to force us to put a great deal of money into the ground this spring in the form of seed. Our “costs of production” this year will be high. Seed 1s high, labor is high because most everyone is employed, food prod- ucts are high, and feed is high. In or- der that the farmer may keep costs down to a minimum this year, he must apply careful management. In order to secure the greatest net re- turns, careful attention must be paid to his costs and an attempt be made to secure the maximum numbers of labor hours from his stock and hired help. I will attempt in this article to give you somé idea of methods used in keeping cost accounts and also some results which have been found through investigation. Of late years books, bulletins and the farm press have dis- cussed this question and pointed out the fact that the application of busi- ness methods to farming has become a necessity. ‘“Farm management” was & term little heard a few years ago. MAN LABOR THE BIG ITEM Investigation always precedes reor- ganization or the adoption of new methods, and the keeping of cost ac- counts is investigating and -laying a foundation for reorganization. Costs show us the weak points of our system and enable us more accurately to de- termine the true source of the profits. ‘With this idea in mind, and also with & desire to aid in increasing the farm- er's net returns, investigations have been made by various state experiment, stations. One series of investigations was conducted by the Minnesota experi- ment station in co-operation with the bureau of statistics, U. S. @epartment of agriculture. This covered a number of years and they found that the fac- tors which enter into the cost of pro- ducing field crops are ‘man labor, horse labor, land rental, seed, twine, threshing, values consumed in ma- chinery, etc.” It was found that man labor constituted ‘“a large proportion of the cost of production,” being great- ly influenced by the monthly wage paid. In Minnesota most of the man labor is hired by the season or year. The wages are fixed to meet the de- mands of two seasons: the crop sea- son from April 1 to November 30, and the winter season from December 1 to March 31. On many farms carrying dairy stock the work is fairly well dis- tributed throughout the year and labor You Cannot Know What You Make Without Keeping Accounts Even the cost of pasturage for milch cows and growing livestock he is producing milk below cost, or selling his beef steers to the pac use of his land free for a season or two. is hired on that basis. The cost of board for labor was included, and varied from $2.50 to $5.00 per weel, amounting to about one-third of the cost of man labor. It seems that the problem of the dis- tribution of horse labor throughout the vear, providing at the same time prof- itable employment for the horses, is difficult to solve, but affects the cost of production very markedly. The annual cost of keeping a horse amounts ta about $94 and is made up of “feed, labor, interest on investment, depre- ciation, shoeing, harness and miscel- laneous expense.” If you know the cost of horse maintenance and the number of hours worked, vou can determine the efficiency of your horse labor. It was found in Minnesota that horses perform an average of three and one- half hours work per day throughout the year at a cost of 9.24 cents per hour. HOW TO FIND MACHINERY COST Ten per cent is usually taken as the average annual depreciation on farm machinery, but the statistics gathered in this investigation showed that “the average of all machines was approxi- mately 7.3 per cent. This is to be ac- counted for by the fact that the farm- ers have taken better care of their ma- chinery during the later part of the investigation period,” which ran over a number of years. In order to deter- mine properly the. machinery values consumed in producing the crops, it was necessary to get at the acre cost R —Pictures by cou'rtesy Bernardy-Viel Realty Co. )\ be on a competitive basis with the merchant and the manufacturer, the o ~t know the value of the work his team does, how much his human ' what is the expense of operating his binder—in short the actual ~er bushel. —Pictures by courtesy Bernardy-Viel Realty Co. must be figured if the producer is to know whether kers at price that amounts to throwing in the SOME COSTS THAT HAVE BEEN DETERMIJED Wheat, fall-plowed, stack threshed .. Corn, cut, shocked and hauled from field Corn, cut, shocked and husked from shocks ... 5 Corn, cut, shocked and shredded " Corn, husked from standing stocks Fodder corn, stacked at farmstead Silage, in silo trere st ...$10.780 ceeeea.. 140750 ceeees. 17.695 ... 16.950 <oo 14.520 ... 14.840 «oo 19.490 R RN “sestsesscnnan Oats, fall-plowed, stack threshed ..................... 12.020 Rye, fall-plowed, shock threshed .. Barley, fall-plowed, stack threshed .. Tlax, shock threshed ..... Timothy, seed Clover, seed Hay, millet L T R N R S AT D LI I I I TP Ptteeccescttsr e alese s ein e 10.830 11.160 seeen ssessee . . . . e "ttt cccr s Hay, clover and timothy, first Crop .... ... 7.510 6.800 8.350 12,480 D R R R Potatoes, machine production, Clay county ............ 32.180 These are based on a five of each class of machinery, and dis- tribute it to the various crops. They found the values in farm ma- chinery consumed per acre annually, 1908-1912, to be as follows: MACHINERY Grain machinery Binders ceeeerseiiii....50,.168 Drills ..... seeesssenas .o G072 Fanning mills .. o 014 Grain tank ................. .012 Wagons, sleds, racks ...... 077 Corn machinery Binderss. . . i i e e 604 Cultivators ... .223 Planters: v s, .083 Silage Cutters . 1.216 ‘Wagons, sleds, racks .195 Hay machinery MOWerS e e sy 16 Rakeszy ot e . 079 Forks, slings, etc. ... vo 046 oaders en st sae = .o 095 Tedders ..... teteteiieienaae 062 ‘Wagons, sleds, racks ....,.. .155 All-crop machinery B OW B S e o va ot s st 1005 Harrows .... eeterseacaes L019 Discs ..... ceestsecseseeiees J037 Manure spreaders .......... .837 Minn. Bulletin 145. Land rental or the interest at § per cent on the value of the land, should be charged against all crops. This should "be charged against the crop whether the mortgage is paid or not, . “for were the capital invested in any other business, bond or security, the owner could rightly expect a return of b or 6 per cent without ary effort on his part.” The seed, twine and threshing bills can easily be figured from your ac- counts. It costs about $2.756 per acre TWELVE * lowing items: Minn, Bulletin 145, -year average and should be dependable. to apply nine loads of manure with a spreader. You ought by all means to keep your records and work with a view to discovering your cost per acre. ‘When this is determined you can easi- ly figure the cost per bushel of the various products grown. EASY TO KEEP RECORD OF COSTS I}ny farmer who is desirous of so dqmg, can keep a set of cost accounts with very little trouble, No elaborate set of books is needed, and they would only lead to confusion. It is best to use a book, as loose leaf systems are bothersome and the leaves become mis- placed. A simple little book with ruled sheets will do very well. G. F. War- ren states that a crop must be charged with the following items: Inventory of work, seed, etc.; manure for this crop; fertilizers or lime (charge all or part to this Crop); use of land; use of buildings for _storage of crops; use of machinery; all man’ labor; all horse labor; all other costs ca.used by the crop. In order to deter- mine the net profit on the crop it would . be necessary to credit it with the fol- “All produce sold; all produce saved for seed; all produce fed on the farm; bedding, etc.; manure f:harged to this crop, but probably left in the soil and the inventory at the end of the year.” The accounts with livestock should be charged as follows: “Inventory of stock, feed, etc., at beginning of the year; purchased stock; féed and bed- dm.g bought or raised; pasture; use of buildings; use of machinery; all man labor; all horse labor; interest on in- (Continued on page 20) 2