FARM PROFITS. 3 
These are factors that can not always be measured in dollars and 
cents in considering whether the farm business is profitable or not. 
From a strictly business standpoint, assuming that every business 
should pay a fair rate of interest on the investment therein and a 
fair return for the labor expended in its operation, there may be 
drawn rather definite conclusions relative to the farmer’s returns. 
When these aremade, how- 
ever, the compensating 
factors, such as increase in 
value of land, the living 
furnished by the farm, the 
sentimental appeal of the 
home site, and the per- 
sonal desires of the farmer, 
should be kept in mind. 
= 
ary 
ts ge 
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SOURCES AND CHARACTER 
OF DATA. _ 
{A 
This bulletin presents THe pieater 
the data obtained through 
from five to seven years’ 
continuous analyses of the 
business of 185 farms in three areas, one each in Ohio, Indiana, 
and Wisconsin. (See fig. 1.) 
The data for the area in Ohio are for 25 farms for seven years, 
1912-1918. These farms are located in Palmer township, Washington 
County—a township typical of the hill land of southern and eastern 
Ohio. The data for the area in Indiana are for 100 farms for seven 
years, 1910 and 1913-1918. ‘These farms are located in Forest and 
Johnson townships, Clinton County—townships typical of crop and 
live-stock farming in north central Indiana. The data for the area 
in Wisconsin are for 60 farms for five years, 1913-1917. These farms 
Fic. 1.—Map showing the location of the counties in which 
these studies were made. 
as the money earned by his capital. A “minus” labor income means that the farmer received no money 
returns above food, products, fuel, and house rent for his year’s labor, and that he lacked the amount indi- 
cated by the minus sign of paying 5 per cent interest on the farm capital. 
Per cent return on capital.—The rate returned on the farm capital after the value of the farmer’s labor is 
deducted from the farm income. It represents what the investment earned after all expenses have been 
deducted and the farmer has received a fair wage for hislabor. When the per cent return on the capital 3s 
preceded by the minus sign, it means that the farmer did not realize even fair wages for his own labor and 
management, thus leaving nothing for the earnings on the farm capital. 
In computing the return on capital the values of supplies furnished by the farm toward the family living 
have not been carried in the financial accounts for the reason that if they are carried as a receipt to the farm 
they likewise must be added as a part of the farmer’s own wages. The value given to the farmer’s own 
labor is in addition to what the farm contributes toward his living. 
Animal unit.—In order to compare the different classes of animals and to compute the total amount of 
live stock on these farms all stock has been computed in terms of animal units. In these areas one horse, 
cow, or steer was counted as one animal unit; two head of young stock (of the above kind) were counted as 
one animal; 7 sheep, 5 hogs, or 100 chickens were each counted as one animal unit. The number of pro- 
ductive animal units includes all stock except work stock. 
