lO MILK PRODUCTION COST ACCOUNTS 



pasture will depend, of course, upon the kind of pasture avail- 

 able, location, and season. 



The next step is to arrive at a correct charge for the pasture. 

 It has been customary in the past to use the figure for pre- 

 vailing charge in community or simply a definite estimated 

 amount. Thompson,^ however, bases the cost, with no profit 

 from land, as follows: 



"Interest amounting to 5 per cent and taxes amounting to 0.5 per 

 cent were charged on the actual value of the land in pasture. To 

 these amounts were added all other costs, such as making and re- 

 pairing fences, manuring, fertilizing, reseeding, mowing, and the 

 like. The average value per acre was $19.41. The annual cost of 

 this pasture was . . . $4.29 per cow and accompanying stock." 



With the accompanying stock deducted, the cost would 

 have been approximately $3.50 for the season. The interest 

 on the land was about three-fourths of the total cost, so that 

 if high priced land were used the cost would be increased. 

 This seems to be a satisfactory method for permanent pas- 

 tures that can not be tilled, or land that for some other reason 

 must be kept in permanent pasture. With land, however, that 

 can be farmed a better method is to charge pasture at the 

 rate per acre that it would return in hay, less the cost of 

 making, storing, and marketing. The fairness of this method 

 was pointed out by the great economist Adam Smith ^ more 

 than 150 years ago. He said: 



"A great part of the cultivated lands must be employed in rear- 

 ing and fattening cattle, of which the price, therefore, must be 

 sufficient to pay not only the labor necessary for tending them, 

 but the rent which the landlord and the profit which the farmer 

 could have drawn from such land employed in tillage." 



In establishing a cost for pasture the steps are (i) to reduce 

 the pasture to a unit basis, that is, the number of acres needed 

 per cow, and the months that a cow can be fed on such pas- 

 ture, (2) to estimate the land rental, which should be charged 



' New York Agr. Exp. Sta. (Cornell), Bull. No. 364, p. 126. 

 ' " Select Chapters and Passages from The Wealth of Nations," Adam Smith, 

 p. 133- 



