PRICE-FIXING AND THE COST OF FARM PRODUCTS 367 



and other elements of costs, as well as the yield, in quantity and 

 value, of each kind of product. Occasionally a farmer has under- 

 taken detailed records on his own initiative and without official 

 aid, but the clerical work necessary for keeping a complete sys- 

 tem of cost accounts is more than most farmers have time to do. 



In the official promotion of farm cost accounting, the purpose 

 has not always been well denned ; but there have been at least 

 two points of view. A position taken by many who are inter- 

 ested in the marketing problem is that costs should be known in 

 order that they may be used as a basis of price-fixing. A view 

 held by men interested in the problems of farm management is 

 that cost accounts show the relative profitableness of competing 

 crops and live stock enterprises, and hence give the starting point 

 for scientific farm management. 



It would seem that the Federal Food Administration in fixing 

 the price of wheat, and the Chicago Federal Milk Commission 

 in its work of the winter of 1918-19, assumed that cost of pro- 

 duction is the foundation of price-fixing, yet when these officials 

 have approached the final problem of price-fixing, they have 

 found themselves confronted with unexpected difficulties. 



Why all this difficulty in the use of cost accounts as a basis 

 of price-fixing ? There are doubtless many reasons, but there are 

 three of unusual importance. First, variation in costs ; second, 

 joint costs ; and third, disagreement in the elements of costs. 

 But in spite of these difficulties, accounting may be used in price 

 control. 



Variation in costs. There is a very wide range in cost figures 

 secured by careful methods of accounting, and there are wide 

 ranges in the estimates of costs by different producers. On the 

 basis of a farm management survey made on 51 farms in one 

 dairy district in Wisconsin, the return per dollar of annual out- 

 lay ranged from 77 cents to $3.05. The results of the Wisconsin 

 Dairy Cow Competition carried on in 1909-11 illustrated this 

 point. The return per dollar's worth of feed consumed by the 

 398 cows in this contest varied from 92 cents to $2.71 ; the aver- 

 age of the best ten was $2.38 worth of product per dollar's worth 

 of feed and the average of the poorest ten was $1.11. 



