.55 



Q 

 Z 

 < 



o 



a. 



U 



O .35- 



00 



O 

 u 



O 



o 



y- 

 < 



Optimum Ratios 

 at $6.00/cwt. 



Optimum Ratios 

 at $5.00/cwt. 



Optimum Ratios 



at S4.00/cwt. 



-100 -2.00 -3.00 -400 -5.00 



RATIO OF PRICE OF COWS TO PRICE OF CROPLAND 

 (Corrected for Annual Taxes: See Text) 



-6.00 



-700 



Figure 13. Optimum ratios of cows to cropland with high quality cows; hay 

 sales at $27 per ton and three prices for milk. 



Appraisal of Non-Optimal Milk Production Alternatives 



Comparing the shadow prices of non-optimal production alter- 

 natives, provides a direct method of comparing alternative qualities 

 of cows as well as levels of grain feeding. Six levels of grain feeding 

 based on three milk response functions as alternatives. 



Table 8 compares shadow prices of non-optimal milk production 

 alternatives at the 0.35 ratio of cows to cropland. The basis for com- 

 parison is a cow of low milk response. At the $6. milk price, this cow 

 would be fed grain at the optimal 3.500 pound level. If this cow were 

 fed 3,000 pounds of grain instead of the optimal level, the result would 

 be a foregone income of $1; if 2,500 pounds, the loss would be $5. 

 Replacing this low-quality cow with a cow of medium quality fed the 

 optimal grain level would result in a gain in net income of $81. Re- 

 placing the low-quality cow with a cow of high quality and feeding 

 grain at the optimal level would raise net income by $119. 



Within both the medium and the high response functions the 

 net change in income associated with changes in level of grain feed- 



37 



