In determining the optimum combination of machinery, the labor used 

 to operate or service the machinery and equipment represents a real cost 

 if it is hired or if it is family labor for which there are alternative uses on 

 the farm. In general, the more scarce and therefore the higher priced farm 

 labor becomes the more profitable it is to substitute machinery for labor, 

 and to choose the correct machine for a particular job. 



Machinery Ownership Patterns 



The most economic organization of machinery for a specific farm is 

 further influenced by the relative cost of alternative ownership patterns. If 

 it costs less to hire the services of a machine than to own and operate the 

 machine, ownership by the farm operator may not be desirable. A discussion 

 of the alternative ways in which a dairyman can obtain the services of the 

 machines needed in his farming operation is the major theme of this bulletin. 



The five alternative patterns of machinery ownership studied were as 

 follows: 



1. Self-owned equipment. 



2. Joint-owned equipment. 



3. Custom-hired equipment. 



4. A combination of self-owned and custom-hired equipment. 



5. A combination of self-owned equipment, custom-hired 

 equipment, and custom work off the farm. 



Self-ownership has the obvious advantage of having all production 

 equipment readily available to complete the job in as timely a fashion as 

 the performance rate of the machinery will permit. But it requires control 

 of considerable capital for investment in machinery and equipment. Also, all 

 ownership and operating costs associated with the machinery must be car- 

 ried by the individual farm business. 



Joint ownership of farm machinery by two or more farmers is one way 

 to reduce machinery costs for a single farm. One corn planter, plow, lime 

 spreader, or other such machine can readily do the work on two or more 

 farms. If jointly owned, the capital investment and annual ownership costs 

 would be divided between the cooperators. But this type of ownership is not 

 common in New England. Apparently other problems associated with co- 

 operative ownership and use of farm machines more than offset any economic 

 advantages, except for a few farm operators who have special ties or apti- 

 tudes for cooperating. 



Use of custom services is much more common than joint ownership. It 

 eliminates, by a payment for the service, many of the strains which joint 

 ownership imposes on personal relationships between farmers. Although it 

 still requires cooperation between the hiring farmer and the custom oper- 

 ator who may be a neighboring farmer, this type of cooperation is easier to 

 obtain and the working relationships appear to be more satisfactory for a 

 larger number of farmers. In other words, custom hiring provides a method 

 of reducing machinery costs under certain conditions for a large number of 

 farmers. 



Problems of Comparison of Costs for Owned and Custom-hired Machines 



Using custom services presents problems that are associated with the 

 decision as to when to own or when to hire. The time required to do the job 



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