14 CIRCULAR NO. 128, BUREAU OF PLANT INDUSTRY. 



is not doing so much business, and though it is badly managed the 

 amount of mismanaged business is not sufficient to cause the loss 

 shown as the average of the poorer 100. 



If this farm had had more cows (10 being the number on the 

 average of the poorer 100 farms), it evidently would have shown a 

 worse statement of labor income than it did, provided, of course, the 

 farm was managed on about the same basis as at present. With that 

 condition it would have been nearly typical of the poorer 100 farms. 



Compared with the two successful farms, Nos. 1 and 2, farm No. 3 

 illustrates why many farms in the regions surveyed do not yield a 

 profit. The owner of this farm has just as many acres of tillable 

 land as either of the other men, but he is not utilizing it. He is 

 plowing so small a proportion of the tillable area each year that the 

 rotation is a very' long one and the result is a very low average yield 

 of hay. This will neither feed a dairy herd economically nor allow 

 any profitable cash crops to be grown to add to the income. The 

 distribution of the capital on farm No. 3 also illustrates a common 

 difficulty. This farmer estimated the value of his house at $3,000, 

 while the owner of farm No. 1 estunated his at $2,000 and the 

 owner of No. 2 at $1,000. The house is a form of investment which 

 does not contribute toward the income of the farm and the least 

 successful of these three farmers had the most money in that item, 

 while he had the least in the various forms of working capital, includ- 

 ing live stock, tools and machmery, supplies, and cash to run the 

 business. This farmer also considered his time worth $500 per year, 

 the same value which the owner of No. 1 placed upon his time. The 

 owner of No. 2, however, set the value of his time at $600 and, as we 

 have already seen, was fully justified in doing so. 



SUMMARY. 



A summary of the striking points of comparison between the two 

 groups of farms is as follows: The better 100 farms have a labor 

 income of $830 against a minus labor income of $341 for the poorer 



100. 



The better farms have returned these larger profits with only 21 

 more acres of total area and about $200 more total investment. 

 Much less of the investment of the better farms was in real estate, 

 however, and more of it in working capital. 



The receipts of the better farms were much more than twice as 

 great as those of the poorer farms, being greater in every class. On 

 the other hand, the total expenses were nearly one-third greater, this 

 increase being especially in a few items of productive expense, such 

 as feeds and fertilizers. 



[C'jr. 11:8] 



