FARMERS ' EARNINGS IX SOUTHEASTERN PENNSYLVANIA 39 
SUMMARY 
The dairy enterprise is the central point in the organization of most 
Chester County farms. Although under special conditions other 
products, such as mushrooms, poultry, or crops, may become equally 
important sources of cash income, for most farmers dairy farming is 
most profitable. Unusually energetic and capable dairymen, how- 
ever, can add to their returns by combining mushroom production 
with dairying. 
Under the conditions of the year of the survey, dairy and poultry 
products were relatively more profitable as compared with crops than 
they have usually been. For this reason the conclusion that during 
that one year only the number of cows and not the acres of crops 
affected operator's earnings, should not be taken to mean that under 
usual conditions crops do not contribute to farm earnings. With 
more favorable prices than prevailed in 1922 and 1923, the acreage of 
crops would be more important in relation to net returns. 
The efficiency with which the dairy enterprise was conducted was 
the most important factor in causing differences in earnings. A large 
part of the variation in dairy efficiency was due to the intelligence and 
care that fanners used in selecting, feeding, and caring for their cows. 
Intelligent and skillful dairy management is essential to success on 
most Chester County farms. 
Some individual specialized mushroom farms made large earnings, 
and the operator's earnings on these farms averaged about S650 above 
the earnings on dairy farms. With the possible extent of the demand 
for mushrooms still to be determined, and with supplies of manure 
suitable for mushrooms tending to become limited, no statement can 
be made as to how long mushroom production will prove more profitable 
than milk production. 
METHODS OF MEASURING COMPLEX FACTORS 
CHARGE FOR USE OF LAND 
The u operator earnings" method of computing returns to the 
farmer depends upon allocating to all factors in production except the 
operator what those factors are worth as shown by the going market 
rate, leaving the operator as the residual claimant. 
The differences between the charges made for the use of land under 
the operator's earnings method and the charge which would have been 
made on the labor income method, are shown in Table 37. 
The labor income method of obtaining the charge for the use of 
kmd varies in three particulars from the general principle of valuing 
each factor at what it is worth "on the market:" (1) All that the 
land contributed to the annual product is the use of that land for one 
year: (2) a considerable part of the value of the farm represents a 
dwelling which is not directly utilized in the production of agricultural 
products: and (3) the current mortgage rate of interest is not a good 
measure of the percentage return which farm land should be expected 
to yield. As H. C. Taylor has worked out on a theoretical basis 
{18, pp. 106-107), later proved by a study of the facts in the case (^ pp. 
28-46), the general expectation of continuing increases in the 
value of land tends to hold its price at a higher level than is justified 
by its current earning power. That is, the current interest obtained 
from investments in land which is expected to increase in value can 
