December, 1931] Dairy Farming in Grafton County 45 



Starting with an average labor income of $393 as shown in Table 31, 

 an allowance might be made for changes in the inventory value of 

 cows. In accordance with the usual practice, no depreciation on cows 

 due to changes in the general price level or to cyclical fluctuations 

 was allowed in computing labor incomes. The average number of cows 

 per herd for the 395 farms was 15.7, the average estimated deprecia- 

 tion per head $4.30. Subtracting a corresponding loss of $68 from the 

 average labor income would leave $325 as the average for this group 

 after suffering the depreciation on cows due to changing prices. In- 

 dications are that this price change was much under-estimated by the 

 farmers due to its recent change of direction in trend and to the fact 

 that many had not bought or sold cattle in the meantime. In the 12 

 months covered by the study, prices of cows continued upward during 

 the first six months and turned downward during the last half of the 

 year. Thev have continued to decline up to the present time (August, 

 1931). 



Because both grain and milk prices have decreased in 1931, it is 

 easy to assume that farm profits have not suffered seriously. But the 

 total cost of purchased feed and bedding averaged less than $1,000 per 

 farm, while milk sales represented over $2,000. A ten per cent change 

 in prices for both commodities would be disproportionate in its effect. 

 From the same sources of information as the figures in Table 4, an av- 

 erage net price of $1.75 for milk during the first four months of 1931 

 was obtained. Compared with the average price for the correspond- 

 ing months of 1929, this is a reduction of 39.7 per cent. Grain prices 

 at Utica for the same four months averaged $30.87 — a reduction of 

 30.2 per cent. Disregarding wages because comparable figures are not 

 available, a new labor income statement may be constructed as follows : 



Average labor income for the vear ending April 



1, 1930, 395 farms .' $393 



Estimated changes in average labor income for 



the year 1931, if milk and grain prices were 



to remain comparable to January-April, 



1931 averages : 

 Loss of 39.7 per cent on $2,296 Avorth of milk 



sales $912 



Gain of 30.2 per cent on $986 worth of feed and 



bedding $298 



Net loss $614 



Resulting estimated labor income for same 395 



farms in 1931 —$221 



Inaccuracies can be pointed out in these assumptions, but the figures 

 help to visualize the seriousness of price declines in the farmer's econ- 

 omy. His taxes, interest, and insurance bills will scarcely be reduced 

 during the depression. 



