26 CIRCULAR 905, U. S. DEPARTMENT OF AGRICULTURE 
portunities exist for the employment of this labor, the labor used dur- 
ing the production period involves a postponement of income.” 
Many farmers lack capital to keep enough livestock to consume 
all the forage produced, even though the livestock system requiring 
the smallest investment of capital is adopted. If capital is extremely 
limited it may be impossible to invest in any livestock. But it would 
still be profitable to produce forage in the complementary range even 
though capital were not available to buy the livestock to use the forage. 
Livestock enterprises can be gradually built up to utilize the forage 
profitably with a very small initial investment. If, for example, a 
farmer has funds enough to buy a few heifers he can gradually ac- 
cumulate a herd of cows. Although the heifers cannot consume all 
of the complementary forage at the start, an increasing quantity of 
it can be utilized as a larger herd of cows-is accumulated. 
RETURNS ON INVESTMENT IN RELATION TO FEEDING SYSTEM 
Minimizing the capital investment is not the only nor even the most 
important goal. The objective is more nearly one of getting the 
greatest return per dollar of investment. This may sometimes be 
obtained with a system other than the one that requires the smallest 
investment per ton of forage consumed. 
A comparison of the estimated annual net income per $100 of in- 
vestment associated with alternative feeding systems is given in table 
12. In each of the three price periods considered, hogs gave sub- 
stantially higher returns per dollar of investment than other classes 
of livestock. In 194448, for example, hogs on pasture that received 
a moderate quantity of forage returned a net income of $83.01 annually 
per $100 of investment. ‘This was well above the returns obtainable 
from a similar investment in any of the other types of livestock con- 
sidered. But capital limitations may keep many farmers from es- 
tablishing a hog enterprise of sufficient size to utilize all the comple- 
mentary forage. An initial investment of $17,072 in livestock alone 
was required in 1944-48 to establish a hog enterprise large enough 
to consume 100 tons of forage in the form of pasture. In addition, an 
investment of $12,113 was required to provide buildings and equipment 
for an enterprise of this size when these facilities were not already 
provided. Furthermore, the returns for each class of livestock were 
computed on the basis of average operations. As the number of hogs 
handled on a farm increases diminishing marginal returns can be 
expected. 
On Corn Belt farms, a combination of livestock enterprises ordi- 
narily is more profitable than a single type of livestock." Availability 
of labor at critical periods, lack of space or facilities, and other factors 
place practicable limitations on the extent to which a single enterprise 
can be expanded. Although a farmer may be unable to utilize all his 
forage with hogs alone, hogs give a high return relative to other feed- 
On many farms the labor used in production of livestock has no alternative 
use. For those farms the labor cost shown in table 11 greatly overvalues the 
labor required to handle the livestock. Computed costs of feed may a'so be a 
good deal too high for farms that do not have an alternative market for forage. 
“This study does not undertake to determine the optimum combination of 
livestock on a farm. Other studies under way by Iowa State College and the 
Bureau of Agricultural Economics analyze problems of livestock combination. 
