FACTORS FOR SUCCESS IN DAIRY FARMING 259 



cess any business should pay a reasonable rate of interest on 

 the capital invested and, in addition, pay fair wages for the 

 labor used. The best way to measure profits on a farm is first 

 to fi (id the difference between the receipts and the business 

 exp< nses for a year, including in expenses all labor except 

 the owner's. This difference represents the pay for the use 

 of ihe capital and for the owner's time. The interest on 

 the noney invested in the business calculated at 5 per cent, 

 or i\ :, the current rate of interest, should be subtracted from 

 the ncome from capital and owner's labor to get the amount 

 left ;o pay for his time. This is called his labor income. The 

 folk wing averages from 73 farms in Illinois show the method 

 of figuring : l 



Average capital $51,091 



Average receipts 5,042 



Average farm expenses 1,866 



Income from capital and owner's labor 3,176 



Interest on capital at 5 per cent . . 2,555 



Owner's labor income 621 



SIZE OF BUSINESS 



223. Size of Business. In order to be most economically 

 manpged, a dairy farm should be large enough to provide 

 full use for a reasonable equipment of modern machinery. 

 This does not mean that it should be one of the great costly 

 and money -losing establishments that are often maintained 

 by wealthy men. But it does mean that a farm is working at 

 a disadvantage if it is not large enough to provide work for 

 two or three persons. Just how many acres this will require 

 depends on the richness of the land and on what is done with 

 the milk. A small area of land that will naturally grow two 

 tons of hay and fifty bushels of corn per acre will represent 



1 U. S. Dept. Agr., Bulletin 41, p. 9. 



