xiv INTRODUCTION 



to determine a fair and definite method of cost accounting 

 that will be generally accepted. The different items are dis- 

 cussed separately. 



A cost method is important to the individual producer in 

 showing whether his dairy is profitable, whether some opera- 

 tion costs more one year than another, and possibly in sug- 

 gesting some means of producing milk more cheaply. A defi- 

 nite and correct system, used as a standard, should make it 

 possible to compare costs in different sections of the country, 

 and eventually to determine a price that will be fair and 

 reasonable to the producer and at the same time satisfy the 

 consumer that he is paying only what is equitable for the 

 capital, labor, and other expense necessary to produce milk. 

 Rough estimates and errors have the opposite effect. 



Although in a great many localities surveys show an actual 

 loss in dairying when all costs are included, still the dairymen 

 usually are successful farmers, and dairy sections and dairy 

 communities are almost without exception prosperous. This, 

 of course, may be difficult for the consumer to understand. 

 Dairymen who are making a special product and getting a 

 special price for it are in most cases satisfied, but in those 

 communities where conditions show the dairy industry to be 

 unprofitable, there are several reasons why dairymen continue 

 in the business: 



1. On account of changed conditions some are producing 

 milk at no profit or at a loss. An improved method of ship- 

 ping milk may be a factor in this. A dairyman who lives near 

 a city is able to sell his straw, stover, and other feeds at a 

 higher price, and perhaps also his labor is high priced. With 

 improved facilities of transportation he is obUged to compete 

 with a farmer who occupies cheaper land and who places low 

 values on his coarse feeds. 



2. There are those who are satisfied to produce milk at 

 actual cost in order that they may get some return for labor 

 that they could not use without the dairy. To illustrate — 

 assume that there are two farmers, each with i6o acres of 

 equally good land, one having lo cows and the other none. 

 Now we may suppose that the farmer with the lo cows sells 



