As a second possibility, only the seeding of grass and the harvesting of 

 corn would be hired. Custom jobs done off the farm would be plowing, 

 harrowing, and planting and cultivating corn. The custom-hired jobs of 

 seeding grass and harvesting of corn would free 85 hours of labor, of which 

 26 hours is seasonal hired help that could not be used for doing custom work. 

 The remaining 59 hours of operator labor would be equally divided among 

 the four off-farm custom operations. Assuming that the 26 hours of freed 

 hired labor is still employed and used on the farm, the complete adjustment 

 involving hiring and doing custom work would result in an increase in net 

 farm income of S241, compared with entire ownership. Total ownership and 

 operation costs would be reduced by $107 compared with self-ownership of 

 equipment. ^^ 



Summary of Alternative Ownership Patterns 



The results for farm B are similar to those for farm A. Of the three 

 ownership patterns compared in Table 21, in which labor is assumed to have 

 no other productive employment. Alternative 4 (partly owned and partly 

 custom hired) would result in the lowest cost and the highest net income. 

 Investment in machinery would be reduced also. Substitution of complete 

 custom hiring for self-owned machinery avoids investment in machinery but 

 increases total costs considejably. 



Table 21. — Comparison of Investment and Costs and Returns for Alternative Patterns of 

 Ownership of Machinery, Assuming Farm Labor Is Not a Cost, Farm B 



Ownership 

 Pattern 



Total 



Investment Ownership 

 in and 



Farm Operating 

 Machinery* Costsf 



Difference Between Complete 

 Ownership and Alternatives 



Alternative 1 

 Owned by 

 the operator^ 



Alternative 3 

 Custom hired§ 



Alternative 4 



Partly owned and 

 partly custom hired] | 



Dollars Dollars 



7,925 1,348 



5,935 



1,253 



Dollars 



- 95 



Dollars 



3,196 +1,848 +0.80 



-0.04 



Dollars 



-1,848 



+ 95 



*A11 equipment valued at full 1949 purchase price. 



flncludes costs of hiring custom work. 



JSee Table 20 for a list of operations. 



§The same group of operations were compared as in Table 20, 



1 1 See text, page 30, for a description of operations. 



16 If hired labor freed by the hiring of custom services were released, total farm 

 costs would be reduced $133 and net farm income increased $241 compared with entire 

 ownership. The cost of producing 100 pounds of milk would be decreased $0.06. 



31 



1 



