CHAPTER V 



THE COST OF CATTLE 



The charge for cattle or for their use is the most disputed 

 item of milk cost. A question that first arises is shaU the 

 cows be invoiced at cost of production or at a price at which 

 they could be bought or sold as milch cows. Most cost ac- 

 counts make use of the latter figure. The cows are valued at 

 the beginning of each year at what is believed to be a fair 

 sale or purchase price of the animals, even if they have been 

 raised at less actual cost. This is not good business, for 

 it inflates the capital really invested, and does not represent 

 actual cost. In a previous chapter the feed charge is based 

 on selling price of feeds raised on the farm; with cows, how- 

 ever, the cost of production is recommended as a basis for 

 computing the cost. This may seem inconsistent, but the 

 charges are not on the same basis, for the farm is independent 

 of the dairy. The cost records are kept for the purpose of learn- 

 ing the income from the dairy itself. Profits may be secured 

 from the farm and it is unfair to give to the cows the credit 

 for the management and risk of that enterprise. The raising 

 of cows, on the other hand, is a part of the work of the dairy, 

 and, if the animals are sold the business is that of raising cows 

 and not of producing milk. 



In calculating the cost of cattle in milk production, there- 

 fore, the depreciation, interest, insurance, and taxes should be 

 based on the cost of producing the cows if they are raised by 

 the dairyman, or on purchase cost if bought. When the cost 

 of production is less than purchase price for the same grade 

 of cows, the advantage of raising the cows is apparent. Often, 

 however, cows can be purchased for less than it would cost to 

 raise them. To build up permanent dairies it is necessary to 

 raise the cows, especially if a high-producing, healthy herd is 



