UNITED STATES DEPARTMENT OF AGRICULTURE 
trik BULLETIN No. 994 
ISpTly Contribution from the Office of Farm Management 
SSgjfff? and Farm Economics 
-JwPS H. C. TAYLOR, Chief 
Washington, D. C. ▼ November 15, 1921 
METHODS OF CONDUCTING COST OF PRODUCTION 
AND FARM ORGANIZATION STUDIES. 
By F. W. Peck, Farm Economist. 1 
CONTENTS. 
Introduction 1 
The uses of cost studies 2 
Basic elements of cost 7 
Presentation of results 8 
The several methods of study 14 
Page. 
The accounting method 15 
The survey method — .• 39 
Combinations of survey and accounting 
methods 46 
INTRODUCTION. 
In 1902 the Minnesota Experiment Station began studies of the 
cost of production and of farm organization, which have been con- 
tinued up to the present time. The Office of Farm Management, 
United States Department of Agriculture, began cost studies in 
1906, and was closely followed by various State organizations. 
The economic changes caused by the World War accentuated the 
growing demand for facts concerning the business side of the farmers' 
production of food. During the war it was necessary to husband 
the supply of certain food products; and to provide the food for 
large numbers in foreign countries it became imperative to obtain 
as large a production as possible of the staple food products. At 
the same time prices were fixed for various commodities for the 
purpose of stabilizing the market and acceleratiug the production 
and movement of war supplies. From the experiences with the 
setting of food prices it became apparent that there was a lack of 
comprehensive, conclusive data relating to the factors necessary 
to the understanding of the financial side of the farmer's business. 
The rising prices brought about by the war created many local 
disturbances of prices of farm products, a ready example of which 
is found in the controversy over the cost and price of milk in many 
1 Since July 1, 1921, Director of Agricultural Extension, University of Minnesota, 
-21— Bull. 994 1 
