28 CIRCULAR 905, U. S. DEPARTMENT OF AGRICULTURE 
ing systems considered and offer an opportunity for profitable utili- 
zation of forage (table 12). Some of the other systems compared 
in table 12 require relatively low investments to consume a given quan- 
tity of forage—for example, beef-herd systems and the high-forage- 
ration dairy system—but returns per dollar of investment are lower 
than for hogs.” 
TIMING OF INVESTMENT AND RETURNS 
Many farmers place a high premium on present income; they are 
reluctant to invest if they cannot expect quick returns. This situation 
particularly characterizes beginning farmers who are short of capital 
and tenant operators who are not assured of being able to remain on 
a particular farm for more than 1 or 2 years. Unless returns on an 
investment can be realized within that time, the tenant may not be 
able to realize any return at all.* Other farmers can be indifferent 
as to the time span involved before returns on new investments are 
realized. As the timing of returns is more important to some classes 
of farm operators than others, data have been derived to indicate the 
length of time required for a turn-over of capital under the different 
feeding systems. 
The length of time it would take to pay for the original investment 
in livestock from income remaining after paying for feed, labor, and 
miscellaneous costs of production if prices stayed at their 194448 
level is shown in table 13. The length of time required to pay for 
the initial investment in buildings and equipment as well as for live- 
stock from returns above all production costs is shown in table 14. 
In these comparisons, the original investments are assumed to be re- 
tained in each enterprise year aiter year. It is recognized, however, 
that any livestock enterprise can be liquidated at any time and at 
least a portion of the investment recouped. In the case of feeder 
cattle, this is done at the end of each production period. 
Data in tables 13 and 14 are presented separately for these reasons: 
Qn many owner-operated farms, buildings have been provided in pre- 
vious time periods. If not used for livestock they would stand idle. 
On most rented farms, buildings are provided by the landlord at no 
cost to the operator. In such situations only the rate at which invest- 
ments in livestock are regained needs to be considered by the oper- 
ator (table 138). Investments in buildings and equipment are not 
relevant. But on many farms operators may not be able to adopt 
livestock enterprises unless they provide buildings and equipment. 
“The data in table 12 may under some circumstances underestimate the 
returns per $100 investment obtainable from feeding systems that involve a 
‘high proportion of forage because the value of forage fed was imputed at the 
market price. If, as is often the case, no market exists for the sale of forage 
this imputed value may be too high. In that case the real cost of the forage 
may be the cost of harvesting and feeding it. Where the forage is fed as pasture 
this cost may be very small. Livestock systems that utilize large quantities 
of pasture forage may be considerably more profitable in such cases than is 
indicated in table 12. 
*% Many owner operators and landlords may also plan on the basis of a very 
short span. Owner operators or landlords who are advanced in age and who 
do not look forward to many additional years may take a “short-term” view. 
They may prefer to get as much income as possible in the near future to in- 
crease values in their estates. 
