PRICE-FIXING AND THE COST OF FARM PRODUCTS 369 



feed to the cows at cost of production because this magnified the 

 profits of dairying by throwing the field profits into the dairy 

 account. Now that the point of view has changed and the price 

 of milk is looked upon as the objective point in cow cost account- 

 ing, this same paper is definitely of the opinion that produced 

 feeds should be charged to the cows on the basis of market price. 

 It is not difficult therefore to understand why there should have 

 been two opinions, on this point, before the Chicago Milk Com- 

 mission. Each party accepts the rule of accounting which best 

 serves his interest. 



If there were two methods of testing the amount of butter fat 

 in milk, one of which favored the farmer and the other the pur- 

 chaser, this same alignment of the interests would doubtless be 

 formed. Fortunately there is one accurate fat test accepted by 

 all, hence this occasion of trouble is avoided. What is needed is 

 to settle this question in accounting in accordance with the 

 economic principles underlying the case. 



Joint costs. The typical farm provides a much more difficult 

 accounting problem than a sawmill, a flour mill, or a steel 

 mill. The problem is more nearly comparable to that in railway 

 accounting, where one expenditure affects a great number of 

 sources of income. The farmer who 'produces but one crop is 

 rare. On the typical dairy farm, corn, small grain, clover hay, 

 and pasture, cattle, horses, and hogs are all produced. The 

 same plows, harrows, and horses are used for the various crops 

 which require attention at different seasons, and the same 

 laborers are used for crops and live stock. When the corn is 

 being cultivated the corn is not only benefited but the land is 

 being put into better condition for the small grain crop which 

 will be grown the next year. When the land is prepared for 

 small grain the seed bed for the clover is being prepared, while 

 oats or barley serves as a nurse crop for the clover plant, which 

 in turn is able to draw upon the nitrogen of the air and provide 

 plant food needed for its own growth and for the corn crop 

 which is to follow. Hence the costs of these three crops are 

 said to be joint costs. 



Under these circumstances, suppose it is found that the oat 



2B 



