these jobs to justify ownership of machines. Custom hiring the planting and 

 harvesting of corn and the seeding of grass would free 65 hours of the time 

 of the farmer and seasonal hired help which could be used in doing custom 

 plowing, harrowing, and corn cultivating. Again it is assumed that the hired 

 labor freed by the hiring of custom services is not released. Dividing the 65 

 hours equally among plowing, harrowing, and corn cultivating would increase 

 net returns by S57. Hiring the three operations — planting corn, harvesting 

 corn, and seeding grass — would reduce total machinery operating and owner- 

 ship costs by $182. The complete adjustment involving both hiring and doing 

 custom work decreases total costs only $137 because of the increased costs 

 incurred by doing custom work off the farm. This complete adjustment, 

 which involves both hiring and doing custom work, increases net farm in- 

 come by $194 compared with owning all farm machines and doing no custom 

 work (table 17).ii 



Some of the advantages in income from these two adjustments which 

 combine various ownership patterns is the result of relatively high rates for 

 doing some custom jobs. With increasing competition for custom work this 

 kind of relationship cannot be expected to continue. For that reason care 

 should be taken in analyzing such examples, and too much emphasis should 

 not be placed on the absolute differences in money incomes or costs. 



Summary of Alternative Ownership Patterns 



Table 16 summarizes the effect of three investments in machinery on 

 farm income, farms costs, and cost of producing milk for the situation in 



Table 16. — Comparison of Investment and Costs and Returns for Alternative Patterns of 

 Ov/nership of Machinery, Assuming Farm Labor Is Not a Cost, Farm A 



*A11 equipment valued at full 1949 purchase price, 

 flncludes costs of hiring custom work. 

 $See Table 12 for a list of operations. 

 §See Table 13 for a list of operations. 

 1 1 See Table 14 for a list of operations. 



11 If hired labor freed by the hiring of custom services could be released, total 

 farm costs would be reduced $165 while net farm income would be increased |194 

 compared with owning all farm machines and doing no custom work. At the same time 

 the cost of producing 100 pounds of milk would be reduced by $0.13. 



25 



