12 BULLETIN - 1144, U. S. DEPARTMENT OF AGRICULTURE. 
a uniform rate, some farmers find that they got full market price 
for their feed, while others fell far short of it. 
OTHER COSTS— INCIDENTALS, OVERHEAD. 
Feed and labor make up by far the largest part of the cost of pro- 
ducing milk, but in addition to these major costs there are other items 
which must be considered in figuring total costs, such as cow cost, 
bull service, buildings, equipment, bedding, and general expenses 
(items of irregular amount and occurrence, such as insurance, vet- 
erinary expense, cow testing, and organization dues). 
While it is true that these overhead expenses are higher for pure- 
bred herds than for grade herds, and for high-producing herds than 
for low-producing herds, they do not vary regularly with production, 
nor do they bear any close and necessary relation to feed and labor 
costs on any given farm or group of farms. The Pearson formula * 
assigns 25 per cent of the total cost to these items. A study of costs 
in New Hampshire in 1911 showed them to form about 10 per cent. 
In western Washington in 1917-1920 they were found to be 20 
per cent. In northwestern Indiana they were nearly 23 per cent. 
In these latter studies the overhead costs were largely offset by the 
credits. At what figures these costs will settle in any period under 
observation is determined by the prices and valuations of the sundry 
items involved, and having been once established they maintain the 
given relations only if prices rise and fall together and in the 
same proportions. It is possible by modifying operations to reduce 
the proportion of overhead expense to total costs, and particularly 
to reduce this item in the cost of 100 pounds of milk by increasing 
production. 
COW COST. 
Cow cost is based on the fact of depreciation, whether caused by 
death (which entails practically the total loss of the value of the 
animal) , by culling, or by price changes. It also includes an allow- 
ance for interest on the investment in cows, which, however, is not a 
loss. Cow cost is a very variable figure at best. 
On these farms, 775 different cows were used to maintain an aver- 
age for the year of 630.25 cows. There were 621 cows on these 48 
farms January 1, 1920, appraised at $165 each; 24 cows were pur- 
chased at an average of $195 ; 130 heifers freshened for the first time 
during the year, valued at $125 each; 112 cows were sold for $150 
each; 13 died and were practically a total loss; and there were left 
on the farms at the end of the year 650 cows, valued at $130 each. 
This gives a depreciation of 18 per cent for the year, or $35.20 per 
head for the average number kept, or 48 cents per 100 pounds of 
milk. This depreciation was unusually large, owing to the high 
price of cows in the fall of 1919, which established the value at the 
beginning of the year, while at the end of the year appraisal was 
unduly low because of discouragement over milk prices, resulting in 
4 In the course of the controversy over prices for fluid milk in the Chicago milk district 
in 1917 Prof. F. A. Pearson, then of the University of Illinois, Drought out a statement 
of the unit requirements for producing milk to be used in computing a fair price to pro- 
ducers for fluid milk under changing costs of labor and feeds. See Bulletin 216, Univer- 
sity of Illinois. 
