Table 6. Annual Income of the Basic Farm. 



Returns 



Milk sales, 250,000 lbs. @ $5.00/cwt. $12,500 



Livestock (culls), 5 @ $168 1,390 



Corn grain, 62 bu. @ $1.35/bu. 84 



Total $13,974 



Expenses 



Crops 



Fertilizer, 11.2 tons @ ave. $65/ton $ 726 



Seed, 165 lbs. corn, 645 lbs. oats, 225 lbs. alf.-orch. 229 



Fuel and lub., 1,680 gal. fuel @ $.16, lub. $13 285 



Machine hire 188 



Miscellaneous 304 



Livestock 



Feed. 8.94 tons 367c prot. cone. @ $90/ton and misc. $ 964 



Breeding and veterinary, 25 @ $11.20/cow and repl. 280 



Milk testing and marketing, 25 @ $26/cow and repl. 650 



Miscellaneous, 25 @ $31/cow and repl. 775 



Other 



Machinery repair, $6,023 ave. value x 4% $ 241 



Building repair, $8,000 ave. value x 2% 160 



Taxes 352 



Depreciation, bldgs. @ 3%, machinery $924 1,164 



Interest, 5% of $47,580 2,379 



Total $ 8,697 



Net return to labor and management $ 5,277 



the Appendix. The returns to labor and management under the present 

 plan are about S5.277. How can this farm expand its volume of business 

 and increase its net income? The following sections will deal with some 

 possible solutions to this question. 



Estimated Change in Net Income from Adding Irrigation 



By partial budgeting, it is possible to determine the effect on farm or- 

 ganization and returns from irrigating the 45 acres of alfalfa-orchard grass. 

 Based on the information presented in the "Yield Response" section, it is 

 assumed that yields may be increased 0.5 to 1.0 ton per acre on the aver- 

 age. When there is a significant range it is well to budget both the low 

 and the high yield estimates. A response of 0.5 ton per acre produces 22.5 

 additional tons which will permit an addition of three cows and 1.5 

 replacements.! A response of 1.0 ton per acre is sufficient to add seven 

 cows and 3.5 replacement heifers. Irrigation costs come to about S914 which 

 is the same for either the low or high response (Table 7). To this must be 

 added the costs of keeping and feeding the extra cows and the costs of 

 harvesting the extra forage. Subtracting the change in expenses from the 



1 Fractional units are used in the computations to simplify the balancing of feed re- 

 quirements and supplies. In actual practice, a farmer might add two replacements one 

 year and one the next year which on the average is 1.5 replacements per year. 



