on these two is that they offer an opportunity for utilization of the present 

 crop machinery and some other fixed resources more fully. If this farmer 

 wanted to expand his milking herd with a minimum of new capital invest- 

 ment and without hiring extra labor, then the "purchase replacements" 

 looks like the alternative for him. The point is that in making an evalu- 

 ation of several production alternatives a farmer will base his final decision 

 on the profitability prospects, on his capital and labor situation and on the 

 amount of risk he is willing to take. 



Throughout this report emphasis has been placed on the evaluation of 

 individual production practices. Actually some combination of the several 

 alternatives may be the best solution for this farm. For example, if the 

 farmer applies more fertilizer, rents additional land, and replaces his corn 

 grain with corn silage, he can almost double his herd size. Another combi- 

 nation might include adding irrigation, applying more fertilizer, and pur- 

 chase replacements instead of raising them. Again the availability of capital 

 and labor plays an important part in the selection of some combination of 

 alternatives. When major expansions and adjustments are under consider- 

 ation, the problem may involve a different scale of production techniques 

 than those presented for this problem. But whether the adjustment under 

 consideration is large or small, the method of evaluation as illustrated in 

 this report applies equally well. 



Appendix Table 1. Inventory of Machinery and Equipment. 



a Dspreciation equals (original price less ten percent of original price) divided by 

 (estimated life in years). 



^ Average value equals (original price plus ten percent of original price) divided by 

 two. 



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