4 N. H. Agricultural Experiment Station [Bulletin 279 



The Financial Situation — Investment and Income 



Capital Investment 



In figuring the investment on individual farms, the buildings and land 

 (without the trees) were estimated at approximately what the farm would 

 bring on the market for purposes other than for fruit. These estimates 

 ranged from $1,000 to $10,000. (Table 1). There were 10 farms in- 

 cluded in the study in 1926, 12 in 1927. and nine in 1928. The average 

 investment for all three years was $5,464. 



The out-buildings, with one exception, w-ere such as one would find on 

 dairy farms of the state. 



The value of trees was estimated on a basis to be explained in detail 

 in a future publication. In brief, this value is based in part on costs of 

 growing trees and in part on expected future returns discounted back to 

 date. The cost of growing trees was given greater consideration in the 

 earlier years, and expected returns greater weight in the later years. On 

 this basis the highest value is reached at about 19 or 20 years of age. 

 This is just at the beginning of the period of largest net operating profits. 



The total investment including equipment and other personal property 

 averaged $19,792 for all farms. The trees and the farm constitute about 

 82 per cent of this amount. 



Expenses 



The average cash expense, not including payment on interest or prin- 

 cipal, for all farms in the study is shown in Table 2. Hired labor was the 

 largest single item, from 34 to 43 per cent during the three years. On the 

 seven farms which were in the study for the entire period, the expenses 

 average $5,575, $7,715, and $7,324. respectively, for the different years. 



Consumable supplies, which include spray material, fertilizer, apple 

 boxes, apple wrappers, etc., averaged $1,392 for the three years. 



No unpaid family labor was included in the labor costs. On several 

 large farms, labor by members of the family in packing apples was 

 actually paid for by check at the regular rate of pay. 



Receipts 



In 1926, a year of generally low apple prices, the total average receipts 

 were $5,421. (Table 3). Of this 65 per cent was from sale of apples, 

 10 per cent from small fruits, 5 per cent from truck crops. In 1927, 

 with a favorable combination of good yields and high prices, the average 

 receipts on 12 farms were $9,315. of which apples were 73 per cent. In 

 1928. the total receipts averaged $8,316, of which apple sales were 66 per 

 cent. For all farms for three years, the average receipts were $7,735 per 

 farm, of which 70 per cent were from sale of apples. 



Apples from the dififerent orchards were sold at various stages in the 

 marketing process ; hence the prices received are not comparable. To de- 

 termine the relative price on the tree for each year, the apples were traced 

 backward to the pre-harvest stage by allowing for estimated costs of the 

 different services rendered. (See Table 4). 



Estimated in this way, the net returns were $.49 per box on tree in 

 1926, $1.14 in 1927 and .76 in 1928. The weighted average return for 

 three years was $.83 per box. While these are necessarily rough esti- 

 mates, they are put in at this time because the price of apples is con- 



