RURAI, ECONOMICS 1663 



RURAI. ECONOMICS. 

 1212 - The Sources of Farm Profits and Their Relative Importance. — otis d. h." 



and GtJNN R. V., (Wisconsin College of Agriculture) in Hoard's Dairyman, Vol. 1,1, 

 No. 23, pp. 900, 905, 918-821. Fort Atkinson, Wise, June 30, 1916. 



Ths report, presented at the third annual meeting of the Wisconsin 

 State Farm Management Demonstration and Farm Contest, sums up the 

 results of the third year's work in which nearly i 300 farms have part- 

 icipated 



As the majority of Wisconsin farmers grow four or five different crops 

 and keep two or three classes of livestock it was necessarj^ to find out how 

 much each crop and each class of livestock contributes to the net results 

 of the farm, in order to make a just award of the prizes given for farm mana- 

 gement. The problem could only be solved indirectly, for the farmers had 

 not kept detailed accounts but were only able to give, with an_v exactitude, 

 the entries in their cash-books, showing the total receipts. No analysed 

 figures weie available as to the distribution of the expenses -for labour, 

 foorl, manures etc. The question has therefore been approached in the 

 following indirect way : 



Careful cost accounting records keps b}^ difl'erent Wisconsin workers 

 under the direction of O. A. Juve of the U. S. Department of Agriculture, the 

 ]\Iinnesota bulletin on the cost of producing farm products, the investiga- 

 tions of former Wisconsin Agricultural students, and figures taken from the 

 chief writers on rural economy, have all been consulted in order to arri\'e at 

 a standard cost per crop per unit area, and per animal unit. This standard 

 cost is the average for several farms for a series of years, so that extremes due 

 to a good or bad year and a good or poor farm are avoided. The standard 

 cost per unit for the various crops and classes of livestock has been worked 

 out by the close and detailed analysis of available figures, and the results 

 are given in Table T. 



The profit per unit area for the different crops and the profit j>er animal 

 unit for the various classes of beasts can be calculated by means of the .stan- 

 dard cost per unit, being given the distribtition of the crops of a farm and 

 the number of beasts it carries, and also the gross yield for each crop and 

 each class of beast. 



This is illustrated in Table II. Colunm B shows the area devottd to each 

 crop, and the number of beasts kept on the farm ; column C gives the total 

 cost based on the standard cost per unit ; colimm D shows the percentage 

 obtained by dividing the .standard cost of each individual crop or class of 

 live stock by the total standard cost ; column K shows the distribution of 

 CO ,st obtained by applying the percentage in colunm D to the total expen.ses; 

 column F gives the gross returns for each crop and each class of 11 v^estock ; 

 columti O shows the profit on t-ach cro]; and class of livestock, obtained b}' 

 subtracting the actual cost (F) from the gross returns (F) ; column H shows 

 the average profit per acre for each crop and per animal unit for each class 

 of livestock. 



