COST OF MILK PRODUCTION 411 



mortality risk on the cows themselves, is a larger item than often believed. 

 First of all, the average useful life of dairy cows in the herd after they 

 first freshen is estimated by various authorities at only 5 to 7 years. 

 While many cows have a much longer period of usefulness, on the 

 average the cows will be replaced within this period, due to injury or 

 contraction of disease, failure to breed, or low milk yield. The annual 

 depreciation is computed by finding the probable difference between 

 the cost or value of the cow when she first freshens or is purchased and 

 the price she will bring for beef when she is discarded. For example, 

 if a cow is worth $125 when she first freshens, then has a useful life of 

 6 years, and finally brings $60 when sold for beef, the annual depreciation 

 will be one-sixth of $65, or $10.83. The taxes paid on the cows, interest 

 on their average valuation, and the mortality risk must also be included 

 in the charges. With dairy cows the annual mortality risk is usually 

 about 1.5 per ct., when the health of the herd is properly safeguarded. 



6. The cost of keeping the sire must be pro-rated among the cows, or 

 the cost of bull service must be included in herds where a bull is not 

 owned. 



7. Under " miscellaneous " are included such items as cash paid for 

 hauling milk, cost of consumable supplies, veterinary services, cow-testing 

 association dues and other miscellaneous items. Some of these expenses 

 are sometimes carried under the "cow charge." 



In computing the labor cost, commonly all the man labor, both of hired 

 laborers and of the owner and manager, is figured at the current rate 

 for ordinary farm labor. Then an item is often added to cover mana- 

 gerial ability and business risks, a common estimate for this being 10 

 per ct. of the other total costs. 



666. Credits in determining cost of production. From the total gross 

 cost of maintaining dairy cows, which will include the various items just 

 enumerated, must be deducted the value of the manure secured and the 

 value of the calves at a few days of age. Commonly, the value of the 

 manure produced on pasture is not deducted directly, but the pasture 

 charge is based upon the fact that the fields will be improved by the 

 manure voided on them. The value of the calves will of course vary 

 widely, depending on the breeding of the cows and the sire. In studies 

 of the cost of milk production where some herds include pure-bred cows, 

 these are commonly valued at the price of high grades of similar pro- 

 ductive capacity, and the calves credited at usual veal or grade prices. 

 This is done so as to differentiate between the financial returns from the 

 two enterprises the breeding of pure-bred stock and the producing 

 of milk. 



667. Annual cost of keeping cows. From the large amount of data 

 which has been secured in recent years on the cost of milk production, 

 the following summaries of investigations carried on in 6 states are 

 presented. The expenses of producing milk are now much lower than 

 when most of these studies were made. Since costs are constantly 



