BULLETIN 501, V. S. DEPARTMENT OF AGEICULTURE. 



METHODS OF PROCURING DATA. 



The data contained in this pubHcation were procured by a system 

 of careful cost accounting in which the owner cooperated with the 

 Office of Farm Management. In this system each farmer sent in 

 daily reports showing the hours of work performed by men and horses, 

 the use made of materials, the quantities of feed consumed by the 

 live stock, and the financial transactions, supplemented by explana- 

 tory notes. In addition to these reports, individual cow records were 

 kept of milk, feed, and inventory values. 



FACTORS INVOLVED IN THE COST OF PRODUCING MILK. 



In determining the cost of producing milk it is highly important 

 to know all the factors that must be considered and their relative 

 importance. Indeed, one of the most important results of any cost- 

 accounting investigation is the determination of the different items 

 of expense and their relation to the whole. This relation is of funda- 

 mental importance in efficiency studies. 



For convenience in studying the results on these four farms, the 

 items of cost are grouped under the headings "Feed and bedding," 

 "Labor," "Use of building," "Use of ec^uipment," "Use of bull," 

 "Interest," "Depreciation," "Miscellaneous items," and "Overhead." 

 These items are summarized in Table I, and the relative importance 

 of each is shown. The ratio between each item and the total cost 

 of keeping a cow per year is quite uniform in different herds where 

 methods of management are similar. 



Table I. — Relative importance of factors which make up the cost of producing milk. 



Item. 



Actual cost per cow per year. 



Wisconsin 

 farm. 



Michigan 

 farm. 



Pennsyl- 

 vania 

 farm. 



North 



Carolina 



farm. 



Feed and bedding i . 

 Labor: 



Cows and dairy . 



Marketing milk. 



Use of buildings 



Use of equipment . . . 



Use of bull 



Interest 



Depreciation 



Miscellaneous items . 

 Overhead 



S49.23 



29.34 

 2.90 

 6.74 

 1.28 

 1.92 

 2.70 



S71. 77 

 2 32.09 



2.67 



4. 84 



3.98 

 2.61 

 2.87 

 3.22 

 .99 

 1.95 

 5.97 



S53.77 



21.04 

 3.72 

 6.62 

 1.45 

 1.47 

 2.07 

 5.13 

 2.94 

 4.91 



S68.06 



22.63 

 6.41 

 6.38 

 3.22 

 3.52 

 5.72 

 3.52 

 .66 

 7.64 



Total. 



101. 62 



125. 45 



103. 12 



127. 76 



RELATION OF EACU ITEM TO TOTAL COST EXPRESSED IN PERCENTAGE. 



Feed and bedding. . . 

 Labor: 



Cows and dairy . 



Marketing milk . 



Use of buildings 



Use of equipment. . . 



Use of bull 



Interest 



Depreciation 



Miscellaneous items. 

 Overhead 



Total. 



48.5 



28.9 

 2.8 

 6.6 

 L3 

 1.9 

 2.7 



2.6 

 4.7_ 



100.0 



57.2 

 2 25.6 



3.2 

 2.1 

 2.3 

 2.6 



.8 

 1.5 



4.7 



52.1 



20.4 

 3.6 

 6.4 

 1.4 

 1.4 

 2.0 

 5.0 

 2.9 

 4.8 



100.0 



53.2 



17.8 

 5.0 

 5.0 

 2.5 

 2.8 

 4.5 

 2.8 

 .5 

 5.9 



100.0 



1 On these farms part of the bedding was refuse from the mangers, thus it was necessary to consider 

 feed and bedding as one item. 

 ' Includes labor for marketing products. 



