HAMPSHIRE COUNTY FARMERS' MONTHLY 



COST ACCOUNTING 



SECRET OF SUCCESS 



From The Cooperative Poultryman, 

 New Jersey 



"The business of commercial egg pro- 

 duction in California will become prac- 

 tically extinct within a decade if poultry- 

 men do not get down to business and 

 operate on a business basis," writes 

 Joseph H. Tumbach in an article in the 

 Cooperative Poultryman of California. 



The same truth applies with equal force 

 to Eastern poultrymen. 



No man, in any line of business, can 

 know whether he is making or losing 

 money unless he keeps books. No poultry- 

 man knows whether it pays him to pro- 

 duce and sell eggs unless he knows what 

 it costs him to produce the eggs. And 

 not one poultryman in ten, anywhere, 

 knows how much it costs him to produce 

 eggs. In a general way, without lx)oks, 

 the poultryman may know that in the 

 course of a year he is either getting ahead 

 or going behind, but without a well-kept 

 set of accounts, there is no way for him 

 to know where his leaks are, and what 

 may be the cause of his success or failuie. 



Last winter the Atlantic Coast Poultry 

 Producers' Association asked all its mem- 

 bers to fill out a questionnaire giving 

 some important facts about their busi- 

 ness. There were 328 poultrymen in New 

 .Jer.sey who filled out and returned the 

 reports. Of these, 143 had flocks of 500 

 or more hens, 22 owned flocks of from 

 1,000 to 1,500, 12 reported flocks of from 

 1,500 to 2,000 and 7 owned flocks of over 

 2,000 hens. 



Of the 143 who had flocks of from 500 

 to 1,000, there were 9 who rented their 

 farms. The remainder were farm own- 

 ers. Twenty-three of these men and 

 women had been in the poultiy business 

 for more than 10 years, 22 for more than 

 5 and less than 10 years, and 51 for less 

 than 5 years. Thirty-seven out of the 143 

 reported that they kept some kind of ac- 

 counts of their business, and of these 35, 

 there were 23 who made an effort to know 

 how much a dozen it cost them to produce 

 eggs. Some of them, however, kept ac- 

 count only of their feed costs, and the 

 various costs reported by this group 

 ranged from 14 to 55 cents a dozen. 



In the group of poultrymen reporting 

 flocks of fiom 1,000 to 1,500 birds, only 

 1 out of the 22 was a tenant farmer, all 

 the others owning their farms. Four 

 men in this group had been in the poultry 

 business less than 5 years, 6 from 5 to 10 

 years, and 12 for more than 10 years. 

 Fourteen of the 22 kept books and 7 know 

 their cost of egg production, which they 

 )eported as ranging from 23 to 36 cents 

 a dozen. 



In the gioup owning- from 1,500 to 

 2,000 hens, all of the 12 owned their 

 own farms. Six had been in business 



more than 10 years, 5 for between 5 and 

 10 years, and only 1 for less than 5 years. 

 Eight of the 12 kept accounts but_ only 



1 3 were able to ascertain their cost of pro- 

 duction. Two of these 3 reported that it 



jcost them 28 cents a dozen to produce 

 eggs, and the other reported his produc- 

 tion cost at 42 cents. 



I There were reports from 7 poultrymen 

 whose flocks were larger than 2,000 birds. 



I All of these owned their farms. One had 

 been in the poultry business for less than 

 5 years, 5 for from 5 to 10 years, and one 

 for more than 10 years. Only 2 of the 

 7 kept books, and only 1 knew how much 

 it cost him to produce eggs. This 1 re- 

 ported his production cost, including all 

 co.sts, to be 35 cents a dozen. 



The New .Jersey poultrymen included 

 in these reports are probably among the 

 most progressive and businesslike men in 

 the industry. Many of them are success- 

 ful, and are leaders in progi-essive move- 

 ments in the poultry world. The fact 

 that such a small percentage of even the 



imost successful and progressive poultry- 



! men in New .Jersey keep accounts and 

 know their cost of production makes Mr. 

 Tumbach's further comments of timely 

 value and significance to poultrymen 

 everywhere. 



"The poultryman who makes money 



[without keeping records and accounts is 

 simply lucky," says Mr. Tumbach, "like 

 the fellow hunting ducks whose shotgun 

 is accidentally discharged into a flock 

 overhead. I am willing to say unequivo- 

 cally — without qualification or I'eserve — 

 no one can gain the maximum profit in 



1 poultry keeping to which his honest labor 

 entitled him without keeping accounts 

 and records. It would be possible to do 

 so if the man could be found who could 

 and would, where the conditions are the 



isame, blindly and intelligently follow the 

 plans of someone who does keep records. 



I The man who would do that has not yet 

 been hatched. Men are but boys grown 

 tall. We, none of us, ever quite get over 

 the thought we had in our schooldays, 

 that in some respects at least we knew 

 moi'e than the teacher. And so it is that 

 each must do for himself. Under war- 



jtime conditions almost anyone could make 

 a good profit out of poultry keeping, just 

 as one could make money at almost any- 

 thing. Such conditions do not pi-evail 

 today. The margin of profit is smaller, 

 as it is in practically every other line. 



\ And I look for less favorable conditions 

 in the future than we have today. If this 

 proves to be true it becomes increasingly 

 important that every avenue of loss, every 

 leakhole for profits, be stopped up. But 

 how can we .stop the leaks and losses if 

 we know not where they are? 



"Most people prefer the belief that the 

 remedy for their ills lies in some new and 

 radical departure, be it in pills oi- in 

 poultry profits. That is why the ac- 



C(jntinued on page 7, oolumii 2 



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