282 



EXPERIMENT STATION RECORD. 



[Vol. 40 



Production costs and selling prices of milk under different methods of 



marketing. 



i Profit. 



The net cost was secured by adding together the feed, labor, and miscellaneous 

 costs, deducting credits for manure, stock sold, hides, etc., and then adding 10 

 per cent for managerial ability and risk. 



The following table summarizes the more pertinent data as to feed and labor 

 expenditures for St. Louis and St. Joseph, those for Kansas City not being 

 complete in all items: 



Feed and labor expended per gallon of milk produced annually per coic. 



Cost item. 



Per cow: 



St. Louis. 

 St. Joseph 



Per gall >n: 

 St. 1 



St. Joseph 



Horse 

 labor. 



Hours. 



140.0 



Hours. 

 .19 



"In no case were the men who were producing and selling milk wholesale 

 averaging a profll when ail Items of cost were considered. A few Individual 



cases of profit were due to particularly favorable contract prices rather than to 

 exceptionally good production. The producers who retailed milk averaged a 

 profit of 3.1 cts. per gallon." 



It is pointed out thai sod e of the items included in the production costs 

 given do not represent Immediate cash outlay, and that this explains why 

 dairymen continue in the business in spite of low returns. 



"On the basis of the difference between wholesale and retail prices it appears 

 that central distributors can sell at the same price as farmer retailers with a 

 margin three to four times as large, because milk can be bought wholesale 

 Cheaper than it can be produced." 



Determining cost of milk production, F. A. PEABSON {Cream, and Milk Plant 

 Mo., G [1917), No. •>'■ l>. 35). — Studies completed l.y the dairy department of the 

 Illinois Experiment Station are cited lo show tiiat, in the Chicago milk district. 

 the amounts of feed and labor entering into the average herd cost of milk pro 

 duced per hundredweight are as follows: Grain 44 lbs., silage, 188 lbs., hay 

 50 lbs., bedding .">'.» lbs., and man labor 2.42 hours. The unitemi/.ed debits are 

 approximately offset by credits for increase in stock, manure, etc., and both 

 may be disregarded in making a practical rough estimate of the financial 

 of production. The relative price paid per month in the past is taken as a fair 

 indication of the proper distribution of prices by months. A table showing 



