6 ' BULLETIN 412 



should be given to the relative risks involved. In this study, risk has 

 not been included as a separate item of cost on individual farms, but 

 some allowance for risk has been made by including, in the averages, 

 costs for all farms visited. Some of these farms had partial or complete 

 crop failures. 



The question of what items should be included in calculating the cost 

 of any product raises certain difficulties. In agriculture the problem 

 is complicated because on most farms a number of products are grown 

 which are interrelated in a general system of farming, and because many 

 enterprises yield two products wheat and straw, corn and fodder, mutton 

 and wool. 



The problem is to obtain information by which one enterprise may be 

 compared with another on the same farm, and the same enterprise may be 

 compared on different farms. It is necessary, therefore, that uniform 

 methods be employed. The methods used in this study have followed 

 as closely as possible the principles laid down in the report of the com- 

 mittee appointed by the Secretary of Agriculture of the United States to 

 make recommendations concerning methods of procedure in cost-of-pro- 

 duction studies. 2 



ITEMS INCLUDED IN COST 



Seed, plants, and fertilizer were charged at cost. All fertilizer applied 

 in 1920 was charged to the crop of that year. 



Manure was valued at the farmer's estimate, or, if no estimate was made, 

 at $2 a ton at the barn. To allow for residual value, manure applied to 

 the land that was in canning crops in 1920 was charged to the 1920 crop 

 as follows: of the manure applied in 1920, 40 per cent; of the manure 

 applied in 1919, 30 per cent; of the manure applied in 1918, 20 per cent; 

 of the manure applied in 1917, 10 per cent. 



Lime was charged at cost. The charge to the 1920 crop was based on 

 the length of the rotation, the cost being distributed over the number of 

 years in the rotation. In most cases 20 per cent of the cost of the appli- 

 cations made during the preceding five years to the land on which the 1920 

 crop was grown, was charged to the 1920 crop. 



Labor hauling and spreading manure and lime. The time required to 

 perform these operations was obtained separately. The crop was charged 

 with the same percentage of the cost of labor as of the manure and lime 

 involved. For example, if 40 per cent of the manure was charged to the 

 crop, 40 per cent of the time spent in hauling and spreading it was charged 

 also. 



Hired labor was charged at cost. Where men were hired by the month, 

 the total cost per month, including the value of board or privileges 

 furnished, was divided by the estimated number of hours worked per month, 

 in most cases 260. 



Operator's and other family labor was charged at what the farmer esti- 

 mated it would cost to hire labor of the same grade. 



Horse labor was charged at 24.5 cents per hour on all farms except 

 when teams were hired for special work, such as hauling peas. In such 

 cases horse labor was charged at the price paid. The rate given was the 

 preliminary average of the cost per hour of horse labor in 1919 on thirty- 



*U. S. Agr. Dept., Circular 132 (Office of the Secretary), pages 9-15. 1919. 



