expansion based on loan value of real estate along with the present 

 dairy barn capacity (Row 10) was less than 20 cows. Thus, in accordance 

 with the assumption that a dairy farm would not come into existence 

 with less than 20 dairy cows. Farm 1 is classified as a nondairy farm and 

 placed in Group 1. 



Examination of the number of dairy cows possible with the various 

 resources on Farm 2 shows that the forage supply is the most limiting 

 resource, permitting about 25 cows; whereas winter labor and existing 

 dairy buildings would permit approximately 62 and 31 cows, respec- 

 tively. Thus, this farm would be placed in Group 2. 



Table 4. Grouping of Selected Farms on Basis of Homogeneous Resources 



* Based on information obtained from the operator. 



t Borrowing capacity is based on 50 percent of owned estimated real estate value 

 less existing mortgages. 



+ Based on borrowing capital divided by $571, the estimated cost of adding 

 building space for the dairy cow and one-fourth replacement. 



§ Based on a rotation and forage requirement of dairy animals requiring for 

 each cow and one-fourth replacement, 2.5 acres of cropland, or 5.1 acres of permanent 

 pasture, or 35 tons of silage capacity. 



II Based on an estimated labor requirement of 26.2 hours of winter labor per 

 cow and one-fourth replacement and 225 hours of fixed dairy labor during this period. 



H Based on the number of cows permitted with existing dairy building space 

 (Row 7), plus additional cows possible with borrowed funds (Row 6). 



I\'OTE: The resource quantities shown are merely examples for selected firms in one 

 area of the study. The coefficients used in computing the number of cows 

 (including one-fourth replacement for each cow) could differ by areas due 

 to such differences as crop yields, types of forages, length of forage stand, 

 fertilization levels, forage-grain substitutes in the dairy ration, or differ- 

 ences in length of the winter season when estimating total quantity of 

 winter labor. 



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