2Q 2 AGRICULTURAL ECONOMICS 



to build a new home that represents much over a fifth of the 

 capital. The house may be said to be a personal matter, but if the 

 investment goes much beyond this, it is too valuable a house for 

 the farm. 



The average cost of barns per cow or equivalent in other animals 

 was $70 in Livingston County. One who spends over $100 per cow 

 should be sure that he is right. The interest, repairs, taxes, insurance, 

 and other costs on such a building amount to about 8 to 10 per cent. 

 The above limit would make an annual cost of $10 per cow for barn 

 rent. One set of barns were built not long ago which were intended 

 to be model barns for the neighbors. They cost $65,000 and were to 

 house 65 cows. The barn rent per cow would be $100 a year. It 

 takes a good cow to give $100 worth of milk at wholesale prices. 

 There are many such examples in this state. Nearly all the so-called 

 model barns are so expensive as to be impossible on a business farm. 

 Henhouses ought not to cost much over $i per hen. At this cost, the 

 hen must lay a half-dozen eggs to pay her house rent. Many of the 

 big poultry farms have such expensive buildings that the plant cannot 

 possibly pay. 



The danger of overinvestment in machinery is even greater, for 

 there are skilled agents whose business it is to make sales. The 

 average farm in Livingston County has an investment in machinery 

 of $6 per acre of crops. Many a farm of an amateur has ten times 

 this amount. The machinery on a general farm ought not to cost 

 over $10 per acre of crops. The complete cost of maintenance, 

 housing, interest, repairs, and depreciation on farm machinery 

 amounts to about 25 per cent of the inventory value. A $10 invest- 

 ment per acre of crops represents a cost of about $2 . 50 per acre per 

 year. 



89. THE IMPORTANCE OF WORKING CAPITAL 



Many a farmer who has apportioned his capital outlays wisely 

 enough as between buildings, stock, and machinery, to be used upon 

 a given acreage, fails at some critical stage of the year's business 

 because of his failure to provide in advance a sufficient fund of what 

 the business man calls " working capital." If the exigencies of the 

 season demand the replanting of some fields or the hiring of extra 

 harvest hands, special spraying to save a crop or special fertilizer to 

 stimulate its growth, the fact that all the farmer's capital is already 



