582 IOWA DEPARTMENT OF AGRICULTURE 



Landlord's per cent on investment is the net rent to the landlord after 

 subtracting taxes, etc. 



In 1913 the operator estimated his physical labor at about $300 and 

 he received about this amount in labor income. The landlord received 

 less than one-half the mortgage rate, but land was advancing in price 

 sufficiently to make up the difference. 



In 1915 when another big survey was made, the operator and the land- 

 lord were getting higher returns. The data for 1916, 1917 and 1918 were 

 taken from selected farms which in 1918 made twice the labor income 

 of the average farm. It is probable that the landlord's per cent on these 

 selected farms is also higher than the average. 



Data for the average Iowa farm shows that in 1918, according to the 

 farmer's own estimate of the value of his labor, it was greater than his 

 labor income of $1,124. If the labor income had been figured on the 

 basis of land prices August 15, 1919, instead of March 1, 1918, each farm 

 operator would have received only $150 for his labor. It is probable that 

 1918 was a more profitable year than the average from 1916 to 1919, in- 

 clusive. 



(D) Comparison of index of prices of farm products and of farm 

 lands. 



Table IX gives the index prices of farm products and of land. (100 

 equals average five years 1910-14) : 



U. S. Prices of Crops Price of 

 Year. and Live Stock. Iowa Land. 



1919 432 239 



1918 214 137 



1917 178 125 



1916 • 121 120 



1915 102 116 



Comparing prices of farm products with prices of Iowa land indicate 

 land was relatively high in 1915 and in 1919. It appears that land was 

 capitalized in 1919 at the price farm products were selling for at the 

 time. If war prices for farm products continue, the war price for farm 

 land is not too high. It is probable, however, that peace prices of farm 

 products will be lower than war prices and many farm purchasers will 

 find it increasingly difficult to pay for land from the returns of farm 

 products sold at peace prices. Labor income and value of operator's 

 labor indicate cost of production has increased in the same proportion as 

 the prices of farm products and the prices of land. The more complete 

 and efficient use of land, labor and equipment will tend to lower the cost 

 of producing farm products and result in a larger surplus to be applied 

 in paying off interest and principal. Unless cost of production is reduced 

 through improved farming methods many farms will probably go back 

 to the previous owners. 



(E) Psychology of farm land values. 



