410 AGRICULTURAL ECONOMICS 



sells a part of his oats on the local market and is trying out the 

 dairy business on a scale that makes no demand for purchased 

 grain, it may be perfectly proper to value the oats at the local 

 market price, minus the cost of marketing. This is justified 

 on the ground that it gives the farmer the correct basis for 

 comparing the relative profitableness of oat production and 

 other competing enterprises ; on the other hand, if the farmer 

 is a dairyman who makes demand for large quantities of grain 

 beyond what he is in a position to raise, the oats may properly 

 be inventoried at the market price plus the cost of hauling the 

 same amount of oats or other grain from the local market. 

 This is justified under these conditions on the ground that in 

 considering the relative profitableness of growing oats and doing 

 something else with a part of his time, this higher valuation is 

 the one the farmer must use in determining what it pays him 

 best to do. Furthermore, when calculating whether to increase 

 or decrease the grain ration fed his herd, or whether to feed oats 

 or some other feed, this higher price is the one which should be 

 made the basis of the calculation so long as the dairyman is a 

 buyer of oats or substitute feeds. Where the dairyman is a 

 seller of oats, the problem is different. He then needs to figure 

 on the basis of market price minus cost of marketing, in deciding 

 how many cows to keep and how generously to feed them. 



Yet another condition may call for still a third basis of valuing 

 oats. A farmer may find it profitable to grow oats to feed his 

 cows, yet he may not find it profitable to grow oats to sell, nor 

 to buy grain to feed the cows. This may be owing to distance 

 from the market, or to various other causes. In this case, it may 

 be as well to throw the two accounts together and charge the 

 cows with the cost of producing the oats. The basis of deter- 

 mining whether to grow oats or do something else, then becomes 

 a matter of comparing the costs of the different methods of 

 getting cow feeds. This is probably an exceptional condition, 

 and the question of using cost as a basis of valuation is not 

 looked upon favorably, excepting where conditions rule out the 

 market factor and put the dairyman on a self-sufficing basis, 

 so far as dairy feeds are concerned. The disadvantage of using 



