390 APPENDIX 



used in calculating the values of the several crops fed to live- 

 stock; and why such price should be used. 



Market price of the crops fed has been found, after careful 

 analysis, to be the price that results in showing the facts to 

 the best advantage, both relatively and absolutely. By mar- 

 ket price is meant the average market price during a month. 

 As brought out in the description of the Feed Record in Chap- 

 ter VIII, the quantities of the various grains and other feed 

 consumed by livestock are ascertained by estimate or actual 

 measurement. At the close of each month the average market 

 price of the grain or feed is determined by a perusal of the 

 niiirket quotations of the papers. Such market price is used 

 in calculating the total values for the feed record at the close 

 of the month (See Illustrations 49 and 50). 



There are several factors that cause us to conclude that mar- 

 ket price is the most reasonable one to use in crediting the 

 < -rop and debiting the livestock accounts with the commodities 

 fed on the farm. Most of the reasons are presented on a com- 

 parative basis witli the idea of showing why market pi 

 better than cost or than market price minus cost of marketing. 

 These latter two bases are the only other ones that seem to 

 have any supporters. The reasons are divided into two main 

 classes, for (A) Livestock kept for profit, and (B) Livestock 

 kept for work, as hoi 



(A) Livestock Kept for Profit The statement that it "pays 

 Letter" to feed corn to hogs than to sell it means that the 

 t'ann profit is greater, when taking all results of fanniii-j opera- 

 tions together. This cannot be construed as meaning that corn 

 is responsible for the increased profits. The increased profits 

 come as a result of the additional capital, labor and risk re- 

 quired to keep a drove of hogs, in addition to the raising of 

 the corn crop. 



The three principal reasons for using market price in valu- 

 ing the crops fed to livestock that is kept for profit may be 

 stated as in (1), (2) and (3) below: 



(1) It permits of a comparison of costs of raising livestock 

 on different farms in the same year. 



Unit costs of production of crops are influenced so largely 



