COST OF PRODUCING CROPS 



HpHERE are two methods of determining the cost of producing 

 J- crops the cost-accounting method and the ratio method. 

 The common method is the cost-accounting system, as employed 

 by farm management investigators. For example, it has been 

 found that the average farmer in the corn belt puts about twenty 

 hours of man labor and fifty hours of horse labor on the average 

 acre of corn. This divides up roughly into three hours of man 

 labor and twelve hours of horse labor for plowing, three hours of 

 man labor and twelve hours of horse labor for disking and har- 

 rowing, three-fourths of an hour of man labor and one and one- 

 half hours of horse labor for planting, six hours of man labor and 

 twelve hours of horse labor for cultivating, six hours of man labor 

 and twelve hours of horse labor for husking, two hours of man labor 

 and five hours of horse labor for manuring and miscellaneous. In 

 addition to the man and horse labor charges are machinery expense, 

 seed, manure or fertilizer, insurance and depreciation on the gen- 

 eral overhead charges, and the rent of land. With man labor at 

 35 cents an hour, horse labor at 18 cents an hour, land rent at $12 

 an acre, and machinery and miscellaneous expenses at $4 an acre, 

 the total cost of producing an acre of corn in 1919 was about $32. 

 On extra good land, the rent was as high as $18 or $20 an acre, 

 and the cost of an acre was increased accordingly. However, on 

 extra good land the yield was decidedly above the average. The 

 average acre yield in Iowa in 1919 was forty bushels, or the cost 

 of producing a bushel of corn was roughly 80 cents on the farm in 

 the month of December. The 1919 crop was decidedly above the 

 average ; with an average crop it would have cost the Iowa farmer 

 right around 90 cents a bushel in such a year as 1919. 



The ratio method when applied to corn corroborates the farm 

 management investigational method. The ratio method is based 

 on the supposition that the cost of producing corn varies with the 

 cost of man labor, horse labor and machinery. For the sake of 

 convenience, it is taken that the cost of horse labor varies with the 

 price of corn, oats and hay, and that the price of agricultural 

 machinery varies with that part of Dun's index known as metals. 

 Roughly, it is figured that of the cost of producing corn in Iowa, 

 35 per cent is represented by land charge, 20 per cent by man 

 labor, 15 per cent by corn (used either as seed or fed to horses), 

 10 per cent by hay fed to horses, 5 per cent by oats fed to horses, 



