22 BULLETIN 1400, U. S. DEPARTMENT OF AGRICULTURE 
This same general relation between size and operator's earnings 
hold for farms of other types (Table 19). For the small-dairy group 
of farms dairy farms with large poultry enterprises — and the mush- 
room-dairy farms the larger the farm (and hence the greater the 
number of cows) the larger the earnings. For the crop farms and the 
mushroom farms, however, there was but slight relation between 
the areas in crops and the earnings. On these farms more acres did 
not mean more cows, as they did on the other three types. This shows 
again the importance of the size of the dairy herd as a determinant 
of farm profits in this region. 
EFFICIENCY OF OPERATION 
The previous tables have shown the relation to farm earnings of the 
combination of enterprises and the size of the business, without mak- 
ing any mention of the relation of the efficiency with which the dif- 
ferent operations were conducted to farm earnings. 
"Efficiency" is a term which is frequently used with only a hazy 
idea of exactly what is meant. For the purpose of this discussion, 
it may be more sharply defined as the relation of the value of the 
product from any given enterprise to the cost of the things directly 
used in producing that product. Thus the efficiency of the dairy 
enterprise may be approximately measured by the extent to which 
the milk and veal calf, if any, prcduced by each cow exceeds the value 
of the feed consumed. This excess of the value of the product over 
the most important cost will be used as an index of efficiency for the 
dairy enterprise. 
To get a similar index of the efficiency with which crops are pro- 
duced, it would be necessary to deduct from the value oi each kind 
of crop produced the principal costs — fertilizer, seed, and labor — 
used in producing it. Since no satisfactory data of the differences 
in crop production requirements on the different farms were obtained, 
it was necessary to leave them out of account, and to use merely the 
differences in crop yields as a measure of the efficiency of the crop 
enterprise. 
In this region the variations in practices in crop production from 
farm to farm are much less than are the differences in the handling 
of the livestock, so this omission is not so serious as would be the 
same usage for the dairy enterprise or for crops in other areas where 
there are wider variations in crop-production efficiency. 
Hence the standard crop index, which expresses the average re- 
lation between the yields of each crop on a given farm and the average 
yield for the area, is taken as the index of the efficiency of crop 
production. A crop index of 110 for a given farm means that on 
t he average the crops*of that farm were 10 per cent above the average 
yield per acre for each crop; one of 80 would mean that the yields 
averaged 20 per cent below the average for the area. 
A considerable part of the expenses paid by farmers in this region 
is for labor, so it would seem that the efficiency with which human 
labor is used would be one important factor in determining farm 
earnings. There is normally a considerable variation in the labor 
on different farms, both with the area in crops and the number of 
cows kept. This normal difference in labor would have to be allowed 
for, before comparing the labor used on different farms to obtain a 
measure of efficiency. 
