COST PRICE AND COSTS OF PRODUCTION 187 



On the other hand, the masses of the Western European popula- 

 tions may be better off than they were before the war, in which 

 case the contrary results would tend to follow. The discussion of 

 price movements in relation to intensification is reserved to the 

 close of the present chapter. 



With regard to the actual costs of production of animal food- 

 stuffs, it is very difficult, owing to the diverse nature of the pro- 

 ducts, to the manner in which the different forms of production 

 are intermingled and in which animal industries, as a whole, or 

 separate branches are combined with other forms of agriculture, 

 to arrive at anything approaching standard' costs in regions of 

 mixed farming. 1 In this respect animal foodstuffs differ materially 

 from the chief cereals, for which, particularly in the case of wheat, 

 the entire costs of production in important producing regions, 

 can be, and have been, calculated. This, however, is possible for 

 the production of meat under the simple pastoral system or when 

 the entire resources of the farm are devoted to the production of 

 the single commodity. In studying the total costs of production 

 to individual producers, it should be noted that with the rapid 

 rise in land values since 1895 many farmers in the newer countries 

 are working with land that cost them less than the present market 

 value. Their actual costs of production, other things being equal, 

 are therefore correspondingly below the normal. Sometimes, 

 indeed, these farmers have regarded their wheat or meat as a kind 

 of by-product and have looked to the appreciation of land values 

 as the chief reward of their exertions. 2 If in the future land values 

 cease to rise rapidly, this feature will gradually disappear with the 

 transfer of land to new owners. 



Owing to the complexity of animal industries, especially where 

 they enter into a system of mixed farming, the amount of exact 

 knowledge concerning the ordinary costs of production is meagre. 

 Small producers engaged in mixed farming are notorious for their 

 neglect in keeping accurate accounts. Many of them probably 

 have themselves no clear idea how the various items in the costs 

 of production of their miscellaneous animal products stand together. 

 Indeed the average farmer of this type, producing some beef cattle 

 and calves as well as milk, pigs, and poultry, all partly on faim- 

 grown and partly on commercial feedstuffs, would require a very 

 elaborate system of account-keeping, with numerous debits and 

 credits, in order to show with exactness the cost of each article 

 of produce. It is obviously much easier to arrive at the costs of 

 production when the business is conducted on a large scale and 

 when attention is directed to one or two articles of animal food- 

 stuffs only. Accounts have been kept by fanners in these circum- 



1 " It is doubtful if it is possible to determine the cost of any one com- 

 modity produced on the farm without a complete calculation of all costs." 

 C. S. Orwin, Journal of Board of Agriculture, June 1914, p. 200. 



2 See Marshall, Principles Bk. V. Chap. x. para. 2. 



