EXPERIMENT STATION BULLETINS. 417 



STUDIES IN THE COST OF MARKET MILK PRODUCTION. 



Bulletin No. 277. 



That every successful manufacturing enterprise must have some sort 

 of cost accounting system is a matter of common knowledge. It does 

 not necessarily follow that a manufacturer must at all times sell above 

 costs. He may at times sell below costs, and at others he may secure an 

 unreasonably high price; but the average selling price must at least 

 equal the average cost if he is to continue permanently in the business. 



Cost accounting on most farms, especially dairy cost accounting, is 

 conducted with considerable difficulty. It would be comparatively easy 

 to find the amount of labor and the cost of digging a ditch of definite 

 width, depth, and length, in a uniform soil of known consistency; or it 

 would be easy to ascertain the labor requirement for plowing an acre of 

 ground. It is comparatively easy to study any business when men are 

 employed throughout the entire day on a single kind of work. 



In the dairy enterprise as conducted on most farms, employment is 

 not continuous, and the care of the dairy herd and the milk is a part of 

 doing chores. 



The more one studies the dairy business, the more fully he realizes 

 that it is one of the complex farm problems. Even if dairying were com- 

 plete with production, our statement would be true; but we still have 

 left the even more intricate features of manufacture, transportation, and 

 distribution. 



However, milk plays such an important role in feeding the human 

 family, and the dairy industry occupies such a strategic position in the 

 welfare of mankind, that the complexity of the task offers no satisfac- 

 tory excuse for its evasion. Further, so much has been said and written 

 on the whole subject of cost accounting in general, and on agricultural 

 accounting in particular, that no justification of the work undertaken is 

 necessary. 



Some years ago the writer read a paper before the Grand Rapids Milk 

 Producers' Association in which he discussed some factors in the cost of 

 market milk production. The data which he presented had been col- 

 lected in the college herd and supplemented by numerous estimates. In 

 the discussion which followed, widely differing opinions were voiced. 

 Men who had spent years of their lives in producing milk for the city 

 market could not agree, yet neither could present evidence in support of 

 his belief. At the close of the discussion the speaker, as well as the 

 audience, was convinced that the aggregate of their knowledge as to the 

 cost of producing milk for the city market was very fragmentary and 

 interspersed at irequent intervals with many crude guesses. 



When in the fall of 1913 Experiment Station funds became available 

 for properly carrying on an investigation of the Cost of Market Milk 

 Productio}! the interest of the Grand Rapids Milk Producers' Associa- 

 53 



