COST PRICE AND COSTS OF PRODUCTION 189 



potatoes, is the basis. On all cereal-producing farms a limited 

 amount of grain forms a by-product that has little market value. 

 Hence animals such as pigs and poultry that consume gleanings 

 and waste products may be regarded as themselves an indirect 

 by-product of crop-cultivation. In the dairy industry, where the 

 milk is sold for town consumption or is converted into cheese, the 

 calves may represent a by-product and may be sold for rearing and 

 fattening elsewhere, or ma}' be converted into veal as soon as 

 possible. Cattle may be kept on a farm simply as a means of dis- 

 posing of the rough fodder in the most economical way or of assisting 

 in the maintenance or the restoration of fertility without the pro- 

 duction of animal foodstuffs becoming a special end in view. Sheep 

 may be reared principally for wool or for mutton, 01 the combina- 

 tion of both wool and mutton-producing qualities may be aimed at. 

 Goats are raised in different countries for meat, milk, skins and 

 hair, but generally speaking not more than two of these can be 

 obtained in satisfactory quality from the same class of animal. 



A consideration of these facts leads to an important proposition 

 with regard to the costs of production of the various kinds of animal 

 foodstuffs. Except in the more undeveloped parts of the newly- 

 settled countries of the world, where large-scale and somewhat 

 uniform methods are the rule, the cost of production of any parti- 

 cular kind of animal foodstuffs depends to a considerable extent 

 upon the price realised for another or other products of the pro- 

 ducing animal. Sometimes even, when the keeping of food animals 

 is distinctly subsidiary to crop-production, the costs of production 

 of the foodstuffs obtained from them become quite nominal. In 

 the dairy industry relations of interdependence as affecting the 

 ultimate costs of production are especially marked. 1 Any attempt 

 to estimate the true costs of production of animal foodstuffs under 

 ordinary conditions involves the investigator in a study of the 

 costs of production of the farm output as a whole, and of the manner 

 in which these costs are correctly to be distributed among the 

 various articles produced. Only by examining carefully the work- 

 ing of a number of farms and by collecting and averaging the results 

 can an approximate standardisation of costs be obtained for a 

 selected area. 



When the costs of production of different classes of animal food- 

 stuffs are examined, it is found that more or less definite relation- 

 ships can be established between some of them. The total cost 

 of production of milk has been obtained in a number of districts 

 in different countries, and from this the cost of producing butter and 

 cheese is readily obtained by adding the expenses of manufacture 



1 The actual costs of production of butter may be modified by the price 

 realised for a finished product such as bacon arising from a complementary 

 industry that utilises the skim-milk by-product. Dairying in any form 

 results in the production of meat in various ways as a by-product (see Part II., 

 Chap, v., Sec. 3), and this must be allowed for. 



