The economics of pasture integration on irrigated farms
by Clarence William Jensen
A THESIS Submitted to the Graduate Faculty in partial fulfillment of the requirements for the degree
of Master of Science in Agricultural Economics at Montana State College
Montana State University
© Copyright by Clarence William Jensen (1952)
Abstract:
Over the past several years there has been quite a large amount of written material, both popular and
professional, on the subject of the relative profitability of seeded pastures. This study is an attempt to
determine the economic position of the pasture enterprise in the irrigated farm unit.
In Part I a review of the literature in the field of forage production is followed by a discussion of the
methods of determining the proportions of crops and forages to be established in the farm organization.
Part II deals with methods of apportioning enterprises and attempts to establish a favorable relationship
between the budget method of organizing the farming system and the theory of enterprise selection and
combination* A budget of the "typical" farm organization for the area of study is developed in Part III
Alternative budgets are developed, with some emphasis given to the effects upon the various
organizations from variations in farm product prices.
The conclusions in Part IV are "based upon interpretations of the position the pasture enterprise may
hold in the irrigated farm unit. THE ECONOMICS OF FASTUEE INTEGEATION
ON IEEIGATED FAHMS
CLAEENCE WILLIAM JENSEN
A THESIS
S u b m itte d t o t h e G ra d u a te F a c u lty
in
p a r t i a l f u l f i l l m e n t o f th e r e q u ir e m e n ts
f o r th e d e g re e o f
M a ste r o f S c ie n c e i n A g r i c u l t u r a l Econom ics
at
M ontana S t a t e C o lle g e
A pproved %
J .^iiyH
u L
eati1, ^EAjor Depe^f:m ent
C hairm an, E xam ining Com m ittee
Bozeman, Montana
J u l y , 1952
-V//■
frl37f
J 4 5 3 e
2
C h ». 2 -
TABLE OF COMTEKTS
T itle
Page
L i s t o f T a b le s • « . * ............................ .... .................................... ....
U
L i s t o f F ig u r e s
................................................................. .... .........................................
5
A cknow ledgm ents
. . . . . . . . . .
6
A b stra c t . . . . . . . . . . . . .
PART I .
A.
INTRODUCTION
.
........................................................ . .
.........................................................................
............................................................................... .... .
Review o f t h e L i t e r a t u r e
..............................................
7
8
8
1.
P o p u la r L i t e r a t u r e . ......................................................................
2.
P r o f e s s i o n a l L i t e r a t u r e ..............................................
10
3»
Summary
16
. . . . . . . . . . . . . . . . . . . . . .
8
B.
The Problem ........................................................................................................
I?
Co
E n t e r p r i s e S e l e c t i o n and C o m b in atio n
18
PART I I .
A.
. . .
..............................
1.
C o m p e titiv e E n t e r p r i s e s
2.
C om plem entary E n t e r p r i s e s
3»
S u p p le m e n ta ry E n t e r p r i s e s ............................................................. 22
Uo
T heory o f E n t e r p r i s e S e l e c t i o n and C o m bination . . .
22
5.
The C o m p etitiv e-C o m p lem en tary Continuum
. . . . . .
23
................................. . . . . . . . . .
29
METHODOLOGY
. . . . .
The B udget Method . . . . . .
.......................................................
...........................
20
...............................................................
1.
The B udget D e s c rib e d . . . . . .
2.
D ata R eq u ire d
3«
18
29
................... . . . . .
29
. . . . . . . . . . . . . . . . . . .
31
R e l a ti o n t o T heory o f E n t e r p r i s e
S e l e c t i o n and C o m b in atio n . . . . . . . . . . . . .
33
103018
3
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PART H o
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A lte rn a tiv e s © © © © © © © © © © © , © © © o © © © © ®
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Income V a r i a t i o n
COUCLUSI OHS
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The R ole o f I r r i g a t e d R is tu r e s i n Farm O r g a n iz a tio n s
B©
I m p lic a tio n s f o r I r r i g a t i o n D evelopm ent * © * © © * « © 0
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M ethodology © © © © © * © © © © ©
©©©*©©©©©©©©
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AiPPEUDIX o o o e e o e o o o e * © * © © © * * * * ® * * ® ® * * ®
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A ppendix A
* © * © * 0 0 * * * © © © © * * © © * * * * * * ©
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A ppendix B
©©©©©©©©©©©©®©* ®®©®
85
AppendlX C
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BIBLIOGEAEHY e o o , © e © o © e © © o ® ® 6 ® ® ©
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93
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LIST OF TABLES
Number
I
II
III
17
V
VI
T itle
Page
I r r i g a t e d P a s tu r e P r o d u c tio n ( p e r a c r e )
ZLZl S©3.©C*b0Ci S t a t e s » 0 0 0 0 0 0 o o e o o e o e o o o
14
P r o d u c tio n , C o s ts , and R e tu rn s (100 a c r e s ) W ith
D i f f e r e n t G ra in and Hay R o ta tio n s (W o o ster, O hio,
1 9 3 7 -4 3 )• A v erag e o f C o sts and P r ic e s f o r 1940-L 4 * «
37
C o st and Income R e la tio n s h ip s (fro m T able I l ) .
39.
» , « <>
E s ta b lis h m e n t and M ain ten an ce C o sts
P e r A cre (1 9 4 8 -4 9 p r i c e s ) .
43
E s tim a te s o f P r o d u c tio n ( i n pounds o f TDN's)
48
S iz e G rouping o f Sample Farms
'51
B udget f o r Crop P r o d u c tio n . « < > « « .
53
B udget f o r Crop P r o d u c tio n E x p en ses
55
B udget f o r L iv e s to c k P r o d u c tio n
59
B udget f o r L iv e s to c k E x p en ses
6l
I n v e n to r y o f M ach in e ry , B u ild in g s , and E quipm ent . « o
65
I n d i r e c t and F ix e d Farm E x p en ses o e o e . o o o o e o
66
X III
B udget Summary o f R e c e ip ts 'a n d E x p e n s e s . . . . . . o o
68
XIV
B u d g et Sum m aries o f R e c e ip ts and E xpenses f o r
O r ig in a l an d T hree A l t e r n a t i v e Farm O r g a n iz a tio n s . » »
71
XV
C o e f f i c i e n t s o f V a r i a t i o n f o r th e M ajor Farm P r o d u c ts
In c lu d e d i n th e B udgeted O r g a n iz a tio n s . . . . . . . .
75
XVI
G ro ss Income C o e f f i c i e n t o f V a r i a t i o n and
N et Income V u l n e r a b i l i t y f o r th e D i f f e r e n t
O r g a n iz a tio n s B udgeted . . . . . . . . e . . . . . . .
76
V II
V III
IX
X
XI
X II
LIST OP FIGURES
Humber
1
2
3~
Page
C o m p e titiv e-C o m p lem e n tary R o ta tio n R e la tio n ­
s h ip s o f G ra in Crops and P a s tu r e . . . . . . . . .
.
2k
R o ta tio n R e la tio n s h ip s o f G ra in Crops
and P a s tu r e and P r ic e R a tio s . . . . . . . . . . .
.
26
L ab o r D i s t r i b u t i o n on 120-A cre C ro p -D airy Farm . .
e
63
6
.
ACKNOWLEDGMENTS
The a u t h o r w is h e s t o e x p r e s s s i n c e r e a p p r e c ia ti o n t o P r o f e s s o r s
C h e s te r B® B a k e r, Edward H® W ard, and Roy E» Huffm an, members o f th e
t h e s i s co m m itte e , f o r t h e i r h e l p f u l s u g g e s tio n s , c r i t i c i s m s , and g u i­
d an ce th ro u g h o u t t h e w r i t i n g o f t h i s th e s is ®
The Y e llo w sto n e and S t i l l w a t e r C ounty o f f i c e s o f th e P r o d u c tio n
and M a rk e tin g A d m in i s t r a ti o n , County A g en ts o f b o th c o u n t ie s , th e S o il
C o n s e rv a tio n D i s t r i c t o f f i c e , and th e H u n tle y I r r i g a t i o n P r o j e c t o f f i c e
w ere v e r y h e l p f u l i n d raw in g up th e l i s t o f fa rm e rs h a v in g seed ed
i r r i g a t e d p a s tu r e s ®
An e x p r e s s io n o f th a n k s i s a ls o due th e fa rm e rs who gave o f t h e i r
tim e and e f f o r t i n s u p p ly in g th e in f o r m a tio n f o r th e s c h e d u le s .
7
THE ECOHOH CS OF PASTtJEE INTEGEATIOH OH IERIGATED FARMS'
ABSTRACT
O ver th e p a s t s e v e r a l y e a r s t h e r e h a s "been q u i t e a l a r g e amount o f ■
w r i t t e n m a t e r i a l , b o th p o p u la r and p r o f e s s i o n a l , on t h e s u b j e c t o f
t h e r e l a t i v e p r o f i t a b i l i t y o f se e d e d p a s t u r e s . T his s tu d y i s an a tte m p t
t o d e te rm in e th e econom ic p o s i t i o n o f th e p a s tu r e e n t e r p r i s e i n th e
i r r i g a t e d farm u n i t r
In P a r t I a re v ie w o f th e l i t e r a t u r e i n th e f i e l d o f f o r a g e
p r o d u c tio n i s f o llo w e d by a d is c u s s io n o f th e m ethods o f d e te rm in in g
th e p r o p o r tio n s o f c ro p s and f o r a g e s to be e s t a b l i s h e d i n th e farm
o rg a n iz a tio n ,
P a r t , I I d e a l s w i t h m ethods o f a p p o r tio n in g e n t e r p r i s e s and a tte m p ts
to e s t a b l i s h a f a v o r a b le r e l a t i o n s h i p b etw ee n th e b u d g e t m ethod o f
o r g a n iz in g th e fa rm in g s y ste m and th e th e o r y o f e n t e r p r i s e s e l e c t i o n •
and c o m b in atio n *
A b u d g e t o f t h e t y p i c a l ” fa rm o r g a n i z a t i o n f o r th e a r e a o f s tu d y
i s d e v e lo p e d i n P a r t I I I ? A l t e r n a t i v e b u d g e ts a r e d e v e lo p e d , w ith
some em phasis g iv e n to t h e e f f e c t s upon th e v a r io u s o r g a n iz a ti o n s fro m
v a r i a t i o n s i n fa rm p ro d u c t p r ic e s *
The c o n c lu s io n s i n P a r t IF a r e "based u p o n i n t e r p r e t a t i o n s o f th e
p o s i t i o n t h e p a s tu r e e n t e r p r i s e may h o ld i n th e i r r i g a t e d f arm xu n i t „
8
PART I .
INTRODUCTION
.R eview o f t h e L i t e r a t u r e
T hrough o u t t h e n a t io n a g r e a t e r em p h asis i s b e in g p la c e d upon th e
p o s i t i o n o f th e p a s tu r e e n t e r p r i s e i n t h e management and o p e r a tio n o f
th e farm b u sin ess®
Of p a r t i c u l a r i n t e r e s t t o t h i s s tu d y i s th e a p p a r e n t
t r e n d to w a rd in c r e a s e d p a s tu r e a c re a g e s in th e i r r i g a t e d a r e a s o f t h e
West®
T h is i s
a p p a r e n t89 i n th e s e n s e t h a t th e im p o rta n c e and fre q u e n c y
o f o c c u rre n c e o f p a s tu r e s on farm s i s now recognized® ' However, t h e r e i s
to o l i t t l e
in f o r m a tio n a v a i l a b l e a s to t h e num ber o f a c r e s o r t h e number
o f p a s tu r e s i n u s e i n y e a r s p a s t w i t h w h ic h t o make a v a l i d comparison®
P o p u la r L i t e r a t u r e - *” In r e c o g n i tio n o f th e d e s i r e by fa r m e r s f o r ,
in f o r m a tio n r e g a r d in g th e c o s t s and r e t u r n s o f seed ed p a s t u r e s , th e m ost
p ro d u c tiv e m ix tu r e s o f s e e d , management p r a c t i c e s r e q u ir e d i n e s t a b l i s h =
m ent and- m a in te n a n c e , and th e p r o d u c tio n c a p a b i l i t i e s o f th e s e p a s t u r e s ,
p u b li s h e r s o f farm and o t h e r m ag azin es have resp o n d ed w i t h numerous
a rtic le s ®
Of t h e s e , one h a s b een s e l e c t e d a s r e p r e s e n t a t i v e and e s p e c i­
a l l y a p p l i c a b l e to t h i s p a r t i c u l a r area® JLzZ
The a u t h o r (Mr® O’ B r ie n ) makes no a tte m p t a t an econom ic stu d y
o t h e r th a n b y t h e i m p lic a tio n o f i n c r e a s e d p r o f i t s r e s u l t i n g f ra n de­
c r e a s e d l a b o r and o p e r a tin g co sts®
The a r t i c l e was w r i t t e n p r i m a r i l y
f o r farm r e a d e r s b u t i n su ch a m anner t h a t i n t e r e s t m ig h t be s tim u la te d
\ J O’B r ie n , H arry R®, 9-New P a s tu r e P r o f i t s f o r th e W e st,? C o u n try
G en tlem an , P h i l a d e l p h i a 5s Na®, V o l® CXXII , No® 5 , M arch, 1952, p» 27®
9
i n o t h e r r e a d e r s a s w e ll*
(
.
T h is i s 'ac c o m p lish e d by ch o o sin g a few
.
•
.
s t r i k i n g l y s u c c e s s f u l o p e r a t o r s #10 have e s t a b l i s h e d p a s tu r e s on t h e i r
farm s and u s in g them a s exam ples upon w h ic h to b u i l d a Rs t o r y
The t i t l e
i t s e l f , l9ETew P a s tu r e P r o f i t s f o r th e W e s t,” i s i n d i c a t i v e
o f a p o p u la r b e l i e f t h a t p a s tu r e s on i r r i g a t e d la n d a r e 's o m e th in g new,
a n d , i n som e. r e s p e c t s , t h i s may b e tr u e *
I r r i g a t e d p a s t u r e s have
p ro b a b ly re a c h e d a h ig h p o in t i n u s a g e , a n d , a s s u c h , th e y w ould con­
s t i t u t e so m eth in g "new" t o th e West* . Mr» O’B rie n c la im s t h i s t o be a
w id e -s p re a d change i n la n d u s e on t e n s o f th o u s a n d s o f w e s te r n farm s
and r a n c h e s , d w a rfin g th e m i l l i o n - a c r e C e n tr a l Colum bia b a s in a s t o
s i z e and im p o rtan ce *
The s ta te m e n t i s made t h a t c u l t i v a t e ^ c ro p a c re a g e s
a r e b e in g re d u c e d t o "make room" f o r p a s t u r e s i n i r r i g a t i o n d i s t r i c t s
t h a t a r e now e s ta b l is h e d *
As an a c t u a l o c c u r r e n c e w ith i n a fa rm p la n ,
t h i s may be t r u e , b u t h a r d ly a s a co m p lete s u b s t i t u t e f o r o t h e r crops® ■
The a u th o r d o e s make m e n tio n o f th e i n c l u s i o n o f p a s tu r e s i n a r o t a t i o n
o f cro p la n d b u t d o e s n o t a tte m p t t o a n a ly z e th e re a s o n f o r , o r th e
b e n e f i t s r e s u l t i n g fro m , t h i s p r a c t ic e *
P a s tu r e p r o f i t s a lo n e a r e n o t
th e o n ly c o n s id e r a tio n i n d e te rm in in g p a s tu r e u s a g e .
I f t h i s w ere s o ,
p a s tu r e s o f a more p erm a n en t ty p e w ould p r o b a b ly be c a l l e d f o r .
T estim o n y o f th e c a r r y i n g c a p a c it y o f i r r i g a t e d p a s t u r e s was
c o l l e c t e d f o r v a r io u s r e g io n s i n th e W est*
One o p e r a to r i n Whitman
C ounty, W ash in g to n r e p o r te d a s i x t y - a c r e p a s tu r e c a r r y in g 200 cows and
c a lv e s " i n m idsum m er," b u t no m e n tio n was made o f th e le n g t h o f th e
10
g r a z in g s e a s o n .
In w e s te r n O regon, y i e l d s th e e q u i v a le n t o f s i x t o t e n
to n s o f a l f a l f a p e r a c r e w ere a t t r i b u t e d to i r r i g a t e d la n d a f t e r 500
t o 1000 pounds o f am m oniated s u l f a t e w ere a p p l i e d .
T his e q u i v a le n t
y i e l d was n o t c l a r i f i e d , l e a v in g t h e r e a d e r to c o n clu d e f o r h im s e lf
t h a t t h i s m u st have b e e n an e q u i v a le n t i n g r a z i n g , p ro b a b ly b a se d upon
f e e d re q u ire m e n ts f o r v a r io u s k in d s o f l i v e s t o c k .
R e g a rd le s s o f th e i n t e r e s t w h ich th e a r t i c l e may be c a p a b le o f
p ro m o tin g , i t w i l l f a l l s h o r t o f g iv in g a fa rm e r th e in f o r m a tio n he
w ould n e e d t o e v a l u a t e ' th e econom ic p o s i t i o n o f p a s tu r e s on h i s fa r m ,
Ho a p p a re n t e f f o r t was made t o d e te rm in e th e c o s ts in v o lv e d i n e s ta b ­
l i s h i n g a p a s t u r e , th e recommended e s ta b lis h m e n t and m a in te n a n c e
p r a c t i c e s , o r th e r i s k s in v o lv e d i n g e t t i n g a p a s tu r e s t a r t e d .
0
,
P r o f e s s i o n a l L i t e r a t u r e — The n e e d f o r more a d e q u a te in f o r m a tio n has
a l s o b e e n re c o g n iz e d b y E x p erim en t S t a t i o n s o f t h e W est.
Many e x p e r i­
m ents have b e e n c a r r i e d on w ith p a s tu r e g r a s s e s and legum es., b o th o f an
agronom ic and a n econom ic n a t u r e .
One o f t h e e a r l i e s t e x p e rim e n ts was
c o n d u c te d a t th e H u n tle y E x p e rim e n ta l Farm,- b e g in n in g i n 1913» 2 / T his
b eg an a s a p r e lim in a r y t e s t o f t h e r e l a t i v e p r o d u c t i v i t y o f v a r io u s
g r a s s e s and le g u m e s , b o th s e p a r a t e l y and i n m ix tu r e s .
T h ree d i f f e r e n t
2 / H ansen, D an, I r r i g a t e d P a s t u r e s , U n i v e r s i t y o f M ontana A g r i c u l t u r a l
~ E x p e rim e n t S t a t i o n B u l l e t i n Ho, I 6 6 , Bozeman, M ontana, S ep tem b er,
192J4, p . 6 .
11
.
m ix tu re s w ere, u s e d ( l a b e l e d M ix tu re N o 's I 9 2 9 and 3 ) 3 /* w ith ea c h
m ix tu re se e d e d b y f o u r d i f f e r e n t m e th o d s»
(a )
These f o u r m ethods w ere
s p r in g se e d e d w ith a n u r s e c ro p o f w h eat c u t f o r g r a i n s ( b ) s p r in g
se e d e d w ith a n u r s e c ro p c u t f o r hays ( c ) s p r in g seed ed w ith o u t a n u r s e
c ro p s and (d ) l a t e summer s e e d in g w ith o u t a n u r s e crop=
Method ( c )
o u t - y i e l d e d m ethods ( a ) and (b ) by 1=5 to n s o f h ay 9 and m ethod (d )
by 2=5 to n s i n th e f i r s t two y e a rs=
o th e r s i n yield®
A ls o 9 m ix tu r e No= I ex ceed ed a l l
A f t e r t h e seco n d y e a r , t h e r e was l e s s y i e l d d i f f e r e n c e
i n th e v a r io u s m ethods o f s e e d in g , w ith t h e No® I m ix tu re m a in ta in in g
th e h ig h e s t y ie ld s®
Even th o u g h th e n o n -n u rs e cro p m ethod p ro d u ced
t h e h ig h e s t y i e l d s o f h a y th e f i r s t two y e a r s , t h i s was s t i l l n o t th e
m o st p r o f i t a b l e method=
U nder m ethod ( a ) a w h eat cro p y i e l d o f 35
b u s h e ls p e r a c r e was o b ta in e d , g iv i n g , i n t o t a l , a h ig h e r n e t income
th a n th e o t h e r m ethods =
The e x p e rim e n ts w ere l a t e r ex p an d ed t o in c lu d e a .d e te r m in a tio n o f
th e m ost s u c c e s s f u l g r a z in g r a t e s and v a r io u s o th e r m anagem ent p r a c t i c e s
w h ich m ig h t s e r v e to i n c r e a s e th e c a r r y i n g c a p a c i t i e s o f th e s e p astu res®
T e s ts w ere a l s o c o n d u cted t o a s c e r t a i n th e am ount o f a d d i t i o n a l
3 / M ix tu re C o n te n ts
H ates o f S eed in g (pounds p e r a c r e )
M ix tu re No=I
M ix tu re No=2
Oo4
O
2
2
A w nless b ro m eg ra ss
O rch ard g r a s s
T a ll f e s c u e
P e r e n n ia l r y e - g r a s s
K entucky b lu e g r a s s
W hite c l o v e r
A ls ik e c lo v e r
TOTALS
5
3
3
U
2
2
21
5
3
' ?
.
5
3
O
b
2
O
O
2
17
TF
12
p r o d u c tio n o b ta in a b le fro m to p - d r e s s i n g p a s tu r e s w ith b a rn y a rd m an u re.]+ /
A ll th e e x p e r im e n ta l p l o t s , t o t a l i n g s i x a c r e s , w ere d iv id e d i n t o two
e q u a l p a s t u r e s , A and Bo
P a s tu r e A was g iv e n a t o p - d r e s s i n g o f manure ■
i n th e f a l l o f 1920 and a g a in i n th e f a l l o f 1921 a t th e r a t e o f 12
to n s p e r a c r e .
w ere s im i la r o
A ll o t h e r m a in te n a n c e p r a c t i c e s ' f o r th e two p a s tu r e s
The r e s u l t s a f t e r t h r e e t e s t y e a r s in d i c a t e d a b e n e f i ­
c i a l e f f e c t o f th e m anuringo 5 / The p a s tu r e s w ere g ra z e d by d a i r y cows
♦and m ilk p ro d u c tio n was c r e d i t e d t o th e p a s tu r e s a s y i e l d , w ith av e ra g e
p r i c e s f o r 1918 to 1923 i n c l u s i v e u s e d f o r c a l c u l a t i n g r e tu r n s 0
r e t u r n s a r e n e t o n ly o f s u p p le m e n ta l f e e d .
N et
An in c r e a s e i n n e t r e t u r n s
p e r a c r e o f $60Ol ( g r o s s o f m anure v a lu e and c o s ts o f a p p ly in g ) was
o b ta in e d on p a s tu r e A f o r th e t h r e e - y e a r a v e ra g e (1 9 2 1 , 1922, and 1923)«
H owever, th e i n c r e a s e in I 923 a lo n e was $21«66 p e r a c r e , o r a b o u t 20
p e r c e n t o v e r .p a s t u r e B„
An e x c e p tio n t o t h i s in c r e a s e was t h a t i n 1921,
th e y e a r o f t h e seco n d a p p l i c a t i o n o f m an u re, p a s tu r e A y ie ld e d $2»7^
l e s s p e r a c r e th a n p a s tu r e Bo
T his m ig h t i n d i c a t e an im b alan c e betw een
th e am ounts o f n it r o g e n and p h o sp h o ru s a v a i l a b l e t o th e p l a n t s ,
p ro b a b ly w ith n i t r o g e n p r e s e n t i n e x c e s s iv e am ounts »
The e f f e c t of
to o h ig h a r a t i o of n i t r o g e n upon d i f f e r e n t s p e c ie s o f g r a s s e s i s
in d e te r m in a te , a s a l l th e t e s t p l o t s a p p e a r t o have been lum ped t o ­
g e t h e r w ith o u t r e g a r d t o , s e e d m ix tu r e o r m ethod o f seed in g o
j+ / H ansen, D an, o p . c i t o , p p 0 17=20.
5 / I b i d o , T ab le 1 7 , p , 2 1 .
. 1 5
In 1916» a o n e - a c re p a s tu r e se e d e d w ith th e No. I m ix tu re was
e s t a b l i s h e d t o d e te rm in e i t s maximum c a r r y in g c a p a c it y u n d e r heavy
a p p l i c a t i o n s o f m an u re.
Each y e a r , fro m 1917 to 1923 i n c l u s i v e , t h e '
p a s tu r e r e c e iv e d a to p - d r e s s i n g a t th e r a t e o f ab o u t I 5 to n s p e r a c r e .
The f i v e - y e a r a v e ra g e n e t r e t u r n ( u s in g th e 1918-23 p r i c e a v e ra g e and
g r o s s o f m anure v a l u e ) was $121*71 p e r a c r e , w ith an a v e ra g e c a r r y in g
c a p a c i t y o f 2 .1 3 cows p e r a c r e . 6 /
o f s u p p le m e n ta l feed *
H e re , t o o , th e r e t u r n s a r e n e t o n ly
The h ig h e s t r a t e o f g r a z in g was re a c h e d i n th e
f i f t h y e a r , b e in g 2*14.7 cows p e r a c r e d u r in g a 1 3 6 -d ay s e a s o n , b u t th e
h ig h e s t n e t r e t u r n o f $13k«22 p e r a p re was o b ta in e d in th e t h i r d y ear*
The r e t u r n s f o r th e n e x t two y e a r s d e c l in e d t o $115*26 th e f i f t h y ear* .
. The re c o r d s of. t h e s e p a r t i c u l a r e x p e rim e n ts end i n 19 2 3 , and i t i s
n o t known w h e th e r th e m o d e ra te ly f e r t i l i z e d p a s tu r e ( p a s tu r e A) would
c o n tin u e t o show i n c r e a s e s i n r e tu r n s i n f o llo w in g y e a r s and w h e th e r
th e h e a v i ly m anured p a s tu r e w ould c o n tin u e t o d e c l in e a s i t d id i n th e
f o u r t h and f i f t h y e a r s o f th e t e s t s *
A p a s tu r e e s t a b l i s h e d , i n 1928 by th e O regon A g r i c u l t u r a l E x p erim en t
S t a t i o n was a f o r e r u n n e r o f o t h e r p a s t u r e e x p e rim e n ts t o f o llo w i n t h a t
s ta te *
E s t a b l i s h e d w ith la d in o c l o v e r on la n d p r e v io u s ly abandoned as
w o r th le s s f o r o r d in a r y c ro p p in g p u r p o s e s , i t s s u c c e s s l e d t o th o u s a n d s
o f o t h e r su c h i r r i g a t e d p a s tu r e s i n w e s te r n O regon. 7 /
6 / I M d o , p p * 20=25, and T ab le V , p . 2J4.*
7 / O regon A g r i c u l t u r a l E x p e rim e n t. S t a t i o n , The F i r s t F i f t y Y ears o f th e
” Oregon A g r ic u lt u r a l'E x p e r im e n t S t a t i o n , 1887=1957, S t a t i o n C ir c u la r
125T "6regon S t a t e C o lle g e , C o r v a l l i s , O regon, A u g u st, 1937«
S tu d ie s more r e c e n t l y u n d e r ta k e n show a c o n s id e r a b le v a r i a t i o n i n
th e c a r r y i n g c a p a c i t i e s in th e w e s te r n s t a t e s ( T able l ) ,
T h is may
p a r t i a l l y be a c c o u n te d f o r b y w ide d i f f e r e n c e s i n a l t i t u d e a lo n g .w ith
v a r y in g le n g th s o f t h e grow ing s e a s o n , th e i n t e n s i t y w ith w h ich manage­
m ent i s a p p lie d t o th e p a s tu r e e n t e r p r i s e , and i n th e h ig h e r p ro d u c ­
t i v i t y o f some s o i l s .
T a b le I c
I r r i g a t e d P a s tu r e P r o d u c tio n ( p e r a c r e ) i n S e le c te d S t a t e s , (a )
S ta te
M ontana (d )
Oregon ( e )
C a lifo rn ia ( f )
New M exico (g )
AUM8S (b )
7
8
10
22
■'
TDN E q u iv a le n ts ( c )
3415
2952
4849
10667
( a ) S o u rce f o r ATJM’ss: B a k e r, Co B0, i6The Econom ics o f I r r i g a t e d P as­
t u r e s , 88 t o b e p u b lis h e d i n t h e fo rth c o m in g P ro c e e d in g s o f t h e
S i x t h I n t e r n a t i o n a l G ra s s la n d s C o n g re ss, P e n n s y lv a n ia S t a t e C o lle g e ,
■ S t a t e C o lle g e , P e n n s y lv a n ia , A u g u st 1 7 -2 3 , 1952°
(b ) An 88A nim al U n it Month18■i s th e g r a z in g o f one m atu re cow f o r one
m onth o r th e e q u i v a le n t o f o t h e r a n im a ls . See A ppendix A fo y AUM
c o n v e rs io n t a b l e 0 •
( c ) T h is i s th e e q u i v a le n t of th e T o ta l D i g e s t i b l e N u tr ie n t s r e q u ir e d
b y th e v a r io u s c l a s s e s , a g e s , and w e ig h ts o f l i v e s t o c k ,
( d ) M ontana A g r i c u l t u r a l E x p erim en t S t a t i o n , u n p u b lis h e d d a t a ta k e n fro m
th e Lower F la th e a d V a lle y o f n o r th w e s te r n Montana i n 19U9“ 51°
( e ) Oregon A g r i c u l t u r a l E x p erim en t S t a t i o n B u l l e t i n 3 9 1 , d a ta ta k e n from
e a s t e r n O regon, 1935-36°
( f ) C a l i f o r n i a A g r i c u l t u r a l E x te n s io n S e r v ic e C ir c u la r 1 2 5 s d a t a ta k e n
from n o r t h e r n C a l i f o r n i a ,
«
(g ) New M exico A g r i c u l t u r a l E x p erim en t S t a t i o n B u l l e t i n 3 ^ 2 g a r e a and
p e rio d o f s tu d y n o t s p e c i f i e d . •
• The l e n g t h o f th e grow ing season"' i n New Mexico a lo n g w ith h ig h ,
la n d v a lu e s w ould l i k e l y c a u se management to be a p p lie d much more
i n t e n s i v e l y th a n i n o t h e r s t a t e s , s in c e p a s tu r e s th e r e m ust com pete
15
f o r la n d u s e w ith h ig h l y i n t e n s i v e v e g e t a b le c r o p s o
Management p r a c t i c e s recommended b y th e IfTew Mexico E x p e rim e n t S t a t i o n
(w h ich a r e q u i t e s i m i l a r t o recom m endations b y o th e r s t a t i o n s ) t o in =
c r e a s e p r o d u c tio n in c lu d e r o t a t i o n g ra z in g b y d iv i d in g p a s tu r e s i n t o
s m a ll p ilo ts and moving t h e l i v e s t o c k f r e q u e n t l y , 8 / c l ip p in g to . c o n t r o l
w eed g ro w th ,
num erous l i g h t i r r i g a t i o n s , f e r t i l i z a t i o n w ith com m ercial
f e r t i l i z e r s an d b a r n y a r d m a n u re s, and o c c a s io n a l h a r row ings t o s p re a d
a n im a l d ro p p in g s o 9 /
A s tu d y was c o n d u c te d t o d e te rm in e th e e f f e c t o f fre q u e n c y o f i r r i ­
g a t io n s and f e r t i l i z a t i o n upon th e c a r r y in g c a p a c it y o f i r r i g a t e d p a s tu re s
a t th e C a ld w e ll E x p erim en t S t a t i o n i n s o u th w e s te rn Id ah o =
I t was fou n d
t h a t b y i n c r e a s i n g t h e i r r i g a t i o n s fro m f i v e t o se v e n d u r in g t h e grow­
in g s e a s o n , t h e c a r r y i n g c a p a c it y in c r e a s e d 15 p e r c e n t.
When 12,5
lo a d s o f m anure w ere a p p l ie d a lo n g w ith th e more f r e q u e n t i r r i g a t i o n s ,
th e i n c r e a s e was 58*7 p e r c e n t above t h a t o f t h e l e s s f r e q u e n t i r r i g a ­
t i o n s w ith o u t m an u re,
io /
These a r e a l l exam ples, o f p o s i t i v e r e s u l t s fro m t e c h n o l o g i c a l
i n v e s t i g a t i o n s o f p a s tu r e e s ta b lis h m e n t and m anagem ent.
The Idaho stu d y
8 / W herever th e p r a c t i c e i s p o s s i b l e , th e recom m endation i s t o l a y o u t
" p l o t s o f a s i z e w h ich w i l l c a r r y th e l i v e s t o c k f o r one d a y , o n ly ,
9 / S t a t e n ,' G le n , e t a l , I r r i g a t e d P a s t u r e s i n Eew M exico, A g r i c u l t u r a l
” E x p erim en t S t a t i o n B u T le tin 3 6 2 , ITew M exico -A & M, J u l y , 1953-5 PPo '
5- 17, 28 «
I O / U n ite d S t a t e s D ep artm en t o f A g r i c u l t u r e , siGood P a s t u r e s , ” F arm ers *
B u l l e t i n P o , 1 9 l|2 , W ash in g to n 25, Do Co, May, 19k5s PP0 7 - 8 .
16
i s a good b e g in n in g i n th e d e te r m in a tio n o f in p u t - o u tp u t r e l a t i o n s h i p s
f o r i r r i g a t i o n and f e r t i l i z a t i o n ®
A c o n t in u a ti o n o f t h i s s tu d y to
d e te rm in e t h e s e r e l a t i o n s h i p s a t o t h e r r a t e s o f a p p l i c a t i o n s h o u ld g iv e
a more a c c u r a t e know ledge o f p r o d u c t i v i t y a t v a r io u s in p u t le v els®
W ith in c r e a s e d know ledge o f p r o d u c t i v i t y , a m ore e x a c tin g p a s t u r e manage­
m ent program c o u ld b e e x p e c te d t o y i e l d h ig h e r r e t u r n s t o th e f a r m e r .
In o r d e r t h a t t h e fa rm e r may u s e h is management a b i l i t y m o st f r u i t f u l l y ,
he n e e d s t o know n o t o n ly t h a t t e n to n s o f m anure w i l l in c r e a s e h is
y i e l d s t o f i f t e e n a n im a l u n i t m onths p e r a c r e j he m ust a l s o know how
much g r e a t e r t h e y i e l d w i l l b e th a n i f e i g h t to n s o f m anure a r e applied®
X
The same i s t r u e f o r t h e r e l a t i v e p r o d u c t i v i t y o f d i f f e r e n t f r e q u e n c ie s
o f ir r i g a tio n ®
Summary— The r e i s n o th in g new i n p a s tu r e g r a z in g , a s such®
Mankind
h a s , th r o u g h o u t h i s t o r y , made u s e o f f o r a g e s t o m a in ta in d a i r y and m e a tp ro d u c in g h e r d s o f liv e s to c k ®
However, th e u s e o f i r r i g a t e d la n d f o r
t h e p r o d u c tio n o f f o r a g e s t o b e g ra z e d b y l i v e s t o c k i s c o m p a ra tiv e ly
new .
I n t h i s c o u n tr y , dev elo p m en t o f la n d and w a te r r e s o u r c e s f o r i r r i ­
g a t i o n h a s ta k e n p la c e w i t h i n t h e l a s t 100 y e a r s , l l /
F arm ers i n th e s e
d ev elo p m en t a r e a s have been c o n s t a n t l y e x e r c is in g t h e i r b e s t judgm ent
a s t o w h ich c ro p s t o p ro d u c e , a tte m p tin g t o f in d th e " b e s t " c o m b in a tio n
l l / n o r th e r n G re a t P l a i n s C o u n c il, Toward S t a b i l i t y i n th e G re a t P la i n s
““
Economy, The A g r i c u l t u r a l E x p erim en t S t a t i o n B u lT eH n ™ 5 9 9 7 ^h !v erH ri
o F T le b ra s k a , C o lle g e o f A g r i c u l t u r e , L in c o ln , E e b r a s k a , J u l y , 1950,
P® 5 1 .
17
of e n te rp ris e s o
T h e ir e x p e r ie n c e s have b e e n t a k e n .up i n p o p u la r l i t e r ­
a t u r e and w ould co n v ey t h e im p r e s s io n t h a t , i n some in s ta n c e s * p a s tu r e s
a r e so p r o d u c tiv e a s t o be a b le t o r e p la c e a l l o th e r farm c ro p s and
s t i l l y i e l d a h ig h e r incom eo 1 2 /
I t i s n o t a q u e s tio n o f d e te rm in in g w h e th e r o r n o t th e w h o le
i r r i g a t e d . f a r m o u g h t to be se e d e d to p a s t u r e »
R a th e r , th e problem i s
one o f d e c id in g w h at p r o p o r ti o n o f th e fa rm i n p a s tu r e w i l l y i e l d th e
g r e a t e s t incom e to th e farm a s a u n i t , i n t e g r a t i n g se e d e d p a s tu r e a s a
la n d u s e c o m p e tito r in to , th e p la n o f o p e r a tio n *
la n d and t h e incom e o f s u c c e e d in g c ro p s
B e n e f its a c c r u e to th e
i n d i r e c t l y , w h ich makes th e
c h o ic e o f c ro p s to p ro d u c e and t h e p la n o f r o t a t i o n depend upon f a c t o r s
o t h e r th a n n e t incom e fro m an y one c ro p i n an y one y ear*
The P ro b lem
z
The p u rp o se o f t h i s s tu d y i s t o d eterm in e , th e m ost p r o f i t a b l e p ro ­
p o r ti o n .o f p a s tu r e s and c a s h c ro p s i n an i r r i g a t e d fa rm o r g a n iz a tio n *
T h is i s t o b'e a c c o m p lish e d th ro u g h a n e m p ir ic a l stp d y o f t h e c o s t s and
r e t u r n s o f s e e d e d p a s t u r e s as e x p e r ie n c e d b y farm o p e r a to r s i n th e s u r ­
v e y a re a *
A c o m p lete b u d g e t w i l l be d raim u p , b a s e d upon a fa rm o r g a n i­
z a t i o n s y n th e s iz e d a s b e in g t y p i c a l f o r t h e a r e a o f s tu d y , w ith a l t e r ­
n a t i v e b u d g e ts s e t up t o d e te rm in e r e l a t i v e p r o f i t a b i l i t i e s o f th e
v a r io u s fa rm o r g a n iz a tio n s made up o f v a r y in g p r o p o r tio n s o f c r b p , p a s­
t u r e , and l i v e s t o c k e n t e r p r i s e s *
1 2 / O11B r ie n , op* c i t * ,, p* 86=
18
E n t e r p r i s e S e l e c t i o n an d C o m b in atio n
The econom ic p ro b lem s o f d e c id in g upon cro p e n t e r p r i s e s , cro p r o ­
t a t i o n s , and t h e l i v e s t o c k e n t e r p r i s e , a r e n o t o f s u c h a n a t u r e t h a t th e
f a rm e r c a n make h i s c h o ic e o f e n t e r p r i s e s and s e t them i n d i v i d u a l l y »
More o f t e n t h e y m u st be d e c id e d upon t o g e t h e r i n t h e p ro b lem o f in c r e a s in g
n e t farm, incom ee
The r e l a t i o n s h i p s o f one c ro p to a n o th e r , t h e p a s tu r e
e n t e r p r i s e t o t h e s e c r o p s , and th e l i v e s t o c k e n t e r p r i s e t o th e p a s tu r e
and c ro p e n t e r p r i s e s have a d i r e c t b e a r in g upon th e o r g a n iz a ti o n sy stem
t h a t w i l l be d e v e lo p e d .
How th e s e e n t e r p r i s e s a r e s e l e c t e d an d com bined
w i l l d i r e c t l y a f f e c t t h e farm in co m e, ■
C o m p e titiv e E n t e r p r is e s - =^A ccording t o th e th e o r y o f e n t e r p r i s e
s e l e c t i o n and c o m b in a tio n , c h o ic e o f e n t e r p r i s e s m u st r e s t upon th e r e ­
l a t i o n s h i p s e x i s t i n g betw een e n t e r p r i s e s a s w e ll a s t h e i r i n d i v id u a l
p ro fita b ilitie s ,
Some c ro p e n t e r p r i s e s a r e i n d i r e c t 'c o m p e titio n w ith
one a n o th e r f o r l a n d , t h e f a r m e r ’s l a b o r , u s e o f m a c h in e ry , and o th e r '
p ro d u c tiv e r e s o u r c e s .
These a r e c a l l e d " c o m p e titiv e " e n t e r p r i s e s .
W heat and b a r l e y , f o r i n s t a n c e , a r e co m p etin g e n t e r p r i s e s i n t h a t th e y
c a n n o t u s u a l l y b e grown on th e same la n d a t th e same ti m e .
The grow ing
o f one w i l l p ro b a b ly n o t e x h i b i t a b e n e f i c i a l e f f e c t upon th e y i e l d o f
th e o th e r.
They a l s o r e q u i r e s i m i l a r r e s o u r c e s and a t a b o u t t h e same
tim e o f th e y e a r .
I f , w i t h a g iv e n a c r e a g e b a r l e y i s t o be ex p an d ed ,
i t m ust b e done a t t h e ex p en se o f a c o r r e s p o n d in g r e d u c tio n i n w heat
a c r e a g e , 1 $ / When t h i s r e l a t i o n s h i p e x i s t s b etw een two o r more c r o p s ,
I j / H o p k in s, Jo h n A ,, E lem en ts o f Farm M anagem ent, P r e n t i c e - H a l l , I n c , ,
Hew Y ork, 191+7, p°” i+5o
——- "
19
t h e c h o ic e s h o u ld he t h e e n t e r p r i s e w i t h th e p ro m ise o f y i e l d i n g th e
'
g r e a t e s t n e t incom e t o th e fa rm as a whole® ll j./
T h is i s n o t a n a l l —o r—n o th in g c h o ic e f o r a p erm anent b a s i c c r o p ,
b u t a s h o r t = t e m p l a n , only®
(A fa rm e r c o u ld h a r d ly e x p e c t h i s manage­
m ent p roblem s t o become s t a t i c o v e r tim e w h ile o p e r a tin g w i t h i n a dy­
nam ic economyo)
The fa rm b u s in e s s can u s u a l l y be m ost p r o f i t a b l e , i n
t h e lo n g ru n , i f th e o r g a n i z a t i o n . i s k e p t f l e x i b l e enough t o ta k e ad v an ­
ta g e o f ch an g es i n th e r e l a t i v e p r i c e s o f c o m p e titiv e c ro p s
p r i c e s o f t h e s e c ro p s a r e s u b j e c t t o w id e f lu c tu a tio n s ®
when t h e
S i m i l a r l y , when
t h e r e l a t i v e p r i c e s o f t h e r e s o u r c e s u s e d i n p r o d u c tio n f l u c t u a t e , n e t
fa rm incom e may b e n e f i t i f t h e o p e r a t io n i s i n p o s i t i o n to ta k e ad v an ­
ta g e o f f a v o r a b l e p r i c e changes®
T here m u st be added th e r e s t r i c t i o n
t h a t th e fa rm e r t S p r i c e e x p e c ta tio n s m ust be a c c u r a te enough f o r him
t o choose th e c ro p w h ic h t u r n s o u t t o b e th e more p r o f i t a b l e to grow .
T here a r e , ho w ev er, c o n d itio n s w h ic h may .ten d t o c a u se s p e c i a l i z a t i o n
i n e i t h e r one o r a n o th e r e n te r p r is e ®
S in g le e n t e r p r i s e s p e c i a l i z a t i o n
may r e s u l t i n econom ies o f p r o d u c tio n n o t o b ta in a b le in a more f l e x i b l e
o rg a n iz a tio n .
I f r e l a t i v e p r i c e s ( f a c t o r an d p r o d u c t) a r e q u i t e s t a b l e ,
a h ig h e r n e t incom e may be o b ta in e d fro m t h i s ty p e o f o r g a n i z a t i o n .
When th e d e g re e o f s p e c i a l i z a t i o n i s re d u c e d , th e o p p o r tu n i ty t o g e t a
r e l a t i v e l y h ig h n e t incom e i n any one p r o d u c tio n p e r io d i s a l s o re d u c e d .
Changes in te c h n iq u e s may te n d t o r e n d e r a s p e c i a l i z e d o p e r a tio n l e s s
l k / Ib id ® , p® I4.60
20
p r o f i t a b l e i f i t i s in c a p a b le o f a d o p tin g new te c h n iq u e s b e c a u se o f r i g i ­
d i t y in th e ty p e o f o r g a n i z a t i o n .
d iffe re n t u ses.
Some m a c h in e ry i s a d a p ta b le to many
Where s i n g l e e n t e r p r i s e s r e q u ir e h ig h ly s p e c i a l i z e d
m a c h in e ry , tim e - o r u s e - d e p r e c i a t i o n i s n o t t h e o n ly e f f e c t i v e c o s t .
O b so le sc e n c e may a ls o make a p a r t i c u l a r ty p e o f s p e c i a l i z e d m ach in ery
u s e l e s s lo n g b e f o r e i t w ould n o rm a lly d e p r e c i a t e th ro u g h u s a g e .
E n t e r p r i s e s w h ich a r e c o m p e titiv e may s u b s t i t u t e f o r one a n o th e r i n
e i t h e r o f two g e n e r a l w ay s, ( l ) a t a c o n s ta n t m a rg in a l r a t e o f ( p r o d u c t)
s u b s t i t u t i o n , 1 5 / o r (2 ) a t a d im in is h in g m a rg in a l r a t e , 1 6 / I rJ /
When
th e c o n d itio n s f o r ( I ) h o ld , s u c c e s s iv e in c r e a s e s i n q u a n t i t y o f p ro d u c­
t i o n o f one cro p r e q u i r e a c o n s ta n t (c o r r e s p o n d in g ) d e c r e a s e in th e
o u tp u t o f a n o th e r c r o p .
T h is ty p e o f s u b s t i t u t i o n o c c u rs when th e r e i s
no c o n t r i b u t i o n made by one c ro p to w ard t h e p r o d u c tio n o f a n o th e r and
when b o th r e q u i r e t h e same r e s o u r c e s d u r in g th e same p e r io d .
Com plem entary E n t e r p r i s e s —A n o th e r ty p e o f r e l a t i o n s h i p may be
found t o e x i s t b etw ee n e n t e r p r i s e s when t h e r e i s some b e n e f i c i a l
1 5 / i f th e c ro p s X and Y s u b s t i t u t e f o r ea c h o t h e r a t a c o n s ta n t m a rg in a l
r a t e , a s i l l u s t r a t e d b y t h e s u b s t i t u t i o n l i n e AB, i t i s p o s s i b le f o r
t h e i r p r i c e r a t i o to f a l l on th e same l i n e , i n d i c a t i n g an
A
in d e te r m in a te s i t u a t i o n in w hich th e fa rm e r w ould n o t know
o
5 _________w hat to p ro d u ces y e t , fa rm e rs a r e a b le to d e te r m in e w hich
Crop X
c ro p to p ro d u c e .
1 6 / H eady, E , , and J e n s e n , H ,, The Econom ics o f Crop R o ta tio n s and Land
U se, A g r i c u l t u r a l E x p erim en t S ta t io n R e se a rc h B u l l e t i n 3 8 3 , Iowa
S t a t e C o lle g e , Ames, Iow a, A u g u st, 1951» PP« l|.51-2,
I ? / The M arg in al R ate o f S u b s t i t u t i o n i s th e change in c ro p Y w ith r e s ­
p e c t to a change i n cro p X (MRS Y / / \ X ).
21
c o n t r i b u t i o n made b y one e n t e r p r i s e to w a rd t h e added p r o d u c t i v i t y o f
a n o th e ro
T h is i s r e f e r r e d t o a s a !‘com plem entary’* r e l a t i o n s h i p , 1 8 /
Com plem entary c ro p s may com pete f o r r e s o u r c e s w ith i n an y ope cro p s e a s o n ,
b u t , by r o t a t i n g t h e i r p r o d u c tio n , th e c o m p le m e n ta rity becom es e f f e c t i v e
I
and a n in c r e a s e i n t h e o u tp u t o f b o th c ro p s can be e x p e c te d fro m a g iv e n
amount o f la n d an d o th e r r e s o u r c e s .
When two c ro p s a r e com plem entary,
a g r e a t e r p r o d u c tio n o f one o r b o th cro p s may be o b ta in e d th a n i f th e y had
b een grown in d e p e n d e n tly , 1 9 / The tim e sp a n i s o f some im p o rta n c e
re g a r d in g y i e l d s o f c r o p s .
T h is p e r io d o f tim e m ust be lo n g enough f o r
t h e f u l l e f f e c t s t o be f e l t i n h ig h e s t y i e l d s o b ta in a b le fro m a g iv e n
ro ta tio n ,
A t l e a s t one co m p lete r o t a t i o n o f a l l th e c ro p s w ould be th e
minimum l e n g t h o f th e p e r io d o f tim e r e q u ir e d f o r r e f l e c t i o n o f th e f u l l
com plem entary e f f e c t s ,
As a com plem ent t o v a r io u s ty p e s o f t i l l e d c r o p s , p a s tu r e s c o n t r i ­
b u te i n . s e v e r a l ways to w a rd i n c r e a s e d cro p p r o d u c tio n .
By a d d in g n i ­
tr o g e n t o t h e s o i l (one o f th e e le m e n ts f r e q u e n t l y l a c k i n g ) , f e r t i l i t y
and p r o d u c t i v i t y c a n be m a in ta in e d o r in c r e a s e d .
S o i l t i l t h and s t r u c ­
t u r e a r e im proved th r o u g h d e e p e r and more a b u n d a n t r o o t g ro w th o f th e
g r a s s e s and le g u m es.
The o r g a n ic c o n te n t i s a l s o b u i l t up when th e
p a s tu r e i s plow ed u n d e r .
O th e r c o n t r i b u t i o n s a r e i n t h e form o f w eed,
p e s t , d i s e a s e , and e r o s io n c o n t r o l t o t h e e x t e n t t h a t a l a r g e r p ro d u c t
1 8 / Heady and J e n s e n , o p , c i t , , p p , 1+30-1
1 9 / I b i d , , p , U31°
22
can b e o b ta in e d from a s m a lle r a c re a g e .. 2 0 /
S u p p le m e n ta ry E n t e r p r i s e s - —A d d itio n a l e n t e r p r i s e s may b e ad d ed to
a fa rm o p e r a tio n due t o a 18s u p p le m e n ta ry ” r e l a t i o n s h i p w h ich may e x i s t
betw een c e r t a i n e n t e r p r i s e s 0
These p a r t i c u l a r e n t e r p r i s e s may u t i l i z e
l a b o r g l a n d , o r eq u ip m en t when t h e r e i s l i t t l e
o th e r e n t e r p r i s e s =
o r no demand f o r them by
Most c r o p s 'h a v e p e r io d s o f peak demand f o r r e s o u r c e s
d u rin g a few m onths o f th e y e a r , le a v in g t h e s e r e s o u r c e s i d l e t h e r e ­
m a in d er o f t h e tim e=
I d l e r e s o u r c e s can o f t e n be p r o f i t a b l y u s e d by a
su p p le m e n ta l e n t e r p r is e =
Many c ro p s a l s o r e q u i r e d i f f e r e n t am ounts
o f t h e v a r io u s e le m e n ts , m aking i t p o s s i b le t o choose c ro p s w h ic h do
n o t com pete f o r p l a n t n u t r i e n t s .
The su p p le m e n ta ry r e l a t i o n s h i p o f a n e n t e r p r i s e c a n be c o n s id e r e d
t o e x i s t a s lo n g as t h e 'r e s o u r c e s u s e d i n i t s p ro d u c tio n hav e an
o p p o r tu n ity c o s t o f zero * 2 1 / w ith r e s p e c t t o o th e r m a jo r e n t e r p r i s e s on
a g iv e n fa rm .
When t h a t r e s t r i c t i o n i n c l a s s i f i c a t i o n i s m e t, o n ly
i d l e u n p r o d u c tiv e r e s o u r c e s w i l l b e u s e d f o r s u p p le m e n ta ry e n t e r p r i s e
p r o d u c tio n .
These e n t e r p r i s e s a r e o f l e s s im p o rta n c e th a n a r e com ple­
m e n ta ry e n t e r p r i s e s i n d e te r m in in g t h e fa rm o r g a n i z a t i o n and r o t a t i o n
o f c r o p s , b u t t h e i r c o n t r i b u ti o n t o n e t incom e may b e s i g n i f i c a n t .
T heory o f E n t e r p r i s e S e l e c t i o n and C o m bination— The l a r g e s t .
2 0 / F o r s t e r , G« W ,, Farm O r g a n iz a tio n and M anagement, P r e n t i c e - H a l l , In c.
Hew Y ork, r e v is e d e d i t i o n , 19l|.6, p , 58»
2 1 / The o p p o r tu n ity c o s t, f o r any r e s o u r c e u s e d in p r o d u c tio n i s t h e n e t
"
r e t u r n t h a t r e s o u r c e w ould g e t i n th e b e s t a l t e r n a t i v e u s e .
23
p o s s i b le n e t income f o r th e farm b u s in e s s can be assum ed a s t h e goal"
w h ich m ost o p e r a t o r s w i l l a tte m p t to a t t a i n , . W ith t h i s o b j e c t i v e in
m ind, th e pro b lem becom es one o f d e te r m in in g a p r o p o r tio n o f e n t e r p r i s e s
w h ich w i l l y i e l d a n e t income g r e a t e r th a n o th e r co m b in atio n s*
G u id in g p r i n c i p l e s f o r t h e s e l e c t i o n and co m b in a tio n o f e n t e r p r i s e s
depend upon t h e i r r e s p e c t i v e . c o m p e tit iv e , co m p lem en tary , o r s u p p le ­
m e n ta ry r e l a t i o n s h i p s 'a s d is c u s s e d a b o v e.
T h ree g e n e r a l r u l e s w i l l b e s t
s e t up th e b a s i s o f e n t e r p r i s e c h o ic e a s f o l l o w s s:
( I ) From among com­
p e tin g e n t e r p r i s e s s s e l e c t t h e c ro p o r l i v e s t o c k e n t e r p r i s e w hich p ro ­
m ise s t o y i e l d t h e l a r g e s t n e t income f o r th e u s e o f r e s o u r c e s |
(2 )
Combine w i t h t h e m ain e n t e r p r i s e th o s e com plem entary e n t e r p r i s e s w h ich
w i l l c o n t r i b u t e t o an i n c r e a s e i n th e n e t r e t u r n s o f t h e fa rm b u s in e s s ?
(3 ) Add s u p p le m e n ta ry e n t e r p r i s e s s m aking u se o f i d l e r e s o u r c e s , p ro ­
v id e d t h e a d d i t i o n o f th e s e e n t e r p r i s e s w i l l in c r e a s e n e t fa rm in co m e0 2 2 /
The C o m p etitiv e-C o m p lem en tary C ontinuum—A t h e o r e t i c a l model f o r
t h e s e l e c t i o n o f th e e n t e r p r i s e s ( g r a i n c ro p s and p a s t u r e ) w ith i n a
r o t a t i o n may s e rv e t o show th e ra n g e o f r e l a t i o n s h i p s b etw een th e s e
e n t e r p r i s e s an d t o g iv e some i n d i c a t i o n o f t h e p r o p o r tio n o f each cro p
to m a in ta in i n t h e c r o p p in g pro g ram .
T h ere i s an e m p ir ic a l problem o f
o b ta in in g d a t a w h ich w i l l r e f l e c t th e c o n d itio n s t h a t w ould be a n t ic ip a te d
fro m th e d ia g ra m .
The d a t a w ould have t o show re s p o n s e s i n y i e l d o f
g r a i n c ro p s t o a number o f g iv e n ch an g es i n th e p r o p o r tio n s o f cro p s
2 2 / H o p k in s, Jo h n A*, op , c i t , , p , b9<>
2h
and p a s t u r e s <> S in c e t h e r e a r e w ide d i f f e r e n c e s i n v a r io u s s o i l s ,
in d i v i d u a l fa rm e rs w ould s t i l l be f a c e d w ith th e problem o f p r o p o r tio n ­
in g e n t e r p r i s e s to f i t c o n d itio n s as th e y e x i s t on t h e i r own u n i t s .
E x p e rim e n ta l d a t a c o u ld , how ever, e s t a b l i s h a b a s is w h ic h fa rm e rs co u ld
u s e a s a g u id e i n d e te rm in in g c ro p s u b s t i t u t i o n r a t e s and r o t a t i o n s .
T o ta l O u tp u t o f P a s tu r e
P ig , Io
C o m p le m e n ta ry -c o m p e titiv e r o t a t i o n
r e l a t i o n s h i p s o f g r a i n c ro p s and
p a s tu re »
F ig u re I i s a n i l l u s t r a t i o n of t h e r e l a t i o n s h i p s l i k e l y t o be found
when g r a in c ro p s a r e grown in a r o t a t i o n . 2 $ /
As i n d i c a t e d i n th e
d ia g ra m , an in c r e a s e i n p a s tu r e p r o d u c tio n from O t o N w i l l a l s o r e s u l t
i n a n i n c r e a s e o f g r a in p r o d u c tio n from OG t o OH.
2 5 / Heady and J e n s e n , o p . c i t . , F ig . 7» P« U3k
The p e r c e n ta g e
i n c r e a s e i n g r a i n y i e l d m u st be g r e a t e r th a n th e p e r c e n ta g e d e c r e a s e in
g r a i n a c re a g e u p t o a maximum t o t a l o u tp u t o f g r a i n i n d i c a t e d b y th e
p o in t Ae
A d d itio n a l in c r e a s e s i n p a s tu r e a c r e a g e (and o u tp u t) beyond
ON w i l l r e s u l t - i n r e d u c tio n s i n t o t a l o u tp u t o f g r a i n , s i n c e 't h e com ple­
m e n ta r it y o f p a s tu r e s i s n o t g r e a t enough to. o f f s e t th e r e d u c t io n i n '
g ra in a cre ag eo
Beyond p o in t A, t h e p a s tu r e becomes a c o m p e titiv e
e n t e r p r i s e , s u b s t i t u t i n g f o r g r a i n a t a n e g a tiv e m a rg in a l r a t e .
W ith in
t h e ra n g e AS, b o th e n t e r p r i s e s s u b s t i t u t e a t a d im in is h in g m a rg in a l r a t e
A com plem en tary r e l a t i o n s h i p o f g r a i n t o p a s tu r e i s i n d i c a t e d by
PB i n t h e diagram ,,
Moving "u p " fro m P to w ard B w ould r e s u l t i n p ro d u c ­
t i o n in c r e a s e s i n b o th p a s tu r e and g r a in c r o p s o
The a s s u m p tio n m ust
r e s t upon c e r t a i n b e n e f i t s b e l ie v e d t o a c c ru e to p a s tu r e s fro m th e
p r o d u c tio n o f g r a i n i n a •r o t a t i o n ,.
Weeds and o th e r u n d e s ir a b l e p l a n t s ,
p e s t s , and d i s e a s e s o f p a s tu r e f o r a g e p l a n t s m ust be s u b j e c t t o some
amount o f c o n t r o l b y o c c a s io n a l t i l l a g e f o r o th e r c r o p s , r e s u l t i n g i n
h ig h e r p a s tu r e p r o d u c tio n , ' G ra in c ro p s w i l l a ls o com plem ent p a s tu r e
g ro w th b y f u r n i s h i n g p r o t e c t i o n a s a .n u rs e cro p d u rin g p a s tu r e e s ­
ta b lis h m e n t,
T here i s a l i m i t a t i o n to th e s e c ro ss-c o m p le m e n ta ry e f f e c t s
i n t h a t t h e d e g re e o f c o m p le m e n ta rity i s a f f e c t e d b y s o i l and c lim a tic
c o n d itio n s .
The h ig h e r th e f e r t i l i t y and p r o d u c tiv e a b i l i t y o f th e
s o i l , th e lo w e r , u s u a l l y , w i l l be t h e d e g r e e o f c o m p le m e n ta rity , 2 [ |/
D e te rm in in g t h e r e l a t i o n s h i p s o f p a s tu r e t o g r a in c ro p s i s n o t.
26
in i t s e l f , s u f f i c i e n t a s a s o l u t i o n to th e p ro b lem o f d e c id in g th e p ro ­
p o r ti o n s o f e n t e r p r i s e s .
A n o th e r f a c t o r becomes im p o r ta n t in d e te rm in in g
how much o f e a c h c ro p t o r a i s e — th e r a t i o o f p r i c e s o f th e s e two e n t e r ­
p r i s e s ( P p / P g) o
The h ig h e r t h e p r i c e o f p a s tu r e p ro d u c t r e l a t i v e t o
g r a i n p r i c e s , t h e g r e a t e r w i l l be th e a c r e a g e d e v o te d to p a s t u r e p ro ­
d u c tio n o
I f t h e p a s tu r e i s v a l u e l e s s a s a c ro p , p ro d u c tio n s h o u ld be
m a in ta in e d a t p o in t A w here th e g r a in c ro p o u tp u t i s g r e a t e s t , a s i n d i ­
c a t e d b y t h e l i n e HH i n F ig u re 2 ,
A t an y p r o d u c tio n o f l e s s th a n t h i s
p r o p o r ti o n (OH g r a in and ON p a s t u r e ) , income from th e g r a in c ro p i s n o t
th e h i g h e s t o b t a i n a b l e .
When b o th c ro p s have a v a l u e , t h e e c o n o m ic a lly
$3J 1" —
T o ta l O u tp u t o f P a s tu r e
F ig , 2«
R o ta tio n r e l a t i o n s h i p s o f g r a in cro p s
and p a s tu r e and p r i c e r a t i o s ,
r e l e v a n t ra n g e o f p r o d u c tio n w i l l b e somewhere b etw een th e p o i n t s A
and Be
E q u ilib r iu m i n p r o d u c tio n w i l l be e s t a b l i s h e d w here th e r a t i o
o f p r i c e s i s in v e r s e l y p r o p o r ti o n a l t o t h e i r r a t i o o f p ro d u c t s u b s t itu t io n
I
27
(? p /P g =
A
9 //^ ? ).
(riv en a n o r i g i n a l p r i c e . r a t i o i n d i c a t e d b y t h e l i n e BRe p ro d u c tio n
w i l l b e m a in ta in e d a t p o in t S w here th e l i n e o f p r i c e r a t i o s and th e
r a t i o o f m a rg in a l p r o d u c t s u b s t i t u t i o n a r e e q u a l ( l i n e RB ta n g e n t t o
lin e
G rP)o
The b ro k en l i n e Ri Ri i n d i c a t e s a - s h i f t i n th e p r i c e o f
p a s t u r e p ro d u c t in c r e a s e d i n r e l a t i o n t o th e g r a i n price<>
A new
e q u i lib r i u m o f p ro d u c tio n w ould be fou n d a t S qe th e p o in t o f ta n g e n c y ,
and th e p r o p o r tio n w ould th e n be OI g r a in and OM p a s tu re *
T h is s tu d y was n o t c o n c e iv e d o f a s one w h ich would y i e l d e m p ir ic a l
d a t a o f th e ra n g e o f in p u t - o u tp u t r e l a t i o n s h i p s b etw een p a s tu r e s and
cash c ro p s,
R a th e r e i t a tte m p ts t o d e te rm in e one p o in t w i t h i n th e ran g e
of re la tio n s h ip s ,
.
The ty p e o f a n a l y s i s p r e s e n te d i n t h i s s e c t i o n r e s t r i c t s t h e c h o ic e
o f e n t e r p r i s e s t o tw o 5 y e t , th e c h o ic e f a c i n g a farm o p e r a to r i s u s u a l l y
b etw ee n s e v e r a l a l t e r n a t i v e e n t e r p r i s e s .
The p ro b lem o f a p p o r tio n in g
e n t e r p r i s e s and r e s o u r c e s u s e d i n t h e i r p ro d u c tio n becomes m ore
d i f f i c u l t a s t h e num ber o f e n t e r p r i s e s i n th e fa rm o r g a n i s a t i o n i s i n ­
c re a se d .
The p r i n c i p l e o f e q u i-m a r g in a l r e t u r n s may be u s e d t o d e te rm in e w hich
e n t e r p r i s e s can m o st p r o f i t a b l y b e ex p an d ed .
A ll t h e e n t e r p r i s e s i n th e
fa rm o r g a n iz a tio n sh o u ld b e a d j u s t e d t o t h e p o in t w h e r e .t h e i r m a rg in a l
r e t u r n s a r e e q u a l and i d e a l l y a t z e r o ,
I t i s a t t h i s p o in t t h a t an
in c r e a s e i n p r o d u c tio n c o s t o f,a n , a d d i t i o n a l d o l l a r w i l l j u s t r e t u r n one
a d d i t i o n a l d o l l a r , and n e t fa rm incom e i s a t i t s h i g h e s t .
A v a ila b ility
28
o f l a b o r , m a c h in e ry , c a p i t a l , c r e d i t , and la n d may s e t l i m i t s t o w hich
e n t e r p r i s e e x p a n s io n may he u n d e rta k e n ^ l i m i t s w h ich may f o r c e t h e
o p e r a t o r to a p o s i t i o n s h o r t o f th e g o a l o f zero m a rg in a l r e v e n u e o
H ow ever, n e t farm incom e can he m axim ized, g iv e n l i m i t e d r e s o u r c e s ,
when t h e m a rg in a l r e t u r n s o f a l l t h e e n t e r p r i s e s a r e e q u a lo
29
PART H o.
METHODOLOGY
The B udget Method
Prom t h e p r e v io u s d i s c u s s i o n i t i s e v i d e n t t h a t t h e u s e o f
r e s o u r c e s i n p r o d u c tio n and th e o r g a n i z a t i o n o f a farm b u s in e s s p r e ­
s e n t s a com plex p ro b lem to t h e farm o p e r a to r *
T e c h n o lo g ic a l im prove­
m en ts may i n c r e a s e y i e l d s i n c e r t a i n e n t e r p r i s e s and g iv e th e m an ad­
v a n ta g e o v e r o t h e r s , r e q u i r i n g s h i f t s i n em phasis fro m e n t e r p r i s e s
w h ic h may have b een m ore p r o f i t a b l e *
R e la tiv e p r i c e f l u c t u a t i o n s may
a l s o make v a r io u s e n t e r p r i s e s more ( o r l e s s ) p r o f i t a b l e th a n fo rm erly -,
c a u s in g s h i f t s i n p r o d u c tio n t o com pensate f o r t h e p r ic e changes*
Ad­
ju s tm e n ts w h ich a l t e r t h e p r o p o r tio n s o r change e n t e r p r i s e s a l t o g e t h e r
can be made w ith l e s s p ro b a b le r i s k o f l o s s i f b a se d upon a d e f i n i t e
p la n o f o p e ra tio n *
The B udget D escribed-=—A fa rm b u d g e t i s a m ethod o f p la n n in g th e
fa rm b u s i n e s s , a p p o r tio n in g t h e v a r io u s e n t e r p r i s e s and r e s o u r c e s u sed
i n p r o d u c tio n *•
The fa rm b u d g e t h as t h e same r e l a t i o n s h i p t o p la n n in g a
fa rm t h a t a b l u e p r i n t h a s to b u i l d i n g c o n s t r u c t i o n *
I t i s a p la n w h ere- .
by e n t e r p r i s e s may b e " t r i e d o u t" on p a p e r o r a n t i c i p a t e d ch an g es may b e
ch eck ed one a g a i n s t t h e o t h e r b e f o r e i n c o r p o r a tin g them i n t o t h e o p e r a tio n .
A d d itio n a l r e c o r d s o f p a s t p e rfo rm a n c e s o f t h e v a r io u s e n t e r p r i s e s may b e .
q u i t e h e l p f u l when u se d f o r t h e p u rp o se o f g u id in g f u t u r e o p e r a t i o n s ,
a c c o r d in g to th e s p e c i a l c irc u m s ta n c e s o f t h e i n d i v i d u a l fa rm u n it*
The p r i n c i p a l p a r t s of. th e co m p lete fa rm b u d g e t ares:
( l ) The cro p ­
p in g p la n — c o n s i s t i n g o f th e c ro p s t o be grown and t h e i r r o t a t i o n .
30
s e t t i n g up th e p r o p o r tio n s o f e a c h to b e c o n ta in e d in th e fa rm sy stem s (2 )
The l i v e s t o c k p la n —=s e t t i n g up th e ty p e ( o r ty p e s ) o f l i v e s t o d k to be
h a n d le d , t h e i r n u m b e rs, and t h e c ro p s to b e grown f o r t h e l i v e s t o c k
e n te rp ris e s
(3 ) D ir e c t e x p en ses-= -th o se d i r e c t l y a t t r i b u t a b l e to th e
- p r o d u c tio n o f t h e v a r io u s e n t e r p r i s e s and a s s ig n a b le a s e x p e n s e s t o e a c h j
(I+) The b u d g e t summary-=-which sum m arizes e x p e c te d y i e l d s and. e x p e n d itu r e s
f o r th e p u rp o se o f e s ti m a t in g r e t u r n s and in c lu d in g a l l o t h e r ex p en ses
f i x e d to t h e farm b u s i n e s s , su ch as t a x e s , r e n t , d e p r e c i a t i o n , i n t e r e s t ,
u pkeep o f b u i l d i n g s and im p ro v em en ts, and in s u r a n c e » 2 5 /
V a r i a t i o n s o f th e c o m p le te b u d g e t m ethod may be u se d t o re d u c e th e
am ount o f tim e s p e n t i n p la n n in g and t h e p r o b a b i l i t y o f e rro r®
These
m e th o d s, f o r t h e m ost ,p a r t , a r e d e r i v a t i o n s o f t h e b u d g e t method®
One,
t h e m ethod o f s u b s t i t u t i o n , c o m p le te ly o r p a r t i a l l y s u b s t i t u t e s enter-?
p r i s e s w i t h a d i f f e r e n t co m b in a tio n o f e n te r p r is e s ®
O nly th o s e d i r e c t
c o s t s and r e t u r n s a t t r i b u t a b l e t o th e e n t e r p r i s e i n q u e s ti o n a r e con­
sid ered ®
The e f f e c t s o f t h e change u p o n n e t incom e a r e th e n n o te d and
t h e l i n e s o f p r o d u c tio n e s t a b l i s h e d a c c o rd in g ly ®
A n o th e r m ethod f o r
p la n n in g t h e o p e r a t io n i s th e s ta n d a r d c o m b in a tio n o f farm e n te r p r is e s ®
S tu d ie s can b e made o f v a r io u s fa rm s i n o p e r a t io n t o d e te rm in e w hich
a p p e a rs t o be t h e m ost p r o f i t a b l e c o m b in a tio n o f e n te r p r is e s ®
U sing
t h i s s e t - u p a s a b e g in n in g o r g a n i z a t i o n , th e fa rm e r can make f u r t h e r
o f Farm O r g a n iz a tio n and M anagement, D® 0®■ H eath and Co®, Uew
Y ork, 1928, pp®
51
a d ju s tm e n ts a c c o r d in g to c o n d itio n s he may f i n d i n h i s p a r t i c u l a r
o p eratio n ®
A t h i r d i s t h e m ethod o f d i r e c t c o m p a ris o n .
C r i t e r i a f o r th e o rg an i­
s a t i o n o f a farm u n d e r t h i s m ethod a r e b a s e d upon th e e x p e r ie n c e s o f a
l a r g e num ber o f fa rm e rs i n , t h e same a r e a .
The b e l i e f i s h e ld b y some,
t h a t e x p e r ie n c e s o f s u c c e s s f u l fa rm e rs a r e more r e l i a b l e th a n o th e r
m e th o d s,
Howevers t h i s m ethod w ould seem t o be o f v a lu e o n ly t o a b e g in ­
n in g fa rm e r o r one w hose incom e was b elow t h a t o f o t h e r fa rm e rs p ro d u c in g
s i m i l a r c r o p s s e n a b lin g him t o i n c r e a s e h i s incom e, t o th e a v e ra g e u s e d .
T h is d o e s make f o r c o n s e rv a tiv e farm ings, w h e th e r t h a t i s t o be d e s ir e d
or n o t , by w a it in g f o r th e o t h e r f e llo w t o make th e "jum p" t o n e w 'e n te r ­
p r i s e s o r d i f f e r e n t c o m b in a tio n s f i r s t *
D ata R e q u ire d — " A n a ly s is " o f a fa rm b u s in e s s im p lie s a s tu d y o f th e
■o r g a n iz a ti o n b y a breakdow n o f t h e w hole i n t o i t s
component p a r t s .
Know­
le d g e o f w h at t h e s e p a r t s a r e i s im p o r ta n t i n s e t t i n g up t h e budget*
The b u d g e t i t s e l f i s a " s y n t h e s i s " o f th e v a r io u s p a r t s o f th e farm
b u s i n e s s , g ro u p in g t h e s e com ponents i n t o a n o r g a n i z a t i o n f o r th e p u r­
p o se o f o b s e rv in g v a r i a t i o n s i n th e n e t farm- incom e r e s u l t i n g fro m
o r g a n i z a t i o n a l changes.®
C e r ta in b a s i c d a t a a r e r e q u i r e d fro m w h ich to c o n s t r u c t t h e farm
b u d g e t,
I f t h e s e d a t a a r e u n r e l i a b l e o r i n a c c u r a t e , th e b u d g e t w i l l
n o t b e a v e r y s a f e p la n b y w hich t o o r g a n iz e th e farm b u sin ess®
For
t h e c ro p p in g p l a n , in p u t - o u t p u t r e l a t i o n s h i p s f o r ea c h o f t h e ' e n t e r p r i s e s
s h o u ld b e known a s a c c u r a t e l y a s p o s s i b l e .
U s u a lly , fa rm e rs can o b ta in
C
52
.
in f o r m a tio n fro m n e a r b y farm s o r fro m p u b l i c ag en cy su rv e y s and r e c o r d s
a b o u t q u a n t i t i e s o f s e e d , l a b o r , power and m a c h in e ry , and o th e r e x p e n d i­
t u r e s r e q u ir e d b y d i f f e r e n t c r o p s , u s u a l l y a t some a v e ra g e l e v e l o f
o u tp u t f o r eac h c r o p .
In fo rm a tio n c o n c e rn in g norm al y i e l d s f o r each o f
th e e n t e r p r i s e s can be o b ta in e d i n much th e same m anner a s t h e in p u t
" re q u ire m e n ts O5e
The o p e r a t o r m ust a l s o f i n d a d e q u a te p r i c e d a t a f o r t h e c ro p s to be
grow n.
Most p u b li c
a v a ila b le ®
and many p r i v a t e a g e n c ie s have t h i s in f o r m a tio n '
From t h i s , e s ti m a t e s may be made a s c o n s e r v a t i v e l y ' o r l i b e r ­
a l l y a s a p p e a rs w arran ted ®
T h is m ust b e done w ith c a r e , however®
k
w rong g u e s s o f t h e r e l a t i v e p r i c e s o f t h e c ro p s can b e j u s t a s d i s a s t r o u s
a s poor e s ti m a t e s i n p ro d u c tio n o r a p p o r tio n in g o f th e e n te r p r is e s ®
V a r i a t i o n s i n e s tim a te s o f t h e p r i c e l e v e l w i l l have l e s s e f f e c t upon
t h e r e l a t i v e p r o f i t a b i l i t i e s o f th e a l t e r n a t i v e o r g a n iz a ti o n s b e in g con­
sidered®
M ost of- t h e in f o r m a tio n o b ta in e d w i l l be i n th e fo rm o f .
a v e r a g e s , a g a i n s t w h ich t h e in d i v i d u a l o p e r a t o r m ust e v a l u a t e th e compp a r a t i v e p r o d u c t i v i t y o f h i s la n d and o t h e r r e s o u r c e s to b e u s e d by t h e
v a r io u s e n t e r p r i s e s , d e te r m in in g how and i n w h at way th e y may d e v i a t e '
fro m th e a v e r a g e s and p la n t h e .crop p ro d u c tio n - a c c o r d in g ly .
• S im i la r s o u rc e s have a v a i l a b l e in f o r m a tio n r e q u ir e d t o p r o p e r ly
s e t up th e l i v e s t o c k e n te rp ris e ®
L iv e s to c k f e e d and g r a z in g re q u ire m e n ts
m ust b e c o n s id e r e d a t th e same tim e t h e c r o p p in g sy stem i s planned®
A pproxim ate d a i l y re q u ire m e n ts o f l i v e s t o c k may be u s e d to e s ti m a t e th e
c ro p s t o be grown i n s u p p o r t o f t h e l i v e s t o c k in th e o rg a n iz a tio n ®
33
The am ounts o f d i r e c t e x p e n d itu r e s f o r eac h o f th e e n t e r p r i s e s p lan n ed
i
a t d i f f e r e n t l e v e l s o f p ro d u c tio n and th e i n d i r e c t e x p e n se s o f th e p r o ­
d u c t io n sy ste m i n g e n e r a l m ust h e known w ith c o n s id e r a b le a c c u ra c y i n
o r d e r t o p r o p e r l y a s s e s s t h e in c o m e -p ro d u c in g a b i l i t y o f t h e fa rm o r g a n i­
zation®
The e x p e n se s in c u r r e d a r e i n d o l l a r te rm s a s v a l u e s o f th b
p h y s ic a l i n p u t s u s e d i n t h e p r o d u c tio n process®
As u s e d i n t h e b u d g e t,
t h e s e a r e in p u t - o u t p u t r e l a t i o n s h i p s ( i n d o l l a r t e r m s ) , b p t o n ly a t
one p o in t o f th e w hole a r r a jr o f p o s s i b le in p u t s (e x p e n s e s ) and outputs®
A ls o , t h e c o m p u ta tio n s a r e i n te rm s o f a v e ra g e s ( n o t f u n c t i o n s ) i n
p ro d u ctio n ®
■ R e la tio n t o T h eo ry o f E n t e r p r i s e S e le c tio n and C o m b in atio n — T here
s h o u ld be no im p o r ta n t i n c o n s i s t e n c i e s b etw een th e th e o r y o f e n t e r p r i s e
s e l e c t i o n and t h e b u d g e t method®
R a th e r , t h e d i r e c t i o n o f p ro d u c tio n
a d ju s tm e n ts b a s e d upon e i t h e r m ethod s h o u ld p a r a l l e l one another®
The
l o g i c a l c h a in o f t h e o r e t i c a l th i n k in g s h o u ld le a d one t o much th e same
I ■
'
answ er a s t h a t o b ta in e d by d ev elo p m en t w ith th e b u d g e t method®
The p r o d u c t s u b s t i t u t i o n - a n a l y s i s o f e n t e r p r i s e r e l a t i o n s h i p s d o es
"have a b a s i s i n e m p ir ic a l fact®
S tu d ie s i n I l l i n o i s , O h io , and Iowa 2 6 /
g iv e r e s u l t s w h ich b e a r o u t th e r e l a t i o n s h i p s t o b e e x p e c te d fro m th e
t h e o r e t i c a l model ( F ig u r e 2 ) ,
T h is r e l a t i o n s h i p betw een e n t e r p r i s e s may
b e c a r r i e d d i r e c t l y i n t o t h e farm b u d g e t, p o in t in g th e d i r e c t i o n one
m u st go i n o rg a n iz in g t h e farm®
E m p ir ic a l f in d i n g s o f t h e s u b s t i t u t i o n
2 6 / Heady and J e n s e n , op® c it® , p p . l|.56-l|l|.lo
- 3k
r a t e s o f p a s tu r e and g r a in c ro p s f o r th e a r e a o f t h i s s tu d y w ould g iv e
a m ore d e f i n i t e g u id e b y w h ich t o d e v e lo p th e fa rm budget=
T h is w ould
g iv e a more a c c u r a te s t e p p i n g - o f f p o in t fro m w hich t o t e s t a l t e r n a t i v e
b u d g e ts »
Many s t u d i e s o f f a c t o r s a f f e c t i n g fa rm incom es show t h a t l a r g e r incomes
o c c u r w ith th e l a r g e r f a r m s , 2 j /
From t h i s , one m ight c o n c lu d e t h a t a
f a rm e r o u g h t t o i n c r e a s e t h e s i z e ( a c r e s ) o f h i s fa rm in o r d e r t o i n ­
c r e a s e h i s in c o m e.
T his s o r t o f d e d u c tio n does n o t c o n s id e r o th e r
f a c t o r s w h ich may a c t u a l l y b e th e o n es c a u s in g t h e d i f f e r e n c e s in .in c o m e s .
M anagers w ith more a b i l i t y may have b e e n , i n g e n e r a l , th e o nes o p e r a tin g
.
t h e l a r g e r f a r m s , te n d in g t o d is c o u n t t h e s i z e f a c t o r i n e x p la in in g
t h e incom e d i f f e r e n c e s ,
An i n c r e a s e i n t h e s i z e o f t h e farm b u s in e s s
may be o b ta in e d w ith o u t a g e o g ra p h ic e x p a n s io n ,
A more i n t e n s i v e u s e
o f a g iv e n num ber o f a c r e s w ould amount t o an in c r e a s e in- s i z e .
S tu d ie s
i n d i c a t i n g fa rm s i z e s h o u ld be expanded in o r d e r t o in c r e a s e farm income
s h o u ld n o t .n e g l e c t t h e p o s s i b i l i t y o f i n t e n s i f y i n g o p e r a tio n s *
A
b u d g e t summary w o u ld ■i n d i c a t e w h e th e r o r n o t i n t e n s i f y i n g p r o d u c tio n
w ould be more s u c c e s s f u l i n i n c r e a s i n g th e n e t farm in co m e.
The t h e o r e t i c a l m odel ( F ig u r e 2 ) h as t h r e e m ajor b a s ic , assu m p tio n s
w h ich m u st b e - ta k e n i n t o c o n s id e r a tio n i n a n a ly z in g r a t e s o f p ro d u c t
s u b s titu tio n .
One a ssu m p tio n i s t h a t t h e r e i s a f ix e d am ount o f reso u rces
2 7 / E» g , , B la c k , J , D ,, e t a l , Farm M anagem ent, The M acm illan Co*, Mew
Y o rk , 1914.7» T ab le 58» p , !4.96» and B o ss, A . , and F o n d , G ,, Modern
Farm M anagem ent, The Webb P u b lis h in g C o ,, S t , ;P a u l, M in n ,, I9I4.7V
T a b le s XXXF and XXXVI, p p , 2l|l|.-5»
35
a v a i l a b l e f o r d i v e r s i o n among a l t e r n a t i v e l i n e s o f p r o d u c tio n .
The
c u rv e d l i n e i n d i c a t i n g th e p r o d u c t s u b s t i t u t i o n r a t e s i s th e maximum
o p p o r tu n i ty f u n c ti o n o f th e t o t a l p r o d u c t o b t a i n a b l e , g iv e n th e s e
r e s o u r c e s f ix e d i n q u a n t i t y .
A n o th e r a ssu m p tio n w hich m ust be made i s
t h a t o f a tim e sp an o v e r w h ich th e , p r o d u c tio n i n q u e s tio n o c c u r s , ' When
a lo n g -ru n p e r io d i s assum ed, a l l r e s o u r c e s a r e f r e e l y t r a n s f e r a b l e
fro m one e n t e r p r i s e to a n o t h e r .
I f th e t h e o r e t i c a l model i s re g a rd e d
a s a p p ly in g to a s h o r t - r u n p e r io d , th e t r a n s f o r m a tio n c u rv e , once th e
r e s o u r c e s have b e e n com m itted i n p r o d u c tio n , w ould i n d i c a t e r a t e s of
s u b s t i t u t i o n d i f f e r e n t from w h at w ould o c c u r i n a lo n g - r u n a n a l y s i s .
The s h o r t - r u n s u b s t i t u t i o n r a t e s w ould have t o in c lu d e th e a d d i t i o n a l
c o s t s o f more r a p id " w r i t e - o f f " in d e p r e c i a t i n g eq u ip m en t w h ich co u ld
n o t be u s e d e q u a l ly w e ll i n th e p ro d u c tio n o f th e a l t e r n a t i v e e n t e r ­
p ris e s .
A t h i r d a ssu m p tio n o f th e p ro d u c t s u b s t i t u t i o n d ia g ra m i s th e
l i m i t a t i o n o f t h e c o n s id e r a tio n t o two a l t e r n a t i v e p r o d u c ts , one r e ; r ' ' ■
p r e s e n te d b y th e Y a x i s and th e o t h e r b y t h e X a x is w ith t h e t o t a l p ro ­
d u c t i n d i c a t e d b y th e t r a n s f o r m a tio n c u r v e .
The d iag ram may be assumed
t o in c lu d e com plex v a r i a b l e s r a t h e r th a n tw o s in g le v a r i a b l e s , m aking
th e a n a l y s i s much more co m p reh en siv e b u t a l s o m ore d i f f i c u l t t o i n t e r ­
p r e t w ith any d e g re e o f a c c u r a c y .
F or i n s t a n c e , th e g r a in v a r i a b l e may
b e assum ed t o in c lu d e a l l c a s h c ro p s grown i n th e a r e a o f s tu d y (w h eat,
o a t s , b a r l e y , c o m , and e t c . ) w ith t h e o t h e r v a r i a b l e in c lu d in g c ro p s
w h ic h c o u ld be c l a s s i f i e d a s f o r a g e s (g re e n manure c r o p s , a l l h a y , and
36
p a s tu re )e
U nder t h i s a s s u m p tio n , c o m p le m e n ta rity o f e n t e r p r i s e s would
b e much more d i f f i c u l t t o p o i n t o u t w ith e x a c tn e s s o
A model b a s e d upon th e p r o d u c t . s u b s t i t u t i o n r a t e s may b e u se d t o
a d v a n ta g e in com plem enting t h e b u d g e t m ethod by i n d i c a t i n g th e g e n e r a l
ty p e o f o r g a n iz a ti o n .f r o m w h ich t o d e v e lo p a l t e r n a t i v e b u d g e ts »
It
w ould a l s o be o f v a lu e i n c h e c k in g t h e a c c u r a c y o f th e b u d g e t, p ro v id e d
t h e b a s i c a s s u m p tio n s o f th e two m ethods a r e th e sam e.
I n a c c u r a c ie s
o f e s ti m a t e s w ould show up in q u i t e w id e d i f f e r e n c e s i n th e o r g a n iz a ­
t i o n a l sy ste m i n d i c a t e d b y th e two m e th o d s, showing a n e e d f o r re c h e c k in g
•
•
^
t h e in f o r m a tio n u s e d ,
T able I I may b e u se d t o i l l u s t r a t e an a p p a r e n t p a r a l l e l o f o r g a n i­
z a t i o n a l sy stem s when u s in g b o th an a n a l y s i s o f th e r a t e s o f s u b s t i t u ­
t i o n betw een g r a in and hay and a b u d g e t summary o f t h e c o s ts and r e tu r n s
o f v a r io u s r o t a t i o n s ,
A n a ly s is , u s in g t h e b a s ic d a t a f o r th e t h e o r e t i ­
c a l model and b a s e d upon I9J4.O-I1I1. p r ic e s * w ould i n d i c a t e e q u i lib r i u m in
p ro d u c tio n a t a p ro d u c t, s u b s t i t u t i o n r a t e o f 2»5» th e pounds o f hay
g a in e d f o r ea c h pound o f g r a i n s a c r i f i c e d .
The s u b s t i t u t i o n r a t e i s a r r i v e d a t b y f i r s t c a l c u l a t i n g th e
w e ig h te d a v e ra g e p r i c e o f c o m and w h e a t, s in c e t h e s e c ro p s a r e con­
s id e r e d t o g e t h e r a s th e g r a in v a r i a b l e , ■ The a v e ra g e p r i c e o f c o r n d u rin g
l^lt-O-W-l- was $0o82l|. p e r b u s h e l and t h e a v e ra g e p r i c e o f w h eat d u r in g th e
same p e r io d was $ 1 .1 1 p e r b u s h e l .
D iv id in g th e p r i c e p e r b u s h e l o f ea c h
c ro p b y i t s w e ig h t p e r b u s h e l g iv e s a v a lu e o f I «1)2 c e n ts p e r pound o f
c o m and 1 .8 5 c e n ts p e r pound o f w h e a t.
In th e e x p e rim e n t, th e G-C-W-ArA
37
r o t a t i o n , on 100 a c r e s o f la n d , p ro d u ced a p p ro x im a te ly 1 5 8 ,0 0 0 pounds of
c o rn and $ 2 ,0 0 0 pounds o f w h e a t.
p r o d u c tio n r a t i o .
T his i s ro u g h ly a 5 :1 co rn t o w heat
The p r i c e o f th e g r a i n v a r i a b l e m ust make allo w an ce
f o r t h e d i f f e r e n t am ounts o f th e tw o c r o p s , s in c e th e p r i c e s a r e n o t th e
same f o r b o th c r o p s .
T h is i s done b y m u ltip ly in g t h e c o r n p r ic e o f 1.1)2
c e n ts b y 5» a d d in g t h a t am ount t o th e p r i c e p e r pound o f w h e a t, and
d iv i d in g th e t o t a l q u a n t i t y by 6 to o b t a i n a w e ig h te d p r ic e f o r th e
g r a i n v a r i a b l e ( 1 .4 8 7 c e n ts p e r p o u n d ).
D iv id in g t h i s q u a n t i t y by .581).
c e n t s , t h e p r i c e p er pound o f h a y , g iv e s th e s u b s t i t u t i o n r a t e o f 2.5«
T h is i n d i c a t e s a r o t a t i o n d i f f e r e n t from e i t h e r th e C-C-W-A-A o r t h e
C-W-A-A w ould b e more p r o f i t a b l e , p r o b a b ly one h av in g ( s a y ) a r a t i o of
1 .2 5 y e a r s o f g r a i n t o one y e a r o f hay ( C -C -C-W-W-A-A-A-A) .
T ab le I I .
C ropping
System (b)
C
C" C“ C-W-A
C-W-A
C-C-W-A-A
C-W-A-A
P r o d u c tio n , C o s ts , and R e tu rn s (100 a c r e s ) W ith D i f f e r e n t
G ra in and Hay R o ta tio n s (W o o s te r, O h io , 1937-U 3)« A verage
o f C o sts and P r i c e s f o r 19UQ-UU° (a.)_____________ ___ ________
R a tio ,
Y ears o f
T o ta l Net
R ate o f
g r a in t o
In ­
G ross
C o sts
S u b s ti­
Hay
G ra in
one y e a r
come
Income
(c )
tu tio n
o f hay
IsO
$3209
2 1 7 ,8 4 0
$1307 $1902
1
2
8
,0
0
0
Comple4196
274L
2
2
9
,7
7
6
1455
4 :1
m eitary
2 0 3 ,2 0 0
5 .2
3023
2 1 5 ,4 8 0
1552
2 :1
4584
1586
4®6
4682
3096
3 1 6 ,0 0 0
1 9 0 ,6 7 2
1 .5 :1
363,000
4646
1652
1 6 5 ,9 2 8
2994
Isl
1 .9
( a ) S o u rc e s H eady, E . , and J e n s e n , H ., o p . o i t . , pp. 4 3 8 - 9 , T able 5 ,
p . JiJiB1 and T ab le 7 , p . 4 5 6 . G ro ss Incom es, T o ta l C o s ts , and Met In ­
comes a r e t h i s a u t h o r ’s c o m p u ta tio n s , b a se d upon y i e l d , c o s t , and
p r i c e d a t a g iv e n i n T a b le s I , 2 , and 7 , PP• 4 3 8 , J4I4O, and 4 5 6 ,
re s p e c tiv e ly .
(b ) C s C o m ,
W s W heat,
A * A lfa lfa
( c ) C o sts in c lu d e d w ere o v erh ea d and o p e r a t in g t r a c t o r c o s t s , f ix e d
m a ch in ery c o s t s , s e e d c o s t s , b u i l d i n g c o s t s , r e a l e s t a t e t a x e s ,
o p e r a t o r la b o r c o s t s , and th o s e c o s ts such a s h a n d lin g and h a u l­
in g t h a t v a r y w ith o u t p u t .
38
A b u d g e t summary o f th e g ro s s income* t o t a l c o s ts * and n e t income
f o r eac h r o t a t i o n shows t h e G-C-W-A-A r o t a t i o n i s th e m o st p r o f i t a b l e ,
y i e l d i n g $5096 on t h e 100 a c r e s 6 2 8 /
As t h e c o m p u ta tio n s stan d * i t can­
n o t b e p o in te d o u t t h a t t h e O-C-W-A-A r o t a t i o n i s d e f i n i t e l y th e p o in t
o f h i g h e s t n e t r e tu r n s ..
G r e a te r p r o f i t s may be o b ta in e d w ith a r o - '
t a t i o n h a v in g a h ig h e r ( o r lo w e r) r a t i o o f y e a r s o f g r a in t o y e a r s o f
a lfa lfa o
A d d itio n a l v e r i f i c a t i o n can be made b y u s in g th e m a rg in a l c o n ce p t
i n T ab le ! H o
The ch an g es i n g ro s s income and t o t a l c o s t s o c c u r r in g
w ith p r o d u c tio n s h i f t s a r e i n d i c a t e d i n t h e colum ns h ead ed /\^ G I an d .
/ \ TC* re s p e c tiv e ly o
D iv id in g th e ch an g es i n g r o s s incom e b y th e
ch an g es in ' t o t a l c o s t s th e n g iv e s f i g u r e s show ing th e a d d i t i o n a l d o l l a r
r e t u r n s f o r e a c h a d d i t i o n a l d o l l a r o f e x p e n d itu r e i n eac h o f th e r o t a ­
t i o n s o E q u ilib r iu m i n p r o d u c tio n i s a t t a i n e d w here in c r e m e n ta l d o l l a r
r e t u r n s a r e j u s t e q u a l t o in c re m e n ta l d o l l a r e x p e n d itu re s #
T h is i s
somewhere w ith i n t h e ra n g e b etw een t h e C-C-W-A-A r o t a t i o n w ith a 5 °2
g r a in /h a y r a t i o an d th e C=W-A-A r o t a t i o n h a v in g a I s l g r a in / h a y r a t i o #
2 8 / T here i s a d is c r e p a n c y betw een t h e s e c o m p u ta tio n s -a n d th e incom e and
™™ c o s t f i g u r e s p r e s e n te d b y Heady and J e n s e n i n T able $* p» I4I4.8 o f t h e i r
p u b lic a tio n # U sin g t h e c o s t* p r ic e * and p ro d u c tio n d a t a g iv en i n
T ab le I* p . U58* T able 2* p# IiJ-12* -and T able 7» P= U56* g r o s s income
f o r t h e C-C-W-A-A r o t a t i o n i s $1).681 #66* t o t a l c o s ts a r e $1585«60* and
n e t incom e i s $50$6o06# The e s ti m a t e s p r e s e n te d i n T ab le 5 , P= I|l|8
a r e s g ro s s incom e - $55UO» t o t a l c o s ts - $2125* and n e t income $5217 f o r th e same r o t a t i o n and a t th e same p r i c e l e v e l ( l^ O -ljl+
p r i c e s ) . I t i s n o t known w h at a s s u m p tio n s w ere u s e d i n b u d g e tin g
th e incom es and c o s t s o f th e v a r io u s r o t a t i o n s #
I f th e a ssu m p tio n
w ere one o f a s h o r t - r u n tim e p erio d * t h e c o s ts w ould b e h ig h e r* b u t
t h i s does n o t a c c o u n t f o r t h e h ig h e r g r o s s income#
39
G ross
Income
T o ta l
C o sts
N et
Income
A
g
1
0
R ate o f
s u b s ti­
tu tio n
(a )
►3
R o ta tio n
C o st and Income R e la tio n s h ip s (fro m T able T l ) .
t>
T ab le I I I .
A s i
A Tc
3
$3209
$1307
$1902
Comple­
m e n ta ry
1+196
11+55
271+1
$987
$H+8
$6.67
C-W-A
5.2
1+581+
1552
3032
388
97
1+. 00
C-C-W-A-A
U06
1+682
1586
3096
98
31+
2 .8 8
C-W-A-A
1.9
1+61+6
1652
2991+
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66
- 0 .5 5
C-C-G-W-A
( a ) I n f o r m a tio n ta k e n fro m Heady and J e n s e n , o p . o i t . , T a b le s I , 2 , and
7 , p p . I4.38, 14+2» and !4.56.
U nder c o n d i tio n s e x p e r ie n c e d on i n d i v id u a l f a rm s , i t may n o t be
p o s s ib le t o a d j u s t to t h e optimum b a la n c e .
I t may be t h a t a r o t a t i o n
c o u ld n o t b e o r g a n iz e d to y i e l d th e r a t i o o f p ro d u c ts r e q u ir e d w ith o u t
becom ing to o cumbersome and i n f l e x i b l e .
F o r exam p le, a tw e n ty -y e a r
r o t a t i o n would r e q u i r e a t l e a s t one c o m p lete r o t a t i o n f o r th e f u l l
e f f e c t s o f t h e co m plem entary b e n e f i t s on ea c h f i e l d t o b e e x h i b ite d i n
th e y i e l d s r e q u i r e d f o r e q u i lib r i u m .
P r ic e and w e a th e r u n c e r t a i n t i e s
may n o t a llo w th e f a r m e r t o p la n su ch a lo n g r o t a t i o n , f o r c i n g him t o
make p r o d u c tio n p la n s o f a s h o r t e r d u r a t i o n .
A d ju stm e n ts r e q u i r i n g s i g n i ­
f i c a n t r e d u c tio n s i n p a s tu r e a c re a g e may n o t alw ays be f r e e l y made, due
t o t h e r e l a t i v e i n f l e x i b i l i t y o f th e p a s tu r e e n t e r p r i s e .
E s ta b lis h m e n t
c o s t s f o r p a s tu r e s a r e q u i t e h ig h com pared w ith o th e r cro p s, and a l l o ­
c a t i o n o f t h i s c o s t o v e r s e v e r a l y e a r s may b e d e s i r a b l e .
G iven changes
in r e l a t i v e p r i c e s and c o n se q u e n t e n t e r p r i s e s h i f t s , th e b u d g e t method
lj.0
m u st r e f l e c t th e d i f f e r e n t a n n u a l c o s ts r e s u l t i n g from o r g a n iz a ti o n a l .
changes«
I f th e l i v e s t o c k e n t e r p r i s e h a s b e e n b u i l t up t o w here f u l l
u t i l i z a t i o n o f th e f o r a g e i s p o s s i b l e , th e b u d g e t summary m ust a ls o
r e f l e c t t h e c o s t , o f d is p o s in g o f t h e l i v e s t o c k i n e x c e s s o f t h a t w hich ■
c a n be. s u p p o r te d b y t h e re d u c e d p a s tu r e a c re a g e *
:
S o u rc e s o f D ata
P rim a ry : S u rv e y -^T he p rim a ry d a t a f o r t h i s s tu d y w ere assem b led
i n a c o s t and r e tu r n s s u rv e y o f seed ed i r r i g a t e d p a s tu r e s i n 19 h 9 w ith
s u p p le m e n ta l p r o d u c tio n d a t a f o r 1950 and 1953- o b ta in e d i n 1951° 2 9 /
T h e . s c h e d u le u s e d t o c o l l e c t t h e in f o r m a tio n d e s i r e d
'
made r e c o r d o f
th e farm s i z e and e n t e r p r i s e o r g a n i z a t i o n , th e v a rio u s i n p u t s i n a l l
p h a s e s o f p a s tu r e e s ta b lis h m e n t and m a in te n a n c e , th e tim e p e r io d s o f
g r a z in g b y d i f f e r e n t c l a s s e s o f l i v e s t o c k , l i v e s t o c k p r o d u c tio n , and
s u p p le m e n ta ry fe e d s f e d d u r in g th e g r a z in g season© 3 0 /
The u n iv e r s e f o r t h i s s tu d y i s d e f in e d a s b ein g a l l farm s i n
Y e llo w sto n e and S t i l l w a t e r c o u n tie s h a v in g seed ed i r r i g a t e d p a s tu r e s
w i t h t h e added l i m i t a t i o n t h a t t h e s e be farm s w h ich have b e e n o rg a n iz e d
aro u n d i r r i g a t i o n and hav e d ry ra n g e o n ly a s a su p p lem en t t o th e m ain
o rg a n iz a tio n ©
■
T h is a d d i t i o n a l l i m i t a t i o n i s made on th e a ssu m p tio n *
t h a t e n t e r p r i s e r e l a t i o n s h i p s w ould be q u i t e d i f f e r e n t w here farm s
encom pass a s i g n i f i c a n t p r o p o r tio n o f fa rm in v e s tm e n t i n ra n g e o p e ra tio n s .
2 9 / U n p u b lish e d data©.
3 0 / See A ppendix B f o r s c h e d u le u se d t o c o l l e c t data©
I n a l l 's t h e r e w ere some o v e r 1(20. names o b ta in e d o f fa rm e rs h av in g
se e d e d i r r i g a t e d p astu res® $ l /
T h is l i s t in c lu d e d o n ly th e names_ o f
th o s e fa rm e rs who w ere c o o p e r a to r s w ith a p u b lic ag e n c y , b u t th e y
p ro b a b ly c o n s t i t u t e a s i z e a b le p r o p o r ti o n o f t h e t o t a l o f farm s w ith
s e e d e d i r r i g a t e d p a s tu re s ®
r
T h i r ty sam p le farm s w ere draw n, ran d o m ly , fro m th e l i s t obtained®
A l l t h e names on th e l i s t w ere g iv e n a number and c o rre sp o n d in g , numbers
w ere p la c e d i n a c o n t a in e r from w h ic h t h e sam ple was obtained®
T his
number ($ 0 ) was b e l ie v e d t o be a s l a r g e a s t h a t n eed ed t o o b ta in a
sam ple r e p r e s e n t a t i v e o f t h e u n iv e rse®
Each fa rm e r was. th e n in te r v ie w e d
t o o b ta in t h e in f o r m a tio n d esired ®
S e c o n d a ry D a ta - = P ro d u c tio n d a t a f o r o t h e r c ro p e n t e r p r i s e s a r e
draw n fro m co u n ty p r o d u c tio n s t a t i s t i c s , from w hich a v e ra g e y i e l d s . f o r
v a r io u s c ro p s grow n-on i r r i g a t e d la n d a r e computed®
C o st e s t i m a t e s
f o r th e s e e n t e r p r i s e s a r e ta k e n fro m s ta n d a r d f i e l d o p e r a tio n c o s ts
a s . co m p iled b y t h e U n ite d S t a t e s D ep artm en t o f th e I n t e r i o r and
a d j u s t e d b y in d e x t o th e p r i c e l e v e l o f 1948=U9°
The t o t a l o p e r a tin g
.
c o s t f o r t r a c t o r pow er,- in c lu d in g b o th f i x e d and v a r i a b l e c o s t s
(e x c e p t g a s o lin e c o s t ) , i s b a s e d upon c o s t o f power s ta n d a r d s d ev e lo p e d
.
r■
Ti
». , - ■ ■ ■
........... —
I
-Ir
r . r » rr*"
,
.
.
»■■■ ■
■' n ,■ r n
i
r r.r-.
,
,
,
nr
^ rll „ ■■■■ r-
n
" rnnr i T . n
,
5 l / S o u rc e s c o n ta c te d w e re s H u n tle y I r r i g a t i o n P r o j e c t o f f i c e a t H unt” °“ l e y , M ontanag P r o d u c tio n and M a rk e tin g A d m in is tr a tio n o f f i c e s in
B i l l i n g s and Colum bus, M ontana; S o i l C o n s e rv a tio n ' D i s t r i c t o f f i c e a t
B i l l i n g s ; and c o u n ty a g e n ts o f Y e llo w sto n e and S t i l l w a t e r co u n ties®
f o r d i f f e r e n t g ro u p in g s a c c o rd in g t o h o rsep o w er r a t i n g s o f t h e H ehraska
t r a c t o r t e s t s , w ith g a s o li n e c o s ts added fro m U n ite d S t a t e s D epartm ent
o f th e I n te r io r d a t a , '
The p r i c e s u s e d i n t h i s s tu d y a r e b a s e d upon c o m p ila tio n s o f p r ic e s
r e c e iv e d and p r ic e s p a id b y Montana f a r m e r s .
The a v e ra g e o f th e s e
p r i c e s f o r th e p e r io d 1939"W+ was u s e d a s th e b a se fro m w h ich t o compute
in d e x e s o f p r i c e s f o r th e y e a r s 19U8-U9*
A n a ly s is o f P rim a ry D ata
C o st E s tim a te s —An e s tim a te o f th e c o s t s in c u r r e d i n p a s tu r e
■
I
e s ta b lis h m e n t f o r a l l o f t h e f i e l d o p e r a tio n s am ounted t o $23«U5» a s
shown in T ab le TT ,
The se e d c o s t (f>7®50) i s an a v era g e o f a l l ty p e s o f
se e d u s e d , w ith l9H u n tle y M ix tu re ” p re d o m in a tin g i n fr e q u e n c y o f o c c u r­
ren ce ,
The w a te r c o s t i s c a l c u l a t e d on a p e r a c r e b a s i s a c c o rd in g to
t h e amount c h a rg e d th e fa rm a c r e a g e u n d e r i r r i g a t i o n .
,Charges f o r la b o r
a r e b ro k en down t o t h a t amount o f la b o r u s e d f o r a l l o p e r a t io n s e x c e p t
irrig a tio n
o n ly .
and a s e p a r a t e ch arg e f o r th e la b o r u se d f o r i r r i g a t i n g ,
A l l l a b o r i s c h a rg e d to th e v a r io u s o p e r a tio n s a t th e r a t e o f
$ 1 ,0 0 p e r hour*
S i m i l a r c o s t ite m s f o r m a in te n a n c e o f p a s tu r e s a r e com puted
(T a b le IV ),
The t o t a l c o s t o f $ 1 2 ,Iii+ in c lu d e s a l l pow er, m a c h in e ry ,
l a b o r u s e d p r i m a r i l y f o r d i t c h c le a n in g an d r e p a i r , c l ip p in g and h a y in g ,
f e n c e r e p a i r , and a d d i t i o n a l la b o r c a l c u l a t e d f o r i r r i g a t i n g .
f o r m a in te n a n c e i s a ls o e s tim a te d a t $ 1 ,0 0 p e r h o u r.
Labor
F e r t i l i z e r c o s ts ,
w here i n c u r r e d , am ounted t o an even l a r g e r s h a r e o f t h e t o t a l d u r in g
T ab le IV 0
E s ta b lis h m e n t and M ain ten an ce C o sts P er A cre ( I9I4.8-I4.9 p r ic e s ) ,
(a )
E s ta b lis h m e n t
Item
P a s tu r e s R e p o rtin g
Per cent
Number o f t o t a l
M ain ten an ce
Amount
o f ite m
P a s tu r e s R e p o rtin g
P er cent
Number o f t o t a l
Amount
o f ite m
Seed
68
9 7 .1 4
$ 7*50
Power (b )
M achinery
64
9 1 .4 5
5.44
57
8 1 .4 5
$ 1 .2 7
(c)
62
8 8 .5 7
0 .4 4
56
8 0 .0 0
0 .5 0
Water
70
1 0 0 .0 0
2 .5 4
70
1 0 0 .0 0
2 .5 4
Labor (d )
Irrig a tio n
Labor (d )
T o ta l
C o sts ( f )
70
1 0 0 .0 0
4 ,9 6
66
9 4 .2 9
2 .2 6
2 .5 7 ®
68
9 7 .1 4
6 .0 7
0 .0 0
$ 2 5 .4 5
$ 1 2 .4 4
( a ) S o u rce f o r p r i c e in d e x a d ju s tm e n ts s Bureau o f A g r i c u l t u r a l Econo­
m ic s , A g r i c u l t u r a l P r i c e s , USDA, W a sh in g to n , D. C ., J a n u a r y $ 1 , 1950»
Po 45«
(b ) In c lu d in g i n t e r e s t on in v e s tm e n t, d e p r e c i a t i o n , t a x e s , in s u r a n c e ,
g r e a s e , o i l , r e p a i r s , and f u e l . S o u r c e : Parm B udget S ta n d a rd s f o r
I r r i g a t i o n F arm ing, U, S . D ep artm en t o f th e I n t e r i o r , B u reau of
R e c la m a tio n , B i l l i n g s , M ontana, O c to b e r, 1948, pp. 6 4 -5 •
(0 ) In c lu d in g a l l o f (b ) above e x c e p t f u e l .
(d ) L abor v a lu e d a t $ 1 .0 0 p e r h o u r.
( e ) The a v e ra g e number o f i r r i g a t i o n s d u rin g m a in ten a n ce was 1 1 .8 .
E s tim a tin g t h e a v e ra g e number o f i r r i g a t i o n s t h e y e a r o f e s t a b l i s h ­
ment a t 5 t i m e s :
5 7 1 1 .8 ” 4 2 .5 7 # o f $ 6 .0 7 - $ 2 .5 7 .
( f ) O nly t e n o u t o f th e s e v e n ty p a s tu r e s w ere f e r t i l i z e d d u r in g th e y e a r
o f e s ta b lis h m e n t a t an a v e ra g e c o s t o f $ 1 5 .6 7 f o r th e t e n p a s tu r e s
(b a rn y a rd m anure v a lu e d a t $ 1 .$ 0 p e r t o n , and I . 5 to n s p e r l o a d ) .
A dding t h e c o s t o f f e r t i l i z a t i o n w ould in c r e a s e th e e s ta b lis h m e n t
c o s t t o $ 5 7 .1 2 p e r a c r e . Twenty p a s tu r e s w ere f e r t i l i z e d d u rin g
m a in te n a n c e a t an a v e ra g e c o s t o f $19«91 p e r a c r e . I n c lu d in g t h i s
c o s t i n t h e t o t a l m a in te n a n c e c o s t w ould in c r e a s e t h a t c o s t t o $52.55
per a c re .
m a in te n a n c e th a n i n e s ta h lis h m e n te
The a v e ra g e c o s t f o r t h e tw e n ty
p a s tu r e s f e r t i l i z e d was $19»91 p e r a c r e o r 61«.5 p e r c e n t o f t h e t o t a l
m a in te n a n c e cost®
A lth o u g h t h i s c h a rg e f o r f e r t i l i z e r i s c o n s id e re d
a s a c o s t , i t d o es n o t r e p r e s e n t a c t u a l , o u tl a y f o r t h e o p e ra to r*
The
out - o f -p o Cfcetli c o s t o f f e r t i l i z i n g w ith "barnyard manure would
n o t in c lu d e th e v a lu e p la ced on manure h ere but would in c lu d e o n ly
c o s t s f o r machine u s e , f u e l , o i l , and r e p a ir s*
I f th e p a s tu r e w ere i n a r o t a t i o n w h ic h k e p t th e la n d i n p a s tu r e
f o r ( s a y ) f i v e y e a r s , t h e t o t a l y e a r l y e s ta b lis h m e n t and m a in ten a n ce
c o s t would
L
b
s ' $33»30 p e r a c r e f o r e a c h .o f th e f i v e
y e a r s i f th e p a s tu r e w ere f e r t i l i z e d ea c h year®
I f f e r t i l i z e r w ere
a p p lie d th e f i r s t , t h i r d , and f i f t h y e a r s ( e v e r y o t h e r y e a r ) , th e c o s t
w ould amount to |y .% * —
o f t h e f i v e y e a rs *
= |2 5 « j6 p e r a c r e f o r ea c h
T h is r a t e of f e r t i l i z a t i o n i s ev en more f r e q u e n t
th a n g e n e r a l l y p r a c t i c e d i n t h e sam ple a r e a w here one p a s tu r e i n seven
was f e r t i l i z e d d u r in g e s ta b l is h m e n t and two p a s tu r e s i n sev en w ere
f e r t i l i z e d d u r in g m a in te n a n c e d u r in g 19ll9«
C o sts o f e s ta b l is h m e n t d i f f e r e d w id e ly u n d e r th e "two m ost common
m ethods o f seeding"*
Twenty=1e i g h t p a s t u r e s w ere s p r in g - s e e d e d w ith a
n u r s e c ro p and t h i r t y w ere f a l l - s e e d e d i n s m a ll g r a in s tu b b le *
T o ta l
e s ta b lis h m e n t c o s t s f o r s e e d in g w ith a n u r s e cro p w ere $29*66 p e r a c re ,-'
w h ile t h e same c o s t ite m s f o r e s ta b lis h m e n t i n g r a in s tu b b le w ere $9«45
p e r acre®
However, th e a d d i t i o n a l c o s t o f s e e d in g w ith a n u r s e cro p
may b e m ore t h a n o f f s e t b y th e v a lu e o f t h e n u r s e cro p h a rv e s te d *
h5
The o n ly c o s t s w h ich n e e d t o be c o n s id e r e d a s f a r a s th e n u r s e cro p i s
c o n c e rn e d a r e t h e se e d and h a r v e s ti n g c o s ts *
A ll o th e r c o s t s fcave b e e n
in c u r r e d s p e c i f i c a l l y f o r t h e p a s t u r e .
Ten of t h e p a s tu r e s i n th e sam ple w ere seed ed w ith b a r l e y a s a
n u r s e c r o p , . The y i e l d s r e p o r te d a v e ra g e d 55°b5 b u s h e ls p e r a c r e fro m
a t o t a l o f 5 ^ ,5 a c r e s .
E s tim a tin g t h e p r i c e o f b a r l e y a t $ 1 ,1 0 p e r
b u s h e l i n 19^-9* th e g r o s s r e t u r n fro m t h i s n u r s e cro p a v e ra g e d $60*96
per ac re ,
A llo m n g $3<>30 p e r a c r e se e d c o s t and $9*00 p e r a c r e h a r v e s ti n g
c o s t le a v e s a n e t r e t u r n o f $ 5 2 ,6 6 p e r a c r e from th e n u r s e c ro p w ith
w h ic h t o d e f r a y t h e p a s tu r e e s ta b lis h m e n t c o s t s and th e incom e t h a t may
have been fo re g o n e i n n o t p la n tin g a c a s h c r o p .
I f i t can b e e s tim a te d t h a t s e e d in g b a r l e y as a n u r s e cro p re d u c e s
i t s y i e l d by 20 p e r c e n t , s e e d in g b a r l e y a lo n e w ould have y ie ld e d 7 0 ,6 b u s h e ls p e r a c r e , w ith a g ro s s r e t u r n o f $77=66 p e r a c r e .
A llo w in g $20,00
an a c r e f o r grow ing and h a r v e s t i n g b a r le y le a v e s $57»66 n e t r e t u r n p e r
a c re .
The o p p o r tu n ity c o s t o f s e e d in g p a s tu r e w ith a n u r s e crop in s t e a d
o f c a s h g r a i n i s t h e d i f f e r e n c e i n n e t r e t u r n s betw een t h a t w h ich t h e
c a s h c ro p a lo n e w ould have y ie ld e d and t h e y i e l d o b ta in e d fro m th e n u r s e
c ro p ($ 5 7 ,6 6 “ 5 2 ,6 6 - $5»00 p e r a c r e ) =
T h is c o s t a s p e c t h a s been
o m itte d i n e s ti m a t in g th e v a r io u s c o s t s o f p a s tu r e p r o d u c tio n ,
A s i m i l a r a n a l y s i s o f th e o p p o r tu n ity c o s t o f s p r in g - s e e d in g
w ith o u t a n u r s e c ro p may be made*
U sing th e y i e l d o f b a r l e y a g a in f o r
t h e p u rp o se o f c o m p a ris o n , th e o p p o r tu n ity c o s t w ould be t h e d i f f e r e n c e
b etw een t h e e s tim a te d r e t u r n fro m b a r l e y ($57=66 p e r a c r e ) and th e amount .
o f hay o r g r a z in g o b ta in a b le from the" p a s tu r e th e f i r s t y e a r ,
(The
a v e ra g e hay y i e l d o f the- t h r e e m ix tu re s u s e d i n th e H u n tle y e x p e rim e n t
w ere Oa58 to n s o f h a y * )
The d i f f e r e n c e betw een th e n e t r e t u r n o f th e
c a s h c ro p and th e v a lu e o f t h i s c u t t i n g o f hay i s t h e o p p o r tu n i ty c o s t
o f s e e d in g p a s tu r e w ith o u t a n u r s e crop*
A n o th e r c o s t ite m i s t h a t o f i n t e r e s t on t h e in v e s tm e n t i n p a s tu re *
T here i s an o p p o r tu n ity c o s t f o r th e c a p i t a l in v e s t e d i n th e p a s tu re *
th e c o s t 's b e in g t h e r e t u r n o b ta in a b le i n th e b e s t a l t e r n a t i v e i n v e s t ­
m ent O
A lth o u g h n e g l e c te d i n th e above c o s t e s ti m a t e s o f p a s tu r e p ro d u c tio ri* th e b u d g e t ta k e s t h e o p p o r tu n ity c o s t i n t o a c c o u n t s in c e i t d e a ls
w ith c o m p a ra tiv e n e t r e t u r n s o f th e v a r io u s farm o r g a n iz a tio n s *
P r o d u c tio n E s tim a te s = - E s tim a te d y i e l d s o f th e p a s tu r e s i n th e sam ple
farm s a r e b a s e d upon norm al l i v e s t o c k r e q u ir e m e n ts i n term s of pounds
o f t o t a l d i g e s t i b l e n u t r i e n t s $ 2 / ( h e r e a f t e r r e f e r r e d t o a s TDH's)*
From t h i s re q u ir e m e n t i s d e d u c te d t h e pounds o f TDU's from fe e d s fe d
s u p p le m e n ta lly t o t h e l i v e s t o c k d u r in g th e p a s tu r e seaso n *
The r e ­
m a in d er i s th e n c r e d i t e d t o t h e p a s tu r e a s t h e y i e l d i n pounds o f TDH
e q u iv a le n ts *
T h is i s r e f e r r e d t o a s "the r e s i d u a l c la im a n t method* 5 5 /
5 2 / H u tr ie n t r e q u ir e m e n ts o f th e d i f f e r e n t c l a s s e s o f l i v e s t o c k a r e b a se d
ons- Com m ittee on A nim al n u t r i t i o n * Recommended H u tr ie n t A llo w a n c e s ,
f o r D om estic A nim als* H a tio n a l R e se a rc h C ouncil* W ash in g to n 25* D* G«
M o's I ' t o VI* r e v i s e d , 1950°
5 5 / Hesiu s* E r n e s t J** A l l o c a t i o n o f Ih rm R eso u rces f o r Economic P ro d u c­
t i o n o f P a s tu r e F o ra g e * A g r i c u l t u r a l E x p erim en t S t a t i o n B u l l e t i n
5 5 B 7 ^ M iv e r s ity o f K entucky* L ex in g to n * Kentucky* June* 1951, PPo 1213.
. '
hi
T here a r e some t h e o r e t i c a l w eak n esses i n t h i s m ethod w h ic h sh o u ld
he noted®
One i s t h a t o f assu m in g TDU’ s o f d i f f e r e n t f e e d s a r e p e r f e c t
s u b s t i t u t e s f o r one a n o th e r and t h a t t h e TDHt S from p a s tu r e a r e p e r ­
f e c t l y s u b s t i t u t a b l e f o r th o s e fro m h ay and g r a i n , w h ich p r o b a b ly i s n tt
tru e .
The m ethod ig n o r e s t h e p o s s i b i l i t y t h a t t h e r e may be a com ple­
m e n ta ry e f f e c t upon t h e d i g e s t i v e p r o c e s s e s i n th e . a n im al body when
g r a i n s a r e f e d a lo n g w i t h p a s tu r e g r a z in g .
Where t h e r e i s a com ple­
m e n ta ry e f f e c t , t h e p a s tu r e w i l l be g iv e n f u l l c r e d i t f o r i t , te n d in g t o
o v e rv a lu e th e y i e l d o f p a s t u r e s .
The m e r i t o f t h i s m ethod i s th e s im p li
c i t y w i t h w h ich y i e l d s may b e c a l c u l a t e d ,a n d th e e r r o r due t o com ple­
m e n ta r it y o f fe e d s i s p ro b a b ly q u i t e s m a l l.
E s tim a te s o f th e p r o d u c tio n o b ta in e d fro m 19U9"51 i n c l u s i v e a r e
shown i n T ab le V .
S ix t y - f o u r o f th e p a s t u r e s , t o t a l i n g 339®5.,a c r e s ,
w ere g ra z e d i n 191+9 w ith a t o t a l p ro d u c tio n o f 768565 pounds o f TDH
a v e ra g in g 2261+ pounds o f TDH p e r a c r e . '
I n 1950, f i f t y - s e v e n p a s tu r e s
w ere g ra z e d , t o t a l i n g 317 a c r e s and y i e l d i n g 598370 pounds o f TDH
a t a n a v e ra g e p e r a c r e y i e l d o f 1888 pounds TDH.
P ro d u c tio n f o r 1951
am ounted t o 6781+75 pounds TDH, w ith a n a v e ra g e o f 1950 pounds TDH
p e r a c r e fro m s ix ty - o n e p a s tu r e s g ra z e d an d one from w h ic h a hay
c ro p was ta k e n i n p la c e o f g r a z in g f o r a t o t a l o f 381+ a c r e s »
T o ta l
p r o d u c tio n f o r th e t h r e e y e a r s am ounted t o 201+51+00 pounds TDH fro m
1001+.5 a c r e s , a v e ra g in g 2036 pounds TDH p e r a c r e .
T here was c o n s id e r a b le v a r ia n c e i n t h e y i e l d s o f d i f f e r e n t p a s­
tu re s .
P r o d u c tio n ra n g e d fro m a low o f 299 pounds TDH p e r a c r e from
T ab le V „
Y ear
E s tim a te s o f P r o d u c tio n ( i n pounds o f ,TDN1s)»
Mb, o f
P a s tu r e s
191+9
A cres
G razed
Y ie ld
A ve0 Y ie ld
per a c re
3 3 9 .5
768565
2261+
1950
57 •
517
598370
1888
1951
62 ( a )
31-lS ( a )
6781+75
1950
201+51+00
2036
191+9-51
(a )
183
IOOI1..5
I n c lu d in g o n e p a s tu r e hayed (6 a cre s)*
one p a s tu r e i n 19b9 t o a h ig h o f 8270 pounds IDE p e r a c r e f o r a d i f ­
f e r e n t p a s tu r e i n b o th 1950 and 1951•
The r a t e s o f g r a z in g on th e
d i f f e r e n t fa rm s m ig h t a c c o u n t f o r a l a r g e p a r t o f th e v a r i a t i o n ,;
A l t e r n a t i v e P a s tu r e U se s-^ T h e re i s some f l e x i b i l i t y i n th e u s e s
t o w h ic h p a s t u r e s may be p u t i f th e g r a z in g c a n n o t be u t i l i z e d .
The
p a s tu r e may p r o f i t a b l y be plow ed u n d e r a s a g re e n manure c ro p i f two
c o n d itio n s a r e m e t:
( l ) t h a t t h e p r o p o r ti o n o f th e farm i n p a s tu r e
i s s m a ll enough t h a t th e p a s tu r e i s s t i l l com plem entary t o th e o th e r
c ro p s ( s e e F ig u re l ) and (2 ) t h a t t h e c o s t s o f e s t a b l i s h i n g th e p as­
t u r e a r e no g r e a t e r th a n t h e c o s ts o f p l a n t i n g and h a r v e s ti n g th e
o th e r c r o p s .
A n o th e r a l t e r n a t i v e t o g r a z in g , i f t h e r e i s n o t s u f f i c i e n t l i v e ­
s to c k t o u t i l i z e th e p a s tu r e f o r a g e , i s t h e rem o v al o f a h ay cro p f o r
f e e d in g t o l i v e s t o c k a t a l a t e r d a te *
T here i s a l s o th e p o s s i b i l i t y o f h a r v e s ti n g a s e e d cro p from th e
p a s t u r e , a lth o u g h i t i s d o u b tf u l t h a t th e s e e d o b ta in e d i n t h i s manner
b9
w ould "be o f t h e same p r o p o r ti o n a te m ix tu r e a s t h a t o f th e g r a s s e s ,
s in c e t h e g r a s s e s and legum es m ig h t have, w id e ly d i f f e r i n g m a tu r it y
d a te s
50.PARI I I I .
EBStJLTS
P r e s e n t O r g a n iz a tio n i n th e A re a
The sam ple o f farm s drawn i n t h e two c o u n tie s (Y e llo w sto n e and
S t i l l w a t e r ) showed l e s s v a r i a t i o n in farm s i z e th a n m ig h t b e e x p e c te d
i n an a r e a o f t h i s s i z e .
(The t h i r t y sam ple farm s w ere s c a t t e r e d
o v e r a n a r e a e i g h t y m ile s lo n g i n th e Y ello w sto n e v a l l e y . )
I t may be
t h a t c o m p lete r e p r e s e n t a t i o n o f s a m p lin g ' was n o t o b ta in e d and t h a t
a c t u a l v a r i a t i o n s i n t h e s i z e o f u n i t s i s g r e a t e r th a n i n d i c a t e d by
t h e sam ple*
H ow ever, o n e - t h i r d o f th e sam ple farm s w e re i n th e
H u n tle y i r r i g a t i o n d i s t r i c t , opened t o . s e tt le m e n t by t h e B ureau o f
R e c la m a tio n , and t h e o r i g i n a l t r a c t s w ere l i m i t e d t o f o r t y a c r e s o r
le s s * 3 b /
The re m a in d e r o f t h e sam ple was made up o f farm s s e rv e d by
l o c a l ( p r i v a t e ) d i t c h com panies on la n d t h a t was s t a t e o r r a i l r o a d
owned o r h o m e stead ed , and th e u n i t s w ere o f a l a r g e r s i z e th a n th e y
w ould have been had th e y been u n d e r p u b li c development®
Farm S i z e - The m easu re o f fa rm s i z e i s th e num ber o f i r r i g a t e d
'
a c r e s i n t h e fa rm u n i t . T able V I shows th e v a r i a t i o n i n s i z e found
i n th e sam p le.
The modal group i s i n t h e 8 1 - l6 0 - a e r e s i z e , making up
o n e - h a l f o f th e s a m p le .
These farm s o p e r a te d a t o t a l o f 1826 a c r e s ,
a v e ra g in g 121*7 a c r e s p e r fa rm .
T hree o f th e farm s i n t h i s g ro u p
had a d d i t i o n a l la n d t o o p e r a te w ith t h e i r i r r i g a t e d l a n d .
E le v e n o f t h e sam ple farm s w ere in th e 0 - 8 '0 - s iz e g ro u p , h av in g
3 b / B e l l , Ec J o , J r . , S u c c e s s f u l Farm ing P r a c t i c e s i n t h e B il l i n g s - B e e t
R eg io n , A g r i c u l t u r a l E x p erim en t S t a t i o n B u l l e t i n 2 J 2 , Montana! S t a t e
C ollege,, Bozeman, M ontana, S ep te m b er, 1950, p» 7®
51
an a v e ra g e o f 63®5 a c r e s p e r farm®
O nly one farm in t h i s group had
d ry la n d (I4.8O a c r e s ) a lo n g w ith th e i r r i g a t e d land®
T ab le V I.
S iz e G rouping o f Sample ,Farm s.
A verage
A c re s
Irrig a te d
S iz e
Group
D-80
Humber
o f farm s
Farms w ith
D ry la n d
A cres o f
D iy la n d
P e r Farm
6 3 .5
11
I
1)80.0
1 2 1 .7
■15
3
2 1 1 .3
161-320
20I4.0O
u
0
0 ,0
M l
1 1 1 .3
30
31-160
'
•
h\
.
2 7 8 .5
The l a r g e s t s i z e g ro u p , 1 6 1 -3 2 0 , c o n ta in e d f o u r farm s w i t h an
a v e ra g e o f 20l|. a c r e s p e r farm®
On th e b a s i s o f t h i s a r r a y o f farm s i z e s , a s y n t h e t i c fa rm o r ­
g a n i z a ti o n w i l l be s e t 'u p a s one e x h i b i t i n g th e a v e ra g e c ro p o r g a n i­
z a t io n s o f t h e modal g ro u p .
T h ree farm s i n t h i s g roup had 120 a c r e s
i n t h e u n i t ; t h i s s i z e w i l l . b e u se d f o r t h e 11t y p i c a l 11 fa rm t o be.
d e v e lo p e d .
The c ro p and p a s tu r e o r g a n iz a ti o n o f th e modal group w ere as
f o l l o w s s;
T ruck cro p s t
p e rc e n t.
P a s tu r e s
31=5 p e r c e n t, , G rains;
11 p e r c e n t,
Oorns-'
26 p e r c e n t .
1®3 p e r c e n t.
Hays;
F allo w s
20
1®2 p e r ­
c e n t , and W aste (fe n c e , l i n e s , r o a d s , i r r i g a t i o n d i t c h e s , and farm ­
s t e a d ) 9 p e r c e n t o f t o t a l acres®
These a r e th e p r o p o r ti o n a te amounts
w h ic h w i l l be c o n ta in e d i n th e farm d e v e lo p e d a s th e t y p i c a l o p e r a t io n
f
52
B udget S y n th e s i s - ” A cro p b u d g e t p la n ( l e s s d i r e c t e x p e n s e s ) i s
d e v e lo p e d i n T a b le V II*
a s t h e modal groups
The c ro p s p la n n e d a r e i n th e same p r o p o r tio n
$8 a c r e s o f s u g a r b e e t s , 16 a c r e s o f w h e a t, 6*5
a c r e s o f o a t s , 8*5 a c r e s o f b a r l e y , 21). a c r e s o f h ay , 1$ a c r e s o f p a s tu r e ,
1*5 a c r e s o f c o r n , 1*5 a c r e s o f f a l l o w , and 11 a c r e s o f w aste*
Y ie ld s
f o r a l l c ro p s a rp a v e ra g e s f o r Y e llo w sto n e and S t i l l w a t e r c o u n tie s i n
I9I48-I1.9® 5 5 /
The y i e l d d a t a w ere o b ta in e d b y d i v i d in g t o t a l i r r i g a t e d
la n d p r o d u c tio n f o r ea c h cro p b y t h e t o t a l a c re a g e h a r v e s te d i n th e two
c o u n tie s d u rin g I9I4B and 191(9®
m anner*
P r ic e d a t a w ere o b ta in e d i n t h e same
T o ta l v a lu e o f e a c h cro p h a r v e s te d d iv id e d by t o t a l p ro d u c tio n
f o r t h a t c ro p g iv e s t h e u n i t p r ic e f o r e a c h p ro d u ct*
$2*1)1). p e r to n i s i n c lu d e d i n ,th e p r i c e o f s u g a r b e e ts *
An a d d i t i o n a l
T h is i s th e tw o -
y e a r a v e ra g e (I9l|.8=l)9) o f governm ent paym ents u n d e r th e S u g a r Act* 3 6 /
From th e y i e l d and p r i c e d a t a , g ro s s c ro p s a le s a r e e s tim a te d a t
$6775 ($5969 from.1 b e e t s , $7l|-5 fro m w h e a t, and $59 from s a l a b l e s u r p lu s
h a y )*
The am ount o f s u r p lu s fe e d g r a in s o r h ay w i l l depend upon th e
f e e d f e d to l i v e s t o c k a s g iv e n i n th e t a b l e o f l i v e s t o c k ex p en ses* 5 7 /
I n t h i s fa rm o r g a n i z a t i o n , hay i s th e o n ly f e e d cro p i n e x c e s s o f need*
3 5 / M ontana A g r i c u l t u r a l S t a t i s t i c s , M ontana D ep artm en t o f A g r ic u lt u r e
and L ab o r I n d u s tr y c o o p e r a tin g w ith ' U n ite d S t a t e s D ep artm en t o f
A g r i c u l t u r e , B ureau o f A g r i c u l t u r a l E conom ics, H elen a,. M ontana,
V ole I I I , D ecem ber, 1950» P® 103°
3 6 / I b i d *, p* 1 3 .
3 7 / Feed R eq u irem en ts i n T able X b a s e d on Recommended H u t r i e n t Allow=
a n c e s f o r D o m estic A n im als, op* c i t *
53
T ab le V I I .
C rop
A cres
B udget f o r Crop P r o d u c tio n .
Y ie ld
P er
A cre ( a )
Crop D i s p o s i t i o n
T o ta l
Feed
S a le
U n it
P r ic e ( a )
G ross
S a le s
$5969
S u g ar B eets
(to n s )
3 8 .0
12
456
—
456
$ 1 3 .0 9 (b )
Wheat
G ra in s
(b u ) O ats
1 6 .0
30
480
75
405
1 .8 4
745
6 .5
45
293
293
B arley
8 .5
40
340
3
1 9 .5 3
59
Hay ( T .)
P a s tu r e
( l b s . TDN)
2ko0
1 .9 4
1 3 .0
2036
C orn (b u )
1 .5
53
F a llo w
1 .5
W aste
1 1 .0
T o ta l
1 2 0 .0
(a )
(b )
4 6 .5
26470
4 9 .5
340
4 3 .5
26470
4 9 .5
_ _
$6773
S o u rc e f o r y i e l d and p r i c e d a t a : M ontana A g r i c u l t u r a l S t a t i s t i c s ,
o p . c i t . , p p . 95* 10$.
I n c lu d in g $ 2 .Iti+ p e r to n g o vernm ent paym ent. S o u r c e : I b i d . , p . 13*
E s tim a te s o f c ro p p ro d u c tio n ex p e n se s a r e g iv e n i n T able V I I I .
These a r e d i r e c t e n t e r p r i s e ex p en ses w h ich a r e in c u r r e d o n ly a s p ro d u c tio n
in p u t s a r e u s e d and w h ich a r e s p e c i f i c f o r a g iv e n e n t e r p r i s e .
A
m a c h in e ry d e p r e c i a t i o n ex p en se i s c h a rg e d a g a i n s t th e b e e t e n t e r p r i s e
f o r t h a t m a ch in ery w h ich i s u se d e x c l u s i v e l y i n th e p r o d u c tio n o f su g a r
b e e ts .
A l l o th e r m achine d e p r e c i a t i o n w h ich c a n n o t be c h a rg e d to a
s i n g l e e n t e r p r i s e w i l l be c h a rg e d a g a i n s t th e farm as a w h o le .
The
am ounts o f th e d i r e c t e x p e n se s depend upon p r a c t i c e s p r e s e n te d a s
5U '
b e in g t y p i c a l i n th e "Farm B udget S ta n d a rd s f o r I r r i g a t i o n FariTiing11 $ 8 /
and p r o d u c tio n d a t a f o r Y ello w sto n e and S t i l l w a t e r c o u n tie s * 3 9 / A d ju s t­
m ents o f e x p e n s e s to r e f l e c t I9I48-U9 p r i c e s a r e made a c c o r d in g to c o s t
in d e x e s a s o b ta in e d i n "The Farm C ost S i t u a t i o n . 11- J4.0/
The ex p e n se o f " f u e l , g r e a s e , o i l , and r e p a i r s " i n th e u s e o f
t r a c t o r pow er i s b a s e d upon a m ethod d e v e lo p e d by O r lin J . S c o v i l l e ,
w h ich p e rm its t h e s e p a r a t e c a l c u l a t i o n o f th e f i x e d and v a r i a b l e
e le m e n ts a f f e c t i n g t h e c o s t o f m a ch in ery u s e , I j l /
As a d a p te d t o t h i s s tu d y , th e f i x e d t r a c t o r d e p r e c i a t i o n c o s t i s
c a l c u l a t e d a c c o rd in g t o t h e h o u rs o f a n n u a l u s e ( a p p r o x im a te ly 800
h o u rs f o r t h i s fa rm o r g a n i z a t i o n ) , and a v e ra g e l i f e e x p e c ta n c y o f th e
m ach in e' (12 y e a r s ) .
k9 idas |2 1 1 7
A v erag e new c o s t o f a tw o -p lo w t r a c t o r i n I9I1.8"
Ij-S/ w ith a f ix e d d e p r e c i a t i o n p e r y e a r o f $176*00.
I n t e r e s t on t h e a v e ra g e in v e s tm e n t, t a x e s , and in s u r a n c e a r e e s tim a te d
t o t o t a l 7 p e r c e n t o f a v e r a g e in v e s tm e n t.
The av e ra g e in v e s tm e n t i s
3 8 / Farm B udget S ta n d a rd s f o r I r r i g a t i o n F arm ing, B ranch o f O p e ra tio n
and M a in te n a n c e , TI. S . D ep artm en t o f t h e I n t e r i o r , B ureau o f Reclam­
a t i o n , R egion 6 , B i l l i n g s , M ontana, O c to b e r, 19l|6, p p . 2 -llj..
3 9 / M ontana A g r i c u l t u r a l S t a t i s t i c s , o p . c i t . , p p . 1 0 -1 2 , ll%, 95» 103»
I4.0/ The Farm C ost S i t u a t i o n , U. S« D ep artm en t o f A g r i c u l t u r e , Bureau o f
A g r i c u l t u r a l E conom ics, W ashington 2 5 , D. G ,, ; M a rc h ,. 19lj2, p . 2 .
U l / S c o v i l l e , O r l i n - J . , " F ix e d and V a r ia b le E lem en ts i n th e C a lc u la tio n
o f M achine D e p r e c i a tio n ," A g r i c u l t u r a l Econom ics R e s e a rc h , U. 8 .
D ep artm en t o f A g r i c u l t u r e , Bureau o f A g r i c u l t u r a l Econom i.cs,
W ash in g to n , D. C ., J u l y , 19^9» PP« 69-77®
lj.2 / A d ju s te d b y in d e x fro m th e 1939-4 L a v e ra g e 2 - plow t r a c t o r c o s t as
g iv e n i n Farm B udget S ta n d a rd s f o r I r r i g a t i o n Farm ing, o p . . c i t 6, p» 63
55
T a b le V III=
B udget f o r Crop P r o d u c tio n E x p e n se s, ( a )
S u g ar B e e t s :
D ir e c t Expense
P er A cre
Seed (U«5 l b s . / k . )*
F e r t i l i z e r (5 T. m anure and 100 l b s .
p h o s p h a te /k .)
C o n tra c t l a b o r ( 2 5 .5 m anhours/k.. )*♦
F u e l, G re a s e , O i l , and R e p a irs
H a rv e s tin g and H au lin g
M achinery D e p re c ia tio n * * *
TOTAL
T o ta l
$ 1 .8 0
$
1 0 .9 0
55 A o
5 .6 0
U0.80
Io iA
$93.91+
4 l4
131+5
1)8
1550
55
¥J57o
68
*
Seed p r i c e o f U5 c e n ts p e r pound and s e e d in g r a t e from D. C. I ty r ic k ;
U. S . D ep artm en t o f A g r i c u l t u r e , B ureau o f A g r i c u l t u r a l E conom ics,
Bozeman, M ontana, u n p u b lis h e d d a t a .
** C o n tra c t la b o r r a t e s a d j u s t e d by in d e x o f farm wage r a t e s to r e f l e e t I9I48-I4.9 p r i c e s . S o u r c e : The Farm C ost S i t u a t i o n , o p . c i t . ,
p. 2.
♦ ♦ ♦ S p e c ia liz e d equipm ent u se d o n ly f o r b e e t s .
W heats
D ir e c t E xpense
P er A cre
Seed ( l b u . A e )*
F u e l, G re a s e , O il, and R e p a irs
H a rv e s tin g
TOTAL
♦
$
64
23
88
I 175
P r i c e o f se e d w h eat e s tim a te d a t tw ic e th e m ark et g r a in p r i c e .
O ats s
D i r e c t E xpense
P e r A cre
S eed (2 b u . A ) *
F u e l, G re a s e , O i l , and R e p a irs
H a rv e s tin g
TOTAL
*
$ I4..OO
1.1+1+
5 .5 0
$ 1 0 .9 4
T o ta l
I U .oo
1.41+
5 .5 0
$ 1 0 .9 4
T o ta l
$
I
26
9
36
71
P r ic e o f s e e d o a ts e s tim a te d a t tw ic e t h e m ark et g r a i n p r i c e .
(co n tin u ed on n e x t page)
56
(T a b le V I I I , c o n tin u e d )
B a rle y s
D ir e c t Expense
P e r A cre
Seed (1<>5 BuejA o )*
F u e l, G re a s e , O il, and R e p a irs
H a rv e s tin g
TOTAL
*
$ 28
$ 3 .3 0
IcUU
5 .5 0
$1 0 .2 4
12
U7
FW
P r i c e o f se e d b a r l e y e s tim a te d a t tw ic e th e m ark et p r i c e .
Hays
D ir e c t E xpense
Seed (8 I b s 0A e )*
F u e l, G re a s e , O i l , and R e p a irs
P e r A cre
T o ta l
$ I e 12
$ 27
1.66
TOTAL
*
T o ta l
$ 2 .7 6
Uo
|~ 5 7
S eed p r i c e o f 56 c e n ts p e r pound (19U8-U9 a v e ra g e p r i c e , E l l i o t t
Seed C o ., B i l l i n g s , M o n te). S eed in g r a t e from Re D. M e rcer,
D epartm ent o f Agronomy and S o i l s , Montana S t a t e C o lle g e , Bozeman,
M ontana. C o st o f s e e d a l l o c a t e d o v e r a f o u r - y e a r p e r io d .
P a s tu re s
D ir e c t E xpense
P er A cre
S eed ( l 6 I b s . / A . ) *
F e rtiliz e r* *
F u e l, G re a s e , O i l , and R e p a irs
TOTAL
T o ta l
I 1 .2 2
5<>10
1 .1 9
$ 16
66
15
I 7."5"l
l~97
* From p rim a ry d a t a . S eed c o s t a l l o c a t e d o v e r f i v e - y e a r p e r i o d .
** S e v e n te e n to n s o f m anure a p p l ie d o v e r t h e f i v e - y e a r p e r io d .
TOTAL DIRECT EXPENSES
$!4067
( a ) S o u rce f o r ex p en se ite m s s Farm B udget S ta n d a rd s f o r I r r i g a t i o n
F arm in g , op. c i t . , p p . 2-lU« S o u rce f o r in d e x o f ex p e n se item s 1
The Farm C o st S i t u a t i o n , o p . c i t . , p . 2.
57
c o n s id e r e d a s o n e - h a l f t h e new cost® I4.3/ T h is am ounts t o fyU a n n u a lly .
The t o t a l o f t h e two ex p e n se s f i g u r e d th u s f a r i s $520 p e r y e a r , con­
s t i t u t i n g th e i n d i r e c t ex p e n se item®
The d i r e c t ex p en se o f o p e r a t in g a t r a c t o r ( f u e l , g r e a s e , o i l , and
r e p a i r s ) i s ta k e n fro m T able XXX o f t h e "Farm Budget S ta n d a rd s f o r
I r r i g a t i o n F a rm in g ." i|l|./ W ith f u e l e s tim a te d a t tw e n ty c e n t s p e r ■
g a l l o n , th e h o u r ly d i r e c t ex p en se
o f o p e r a t in g a tw o -p lo w t r a c t o r a t
t h e 800 h o u r a n n u a l r a t e i s t h i r t y - s i x c e n ts p e r h o u r .
The h o u rs
o f t r a c t o r o p e r a t io n m u l t i p l i e d by t h i r t y - s i x c e n ts g iv e s t h e . d i r e c t
ex p en se f o r f u e l , g r e a s e , o i l , and r e p a i r s f o r e a c h e n t e r p r i s e .
I n t h i s fa rm o r g a n i z a t i o n , n e i t h e r b e e t s n o r g r a in c ro p s a r e o f an
a c re a g e s u f f i c i e n t t o w a r r a n t o w n ersh ip o f h a r v e s t i n g eq u ip m en t by th e
o p e r a t o r . h& /
The ex p en se o f h a r v e s ti n g i s c h a rg e d t o each- o f t h e s e
e n t e r p r i s e s a t t h e " c u sto m h i r e " r a t e . I4.6/ An a d d i t i o n a l ex p en se fo r
h a u lin g i s c h a rg e d t h e b e e t e n t e r p r i s e . I4.7/
The a v e ra g e m ilk p r o d u c tio n p e r cow i n Y ello w sto n e and S t i l l w a t e r
c o u n tie s d u r in g 19U8-U9 was 57&0 pounds o f 5*9 p e r c e n t milk® JjB,/
b 3 / S c o v i l l e , o p . o i t p. 75»
I4J4./ Farm B udget S ta n d a rd s f o r
I r r i g a t i o n F arm in g , o p . c i t . , T able XXX,
b 5 / I b i d . , p p 0 6 1 -6 2 .
I46/ I b i d . , p . 8 1 .
l £ / Ib id .
JjB,/ M ontana A g r i c u l t u r a l S t a t i s t i c s , o p . c i t . , p . 19»
58
E s tim a tin g p r o d u c tio n o f a t e n cow d a i r y h e rd a t 5 7 ,6 0 0 pounds a n n u a lly
w ith home c o n su m p tio n a t 559° pounds f o r m ilk , cream , and b u t t e r
(assu m in g a f a m ily
o f. f o u r ) , a n e t o f SOJO pounds o f b u t t e r f a t w ould
be a v a i l a b l e f o r m a rk e tin g a s cream a t $ 0 ,7 0 5 p e r pound b u t t e r f a t I4.9/
a s shown i n T able IX,
The a v e ra g e r e p la c e m e n t ag e o f a d a i r y cow i s e s tim a te d a t e ig h t
y e a rs.
F or a t e n cow h e r d , t h i s makes a n a v e ra g e r e p la c e m e n t r a t e o f •
1*25 cows p e r y e a r ,
A 90 p e r c e n t c a l f c ro p i s e s tim a te d as a v e ra g e f o r
t h e a r e a , w i t h a n o th e r 6 p e r c e n t a v e ra g e a n n u a l d e a th l o s s b etw een t h e
tim e o f " h a v in g " t h e c a l f and t h e tim e i t i s m a rk e ted o r r e a c h e s d a ir y
h e rd re p la c e m e n t a g e .
The u s u a l p r a c t i c e i n th e a r e a o f t h i s s tu d y may
b e t o r e p la c e cows a t an e a r l i e r ag e th a n i s e s tim a te d h e r e , b u t th e
d e a th l o s s on i r r i g a t e d farm s may n o t b e so h ig h a s 6 p e r c e n t.
I f th e s e
two e s ti m a t e s a r e i n a c c u r a t e i n o p p o s ite d i r e c t i o n s , th e e r r o r s w i l l
o f f s e t one a n o t h e r .
W ith home co n su m p tio n e s tim a te d a t one y e a r l in g
a n im a l p e r y e a r , an a v e ra g e o f 6 , 2 a n im a ls a r e l e f t f o r m a rk e tin g
a t $2l|. p e r h u n d red w e ig h t w ith c u l l cows s e l l i n g a t $20 p e r h undred
w e ig h t, 5 9 /
T hree b ro o d sows a r e in c lu d e d in t h e l i v e s t o c k b u d g e t, s in c e t h i s
was t h e a v e ra g e number' p e r fa rm i n t h e 8 9 -1 6 0 a c r e s i z e g ro u p ,
W
Ib id 0
A s in g le
.
5 9 / P r ic e s f o r I9I4-8 ta k e n fro m M ontana Farm and Banch P r i c e s , Mimeograph
C i r c u l a r 51 s M ontana S t a t e C o lle g e , Bozeman, M ontana, A p r i l , 19U9®
The p r i c e s f o r 19U9 w ere a d j u s t e d by t h e in d e x o f l i v e s t o c k p r ic e s
in A g ric u ltu ra l; P r ic e s , op. c i t ,
59
l i t t e r sy stem i s p la n n e d w ith th e sows m a rk e te d i n th e f a l l w ith th e
p ig s o
A s i x p ig l i t t e r i s assum ed t o be t h e a v e ra g e l i t t e r s i z e .
Assum ing a 10 p e r c e n t d e a t h l o s s fro m b i r t h t o m a rk e tin g and an a d d i­
t i o n a l d e a th l o s s f o r re p la c e m e n t p ig s o f 5 p e r c e n t betw een h o ld in g back
from m a rk e tin g and f a r r o w in g ti m e s , t h i s le a v e s t h i r t e e n p ig s f o r home
co n su m p tio n and m a rk e tin g .
T ab le IX.
E n t e r p r is e
No.
10
Amount
B. P. 2245 l b s .
Meat
1500 l b s .
Meat
5400 l b s .
Y e a rlin g s
8 .5
C alves
9
Sows
5
P ork
P ig s
18
P o rk
100
P o u ltr y
Home
Consumed
D is p o s i tio n
M arketed
U n it
Amount
P r ic e
215 l b s .
2030 l b s . $ 0 ,7 0 5
P r o d u c tio n
Kind
D a iry Cows
B udget f o r L iv e s to c k P r o d u c tio n .
750 l b s .
V alu e
$1413
1500 l b s .
0 .2 0
300
4650 l b s .
0 .2 4
1116
_ _
900 l b s .
0 .1 8
162
3564 l b s . ( a ) WiO l b s .
2420 l b s .
0 .2 2
552
Eggs
850 doz. (a) 125 d o z .
700 d o z .
0 .4 0 5
284
Meat
775 l b s .
90 l b s .
665 l b s .
0 .3 0
200
900 l b s .
TOTAL
$4025
( a ) An a v e ra g e o f J «2 p ig s p e r y e a r h e ld a s re p la c e m e n t s t o c k .
(b ) T w e n ty -fiv e dozen eggs u s e d f o r h a tc h in g c h ic k s .
The a v e ra g e number o f c h ic k e n s i n th e modal group was a p p ro x im a te ly
one h u n d re d , 80 p e r c e n t o f w hich w ere assum ed t o be la y in g h e n s .
The
a v e ra g e number o f eg g s p e r hen p e r y e a r i n M ontana d u rin g I9I48 and 1949
60
w as 128» 5 l /
E s tim a tin g home co n su m p tio n a t 125 dozen eggs w ith 25
dozen sa v e d f o r h a tc h in g c h ic k s le a v e s a p p ro x im a te ly 700 d o zen eggs
t o h e m a rk e te d e
One h u n d red f i f t y c h ic k e n s a r e to be s o l d , in c lu d in g
f i f t y s p r in g f r y e r s .
T w e n ty -fiv e w i l l , be consumed i n th e home and
t h e re m a in d e r h e ld b a c k f o r replacem ent®
M ontana d u rin g I9I4 8 and I ^ W was
The a v e ra g e p r i c e o f eggs i n
1l5<>5 c e n ts- p e r do'zen, and th e a v e ra g e
p r i c e f o r p o u l t r y was 50*7 c e n ts p e r pound $ 5 2 /
The d i r e c t e x p e n se s o f th e l i v e s t o c k e n t e r p r i s e a r e shown i n T able
Xs
Home grown f e e d s a r e in c lu d e d i n th e. t a b l e o n ly t o show th e f e e d
r e q u ir e m e n ts f o r q ach c l a s s o f l i v e s t o c k .
The e x c e ss o f r e q u ir e m e n ts ■
o v e r t h e am ount home grown i s t h e q u a n t i t y o f e a c h fe e d t o be p u rc h a s e d .
W here t h e r e i s a s u r p lu s o f f e e d grown o v e r f e e d f e d , t h a t q u a n t i t y i s
shown i n T able V I I I a s b e in g m a rk e te d . I t i s assum ed t h a t c ro p y i e l d s
■
o v e r t h e a v e ra g e w i l l be s t o r e d a s a b u f f e r a g a i n s t l e s s th a n norm al
y ie ld s .
P r o d u c tio n i n e x c e s s o f a v e ra g e fe e d re q u ire m e n ts may b e m a rk e ted
and s t i l l p ro v id e a s a f e t y m a rg in o f f e e d su p p lie s®
D e p r e c ia tio n o f eq u ip m en t ( m ilk in g m achine and cream s e p a r a t o r ,
hog h o u s e s , and c h ic k e n and b r o o d e r h o u s e s ) i s ch a rg e d a s d i r e c t
e x p e n se s t o t h e d a i r y , hog,- and p o u lt r y e n t e r p r i s e s , r e s p e c tiv e ly ®
It
i s assum ed t h a t t h e s e ite m s o f eq u ip m en t w i l l b e u s e d e x c l u s i v e l y f o r th e
5 1 / M ontana A g r i c u l t u r a l S t a t i s t i c s , o p . c i t . , p« 18.
5 2 / Ib id ,
6l
T ab le Xe
E n te r ­
p ris e
C a ttle
Hogs
P o u ltr y
TOTAL
Kind
B udget f o r L iv e s to c k E x p e n se s,
D i r e c t E x p en ses
Amount
Amount
Home Grown
P u rc h a se d
O ats
B a rle y
Hay
P a s tu r e
V e t,
E q u ip ,
D ep r. (b )
221 b u .
230 b u .
4 i« 5 T.
26500 TDN
Corn
O ats
B a rle y
Skim M ilk
V e t.
B u ild in g
D ep r , (b )
49«5 Hu,
72 b u .
85 b u .
14700 l b s .
Wheat
Mash
B u ild in g
D ep r . (b )
75 b u .
6 0 0 0 lb s 0
l6 l bu.
(a )
U n it
P r ic e
V a lu e
$ 0 .6 7
#108
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
75
XX
XX
XX
58
1 .6 0
0 .6 7
82
36
51 b u .
53 b u .
XX
XX
XX
XX
XX
XX
XX
XX
XX
XX
10
XX
XX
XX
12
XX
XX
XX
XX
6000 l b s .
XX
2 . 7 5 / CAVt
165
25
XX
#549
( a ) Feeds fe d t o l i v e s t o c k b ased on Recommended N u t r i t i v e A llo w an ces f o r
D om estic A n im a ls , o p , c i t =
(b ) V alu e o f eq u ip m en t and b u il d in g s b a s e d upon p r i c e s a s g iv e n i n Farm
B udget S ta n d a rd s f o r I r r i g a t i o n F arm in g , o p , c i t , , p , 57«
A d ju s te d
by in d e x o f b u i l d i n g m a t e r i a l s p r i c e s t o 191:8-49 p r i c e l e v e l .
62
e n t e r p r i s e t o w h ich th e d e p r e c i a t i o n i s c h a rg e d e
In o r d e r t o more a c c u r a t e l y d e te rm in e t h e amount o f h i r e d la b o r
r e q u ir e d above c o n t r a c t hand la b o r and cu sto m h i r e d , a la b o r d i s t r i b u t i o n
• c h a rt (F igo , I I I ) i s made up fro m s ta n d a r d la b o r re q u ire m e n ts f o r th e
v a r io u s c u l t u r a l o p e r a t io n s and th e a v e ra g e amount o f o p e r a t o r and
f a m i ly la b o r f u r n is h e d b y a f a m ily o f f o u r , a s p r e s e n te d i n t h e llF am
B u d g et S ta n d a rd s f o r I r r i g a t i o n Farm ing=" 5 5 / .
The s ta n d a r d assum es a w ork day o f tw e lv e h o u rs d u r in g t h e c ro p p in g
s e a s o n f o r th e o p e r a t o r , w i t h th e f a m ily c o n t r i b u t i n g b y h a n d lin g th e
fa r m c h o re s ( m ilk in g , f e e d in g l i v e s t b c k , and c a r in g f o r p o u l t r y ) , p lu s
c o n t r i b u t i n g to f i e l d w o rk , up t o a maximum o f li|.0 h o u rs p e r m onth d u rin g
t h e summer m o n th s„
L ab o r re q u ire m e n ts f o r d a i r y c a t t l e assum ed th e
m a rk e tin g o f b u t t e r f a t a s cream and u s e o f m ilk in g m ach in es f o r a d a ir y
h e rd o f t e n cows o r more=,
W ith t h i s in f o r m a tio n , a l i n e i n d i c a t i n g o p e r a to r and f a m ily la b o r
may b e draw n a s r e p r e s e n t i n g th e am ount o f la b o r a v a i l a b l e fro m t h i s
f a m i ly th r o u g h o u t t h e year=
C o n s id e ra b le v a r i a t i o n w i l l b e found i n th e
m o n th -to -m o n th f a m ily l a b o r s u p p ly due to v a r i a t i o n s i n h o u rs o f day=
l i g h t and s c h o o l v a c a tio n s®
The h o u rs o f la b o r may be in c r e a s e d a
g r e a t d e a l f o r s h o r t p e r io d s o f tim e i f t h e n e e d a r i s e s »
D u rin g th e
m onths o f May and J u n e , f o r i n s t a n c e , e x t r a e f f o r t may b e p u t f o r t h i n
o r d e r t o e l im i n a te th e n eed f o r h ir e d help®
O r, h e lp may b e had fro m a
5 5 / Farm B udget S ta n d a rd s f o r I r r i g a t i o n F arm ing, op= c i t =, p« 2-5U°
63
1000-1
O p e ra to r and
f a m ily la b o r
a v a ila b le
100-
MONTHS
F ig . 3»
L abor D i s t r i b u t i o n on 120 A cre C ro p -D airy Farm (a )
I O p e ra to r and f a m ily
la b o r u t i l i z e d
[ \\\|
H ire d la b o r
C o n tr a c t hand la b o r
Custom h i r e d h a r v e s ti n g
( a ) S o u rce f o r la b o r re q u ire m e n ts and p e r io d s o f c u l t u r a l o p e r a t io n s $
Farm B udget S ta n d a rd s f o r I r r i g a t i o n F arm in g , o p . c i t . , p p . 2 - 3 ^ .
6L).
n e ig h b o r i n exchange f o r work a t a tim e when t h e o p e r a t o r h as an e x c e ss
o f la b o r o v e r th e am ount r e q u ir e d *
A ls o , t h i s c h a r t may n p t p r e s e n t a
t r u e p i c t u r e o f th e a c t u a l amount o f o p e r a t o r la b o r d u rin g th e months
o f J u l y and A ugust*
D u rin g th e s e m o n th s, t h e ' a v a i la b l e l a b o r s u p p ly
i s n o t d e p i c te d a s b e in g f u l l y u t i l i z e d .
However, a c c o u n t i s n o t ta k e n
o f t h e p o s s i b i l i t y t h a t t h e fa rm e r may spend c o n s id e r a b le tim e i n s u p e r­
v i s i n g c o n t r a c t la b o r and cu sto m h a r v e s t i n g .
F or b u d g e tin g p u r p o s e s , i t i s assum ed t h a t th e o p e r a t o r and f a m ily
l a b o r l i n e i s t h e maximum a v a i l a b l e and t h a t h e lp w i l l be h i r e d when a
■s h o r ta g e o f f a m ily la b o r e x i s t s .
T h is h i r e d h e l p , o th e r th a n c o n t r a c t
hand la b o r a n d .c u s to m h i r e d h a r v e s t i n g , i s ch a rg e d as an i n d i r e c t ex­
p e n se t o th e e n t i r e fa rm o r g a n iz a ti o n r a t h e r th a n an a tte m p t to a s s ig n
i t t o an y s in g le e n t e r p r i s e , th e r e a s o n t S- b e in g t h a t t h i s h i r e d h e lp may
b e u s e d on an y o r a l l o f th e e n t e r p r i s e s .
I n s e t t i n g up t h e in v e n to r y o f m a c h in e ry , eq u ip m en t, and b u i l d i n g s ,
o n ly th o s e ite m s p e r t a i n i n g t o t h e fa rm in g o p e r a tio n s a r e in c lu d e d
(T a b le X l ) ,
Such ite m s a s h o u s in g , home f u r n i s h i n g s , h o u se h o ld e q u ip ­
m en t, and d o m e stic im provem ents a r e o m itte d .
The p u rc h a s e o f th e s e
ite m s depends upon th e s i z e o f th e n e t fa rm income and p e r s o n a l
d e s ire s .
The m ethod o f c a l c u l a t i n g t r a c t o r c o s t s a s u sed h e re 5 k / ch arg e d
t h e e x p e n s e 'o f t r a c t o r r e p a i r s t o t h e e n t e r p r i s e s in th e same p r o p o r tio n
5 k / S c o v ilIe , op, o i t ,
65
T ab le X I-
I n v e n to r y o f M ach in e ry , B u ild in g s , and Equipment* (a)
Ite m .
T r a c to r
Plow
D u ck fo o t
S p ik e to o th H arrow
S p r in g to o t h H arrow
D is c
Wagon
F lo a t
S p re a d e r
D itc h e r
B eet C u ltiv a to r
R o ll e r
B eet D r ill
L ifte r
Mower
S id e D e l- Rake
Dump Rake
S ta c k e r
G ra in D r i l l
M ilk e r
Cream S e p a r a to r
F eed G rin d e r
P o s t H ole D ig g e r
M isco T ools
T ruck
A uto (fa rm s h a r e )
B arn
G ran ary
G arage and Shop
Hog H ouses and e q u ip m ent
P o u l t r y H ouses and
equipm ent
B arbed w ire f e n c in g
Woven w ire 'fe n c in g
E l e c t r i c f e n c in g
I r r ig a t io n S tru c tu re s
TOTALS
L if e
(Y e a rs )
C ost
4 2117
14.37
230
6k
190
205
221
63
332
193
28U
17l+
594
HO
209
265.
120 .
159.
■ 485
152
210
95
300
158
1980
1052 '
1300
375
750
. 2 30
450
315
50
.70
195
$12+128
'
10
18
15
20
18
16
10
10 •
15
20
15
$250
24
15
3
ll
13
22
6
22
20
15
18
12
15
18
15
15
10
15
17
■ 15
5
12
10
33
33
A nnual
Depr(b )
.
10
— (d )
9
— (d )
— (d )
17
18
7
11
32
— (d )
— (d )
6
20
32
165
105
$ — (d )
11
6
2
5
' 5
6 ■
2
8
5
— (d )
4
——(d )
— (d )
5 •
7
3
4
12
i„ (d )
— (d )
2
8
4
15.1 (e )
243 (e)
26 .
39
33 .
H
23
33 .
— (d )
33
33 '
33
— (d )
10
2
2
33
33
A nnual
R e p a irs
(0 ),
5
$891
.
8
15
■-.—(d )
— (d )
6
I
I
4
W k
T o ta l
$250
35
21
5
16
18
28
8
30
15
— (d)
13
— (d)
— (d)
22
25
10
15
44
— (d)
— (d)
8
28
36
3 1 6 (e)
548(e)
65
19
38
— (d).
— (d)
16
3
3
10.
$1445
(c o n t'd on n e x t page)
j
65a
T a b le XIo
( c e n t 1d )
( a ) S o u rc e s Farm B udget S ta n d a rd s f o r I r r i g a t i o n F arm in g , o p e c i t e , ' PPo 56-60%
1
——
( b ) A nnual d e p r e c i a t i o n o f t r a c t o r i s
c a l c u l a t e d i n m ethod p r e s e n te d b y
ppe 69-77« D e p r e c i a tio n o f o th e r
upon n o rm al l i f e e x p e c ta n c y . Farm
F arm ingj op. c i t e , p p . 66-670
b a s e d upon h o u rs o f o p e r a t i o n a s
S 'o o v ille , O r lin J e s- opo c i t . s
m a ch in ery and e q u ip m en t b a se d
B udget S ta n d a rd s f o r I r r i g a t i o n
( c ) A nnual r e p a i r s e s tim a te d a t 2 .5 p e r c e n t o f new c o s t f o r m a ch in ery
and 2 p e r c e n t f o r b u il d in g s and im p ro v em en ts. I b i d a
(d ) These ex p en se ite m s hav e b een e n te r e d a s d i r e c t ex p en ses t o th e
e n t e r p r i s e s f o r w h ich t h e y a r e s p e c i a l i z e d . T ab les V I I I and IX.
( e ) A lso in c lu d e s g a s , o i l , g r e a s e , and t i r e s «
66
a s h o u rs o f t r a c t o r u se*
I t i s r e c o g n iz e d t h a t t h e r e i s an a l t e r n a t i v e
m ethod o f e s t i m a t i n g r e p a i r s on a p e r c e n ta g e o f new c o s t b a s i s a s f o r
o th e r eq u ip m en t and c h a rg in g t h i s ex p e n se t o th e farm as a w h o le =
S in c e t h e m ethod u s e d h e r e .in c l u d e d r e p a i r s a s o n ly one f a c t o r w ith i n
t h e ex p en se ite m - ’’f u e l , g r e a s e , o i l , and r e p a i r s , '* i t may be l e s s
a c c u r a te t o a tte m p t t o s u b t r a c t o u t t h i s e le m e n t o f c o st*
I n d i r e c t ex p en se ite m s t o be e n t e r e d i n t h e b u d g e t summary a r e
shown i n T ab le X II*
These in c lu d e th e t o t a l o f m achine d e p r e c i a t i o n
T ab le X II* - I n d i r e c t and F ix e d Farm E x p en ses
I n d i r e c t E x p en ses
'
M achine D e p r e c ia tio n and
R e p a irs (fro m T able X I)
H ire d L ab o r
TOTAL IEDIRECT
F ix e d E x p en ses
Taxes ( a )
■I n s u r a n c e (b )
B u ild in g and Im provem ents
D e p r e c ia tio n and R e p a irs
(fro m T able X I)
W ater Charge
TOTAL FIXED
Amount
$1291
J+17
$1708
Amount
&36L
55
15U
505
W5"
( a ) R eal e s t a t e t a x r a t e i s an a v e ra g e ' o f t h e r a t e s r e p o r te d
b y 17 o f t h e 30 fa rm e rs in terv iew ed ®
(b ) Amount o f in s u r a n c e b a s e d u p o n th e amount in v e s t e d in .
m a c h in e ry , l i v e s t o c k , b u i l d i n g s , and im p ro v em en ts, a s
com pared w ith l i k e in v e s tm e n ts and in s u r a n c e premium
i n P la n Eo® I , p . 55» Some Econom ic A sp e c ts o f th e
P ro p o se d Lower M arias I r r i g a t i o n P r o j e c t , D ep artm en t .
o f A g r i c u l t u r a l Econom ics and R u ra l S o c io lo g y , M ontana
A g r i c u l t u r a l E x p erim en t S t a t i o n , M ontana S t a t e C o lle g e ,
Bozeman, M ontana i n c o o p e r a tio n w ith th e B ureau o f Re­
c la m a tio n , D ep artm en t o f th e I n t e r i o r , J u n e , 1946.
67
and r e p a i r s (from. T able X I) and th e am ount o f h i r e d h e l p , 5 5 /
F ix ed ex p en se ite m s , shoim i n T ab le X I I , in c lu d e t a x e s , in s u r a n c e ,
and b u i l d i n g and im provem ents d e p r e c i a t i o n and re p a irs®
The am ount o f
th e t a x e s ti m a t e p e r a c r e i s b a s e d u p o n t a x e s a s r e p o r te d by sam ple
fa rm e rs in te rv ie w e d ®
T h is am ounted t o an a v e r a g e o f $3=05 P®r a c r e ,
n o t in c lu d in g w a te r charges®
„
A f t e r e s ti m a t e s have b e e n made o f th e income from c ro p s and
l i v e s t o c k and t h e v a r io u s e x p e n se s hav e b e e n e s tim a te d , a m easu re o f
n e t incom e i s o b ta in ed , b y d e d u c tin g th e t o t a l o f e x p e n s e s fro m t o t a l
( g r o s s ) income (T a b le X IIl)®
T h is i s t h e am ount w hich i s l e f t t o pay
f o r t h e o p e r a to r s * l a b o r , m anagem ent, r i s k b e a r i n g , f a m ily l a b o r , and
f a m i ly liv in g ®
S in c e i n t e r e s t on th e in v e s tm e n t h as b e e n in c lu d e d i n th e i n d i r e c t
e x p e n se o f owning t h e t r a c t o r , th e n e t farm income i s u n d e r e s tim a te d
by t h e am ount o f - t h a t in te r e s t®
The i n t e r e s t was in c lu d e d a s a p a r t o f
" o t h e r f i x e d c o s t s " ( t a x e s , in s u r a n c e , and i n t e r e s t on th e a v e ra g e
,
in v e s tm e n t) w h ich w ere e s tim a te d t o t o t a l 7 p e r c e n t "of th e a v e ra g e i n ­
vestm ent®
I f th e i n t e r e s t w ere (s a y ) 6 p e r c e n t, n e t fa rm incom e would
b e u n d e r e s tim a te d by $63®
T h is i s n o t a m a tte r o f im p o rta n c e i n th e
p ro b lem o f c h o o sin g b etw een a l t e r n a t i v e farm o r g a n iz a ti o n s i f th e
t r a c t o r s a r e o f t h e same v a lu e i n th e a l t e r n a t i v e o rg a n iz a tio n s®
A r e t u r n t o th e o p e r a to r s * la b o r and management an d f a m i l y la b o r
5 5 / E x c lu d in g c o n t r a c t hand la b o r and cu sto m h ir e d h a rv e stin g ®
' ite m s w ere c h a rg e d to th e e n t e r p r i s e s a s d i r e c t expenses®
These
68
T a b le X I I I .
B udget Summary o f R e c e ip ts and E x p e n se s.
Amount
R e c e ip ts
C ro p ss
B e e ts
Wheat
Hay
D ire c t:
Crop
L iv e s to c k
$5969
7h5
59
L iv e s to c k :
Cows
B u tte rfa t
Y e a rlin g s
Hogs
P o u ltr y
Amount
E xpenses
$2+067
52+9
$1616
1291
2+17
1708
$6773
In d ire c t:
M achine D e p r.
and R e p a irs
H ire d Labor
$ 300
12+13
1116
692+
2+82+
2+025
Home Consumed P r o d u c ts :
502
TOTAL
F ix e d :
Taxes
In su ran ce
B u ild in g and
Im provem ents
D e p r. and
R e p a irs
W ater Charge
$11300
362+
55
152+
305
878
$7202
TOTAL
$2+098
NET FARM INCOME
may be e s tim a te d b y d e d u c tin g a ch a rg e f o r i n t e r e s t on t h e in v e s tm e n t
i n th e farm b u s i n e s s .
c ru d e e s t i m a t e .
The r a t e o f i n t e r e s t t o ch a rg e can o n ly b e a
I n t h i s c a s e , th e r a t e o f r e t u r n i n an a l t e r n a t i v e
in v e s tm e n t o f somewhat s i m i l a r r i s k w i l l b e u se d w h ic h , i n i t s e l f , m ust
be o n ly an e s t i m a t e .
Por m a c h in e ry , in c lu d in g th e tr u c k and farm s h a re
o f t h e a u to (6 0 p e r c e n t ^ a r a t e o f 6 p e r c e n t w i l l be assu m ed .
A ra te
o f 6 p e r c e n t f o r l i v e s t o c k and Ui" p e r c e n t f o r la n d , b u i l d i n g s , and im­
p ro v em en ts w i l l be u s e d .
T h is am ounts t o
f o r m a c h in e ry and
e q u ip m e n t, $131 f o r l i v e s t o c k ,a n d $888 f o r la n d , b u i l d i n g s , and imr
p ro v e m e n ts.
D e d u c tin g t h e t o t a l o f th e s e c h a rg e s ($1268) fro m n e t farm
69
incom e ($i|D98) le a v e s $2830 a s a r e t u r n t o th e o p e r a t o r s ? la b o r and
management and f a m i l y I a b o r e
O p p o rtu n ity c o s t e s t i m a t e s , b y t h e above m ethod, may b e u n d e r­
s t a t e d ev en i f t h e s e a r e t h e e x a c t r a t e s f o r m o rtg ag es on t h e d i f f e r e n t
ty p e s o f r e s o u r c e s o
T here i s p r o b a b ly l e s s r i s k i n b u y in g an d h o ld in g
a m o rtg ag e on a r e s o u r c e th a n t h e r e i s i n b u y in g t h a t re s o u rc e ,,
The fa rm o r g a n i z a t i o n s tu d ie d h a s b een assum ed to b e owned d e b t
f r e e and a l s o w ith o u t c u r r e n t o p e r a tin g d e b t s «
Problem s w ould a r i s e
u n d e r a d e b t lo a d w h ich may c a u se th e o p e r a to r t o s h i f t h i s em phasis
t o c ro p s w h ich may y i e l d a r e t u r n i n a s h o r t e r tim e*
F o rag e p ro d u c­
t i o n r e q u i r e s p la n n in g o v e r a lo n g e r p e r io d o f y e a r s th a n do c a s h cro p s
s u c h as w h eat o r b e e t s e
The d e b t lo a d may b e su c h t h a t t h e o p e r a to r
c a n n o t ch an ce re d u c in g h i s incom e f o r a y e a r o r two w h ile f o r a g e s a r e
b e in g e s ta b l is h e d *
T oo, th e method o f r e n t paym ent by a t e n a n t and
t h e s e c u r i t y o f h i s t e n u r e may f o r c e him t o a y e a r - t o - y e a r program o f
p ro d u c in g cash ' c ro p s r a t h e r th a n c o n s id e r in g f u t u r e y i e l d s and in co m es»
A s h i f t t o a g r a s s la n d s ty p e o f o r g a n i z a t i o n w i l l i n c r e a s e th e
in v e s tm e n ts i n l i v e s t o c k , b u i l d i n g s , and eq u ip m en t s p e c i a l i z e d t o
l i v e s t o c k and f o r a g e p r o d u c tio n .
T h is i s s i g n i f i c a n t i n t h a t i n c r e a s ­
in g th e c a p i t a l i n p u t s i n t h i s m anner w i l l n o t n e c e s s a r i l y in c r e a s e t h e
' r e t u r n t o th e o p e r a t o r s , la b o r and m anagem ent»
I t i s a l s o p o s s ib le t o
i n c r e a s e t h e c a p i t a l in v e s tm e n t and n o t g e t an in c r e a s e i n n e t farm
incom eo
W ith r e s u l t s o f t h i s n a t u r e , t h e o p e r a to r may b e j u s t a s w e ll
o f f w ith h i s o r i g i n a l o r g a n iz a ti o n w here a l i k e n e t fa rm incom e and ■
70
r e t u r n to la b o r and management may be o b ta in e d a t a lo w e r t o t a l i n v e s t ­
m ent e
'
A l t e m a t i v e s — The b u d g e te d fa rm o r g a n i z a t i o n above shows n e t farm
incom e t h a t may be e x p e c te d f o r t h a t one p a r t i c u l a r ty p e o f o r g a n iz a ti o n
a t th e p r i c e s an d p r o d u c tio n l e v e l s u s e d .
I t d o e s .n o t show w h e th e r t h a t
i s t h e one m o st p r o f i t a b l e o r g a n i z a t i o n . ■Some o th e r a l t e r n a t i v e o r g a n ic
z a t i o n may b e a b l e t o y i e l d a h ig h e r n e t in co m e»
I n o r d e r t o d e te rm in e how p r o f i t a b l e t h i s o r g a n iz a ti o n i s r e l a t i v e
t o a l t e r n a t i v e s g o th e r o r g a n iz a tio n s , m ust be p la n n e d .
b y u s in g th e s u b s t i t u t i o n m ethod d e s c r ib e d e a r l i e r .
and e x p e n s e s t h a t a r e ch anged need b e c o n s id e r e d .-
T his w i l l be done
O nly th o s e r e c e i p t s
I f one e n t e r p r i s e i s
co m p le te ly , s u b s t i t u t e d f o r , t h e r e w i l l be an added c o s t o f d is p o s in g o f
s p e c i a l i z e d e q u ip m e n t.
T h is c o s t w ould b e th e d i f f e r e n c e b etw ee n th e
d e p r e c i a t e d v a lu e o f th e eq u ip m en t and t h e p r i c e a t w hich i t i s d is p o s e d
o f.
'
T h ree a l t e r n a t i v e o r g a n iz a ti o n s have b e e n s e t up b y w h ich t o make a
co m p ariso n o f n e t farm income o b ta in a b le u n d e r each s y ste m ( T able XIV) =
The o r i g i n a l b u d g e t i s assum ed t o r e p r e s e n t a "g o in g c o n c e r n ," and t h e
a l t e r n a t i v e s a r e p la n n e d a s b e in g ch an g e s fro m th e o r i g i n a l o r g a n iz a tio n .
The f i r s t a l t e r n a t i v e p la n s a c o m p le te ly g r a s s la n d s ty p e of o r g a n i­
z a t i o n w ith th e l i v e s t o c k e n t e r p r i s e b u i l t up to make f h l I u t i l i z a t i o n o f
th e fo rag e a v a ila b le .
The n e t farm incom e t a k e s in t o a c c o u n t th e same
f a c t o r s o f r e c e i p t s and e x p e n d itu r e s a s t h e o r i g i n a l b u d g e t.
A d d itio n s
t o t h e l i v e s t o c k e n t e r p r i s e and s u f f i c i e n t b u i l d i n g s and eq u ip m e n t t o
71
T ab le XIV.
O rg a n iz a tio n
O r ig in a l
Farm
O r g a n iz a tion
A lte r n a tiv e
[Jo. I
A lte rn a tiv e
No. I I
A lte rn a tiv e
No. I l l
B udget Sum m aries o f R e c e ip ts and E xpenses f o r O r ig in a l and
T hree A l t e r n a t i v e Farm O r g a n iz a tio n s .
R e c e ip ts
Crops
L iv e s to c k
Home Consumed
TOTAL
Crops
L iv e s to c k
Home Consumed
TOTAL
C rops
L iv e s to c k
Home Consumed
TOTAL
Crops
L iv e s to c k
Home Consumed
TOTAL
E xpenses
I 6775
1+025
502
$ ll5 0 0
$
215
131+61
502
$11+133
$13701+
—
280
$13981+
$ 2971+
11+301+
502
$17780
Crops
L iv e s to c k
I n d i r e c t and F ix ed
TOTAL
$ U067
51+9
2613
$ 7^29
NET FARM INCOME
$ 1+071
Crops
L i v e s to ck
I n d i r e c t and F ix ed
TOTAL
$
NET FARM INCOME
$ 5733
Crops
L iv e s to c k
I n d i r e c t and F ix e d
TOTAL
$ 7502
ll+3
2983
$10628
NET FAM INCOME
$ 3356
Crops
L iv e s to c k
I n d i r e c t and F ix e d
TOTAL
$ 2101
3286
6158
$1151+5
NET FAPM INCOME
$6235
h a n d le them r e q u i r e an o u tl a y o f a p p r o x im a te ly $6325»
1+87
3859
1+821+
$ 8400
T h is in c lu d e s 20
cows a t $200 e a c h , 6 g i l t s a t $60 e a c h , d a i r y b u ild in g c o n s t r u c t i o n
am ounting t o $1070, hog h o u ses and eq u ip m en t a t $75 p e r sow, and m ilk e r ,
s e p a r a t o r , and o th e r d a i r y equipm ent t o t a l i n g $Ltl^e
O th e r ite m s may
in f l u e n c e a d e c i s i o n t o change t h e farm o r g a n iz a ti o n t o th e ty p e i n d i ­
c a te d b y t h i s a l t e r n a t i v e .
I f th e n e c e s s a r y c a p i t a l o r c r e d i t i s n o t
72
1
a v a i l a b l e , i t w i l l n o t fce p o s s ib le to make t h e c h a n g e «
The la b o r r e ­
•
q u ire m e n ts a r e in c r e a s e d o v e r t h e o r i g i n a l p la n w ith h ir e d h e lp n eeded
th ro u g h o u t t h e y e a r b u t w ith o u t m aking f u l l u t i l i s a t i o n o f t h i s la b o r .
The second a l t e r n a t i v e p la n s a c a s h c ro p o r g a n iz a ti o n of su g a r
b e e ts ' and w h e a t,.
I n t h i s a l t e r n a t i v e , a s i n th e f i r s t ,
b u i l d i n g s and equipm ent w i l l be d is p o s e d o f .
s u r p lu s e s o f
The in c r e a s e i n b e e t '
a c re a g e o v e r t h a t i n th e o r i g i n a l o r g a n i z a t i o n r e q u ir e s a d d i t i o n a l b e e t
e q u ip m e n t.
F in a n c in g p ro b lem s may make t h i s change l e s s d i f f i c u l t t o
m ake, s in c e t h e o n ly a d d i t i o n a l equipm ent r e q u ir e d i s a b e e t h a r v e s t e r i
H ere d i s p o s a l .o f s u r p lu s equipm ent may become a g r e a t e r p ro b lem .
H igh
s e a s o n la b o r r e q u ir e m e n ts w i l l r e s u l t i n a n eed f o r c o n s id e r a b le c a p i t a l
o r s h o r t - t e r m c r e d i t d u r in g t h e g row ing and h a r v e s ti n g s e a s o n ,
u n d e r t h i s s y ste m i s b elow t h e o t h e r o r g a n i z a t i o n s .
H et income
D e c lin in g y ie ld 's
o f b e e t s and w h e a t u n d e r a tw o -c ro p r o t a t i o n w ould c a u se n e t fa rm income
t o d e c r e a s e ev en f a r t h e r *
A l t e r n a t i v e Ho, 3 p la n s a n o r g a n iz a ti o n w h ich s h i f t s t h e p ro p o r­
t i o n s o f th e c r o p s , e l im i n a tin g o a t s , c o m , and f a ll o w .
A d d itio n a l
in v e s tm e n ts o f a b o u t $2100 i n b u i l d i n g s and eq u ip m en t i s r e q u i r e d .
L iv e s to c k in v e s tm e n ts f o r d a i r y cows and g i l t s add $!{.300 more t o th e
c a s h o u tla y o f t h i s p la n .
H ire d l a b o r i s n eed e d th r o u g h o u t t h e y e a r ,
but i t is not fu lly u tiliz e d .
Even w ith o u t f u l l y u t i l i z i n g h ir e d la b o r
/
t h i s p la n shows a h ig h e r n e t fa rm incom e th a n th e o th e r o r g a n iz a ti o n s
c o n s id e r e d .
I t w o u ld h o ld ev e n more p ro m ise f o r a f a m ily w i t h b o th
c h i l d r e n o f h ig h s c h o o l ag e o r o v e r o r f o r a f a m ily w ith more th a n two
. 7
c h ild re n ®
3
T h ere w ould t h e n he a n o p p o r tu n ity t o e l im i n a te th e need f o r
th e h ir e d l a b o r , e x c e p t p o s s i b l y d u r in g t h e s p r in g f i e l d w ork and hog
f a rro w in g time®
The b e n e f i t s t o b e e t and g r a in y i e l d s fro m h a v in g f o r a g e s i n th e
r o t a t i o n have n o t b een estim ated ®
An assu m p tio n o f t h i s n a t u r e m ust b e
b a s e d upon s u b s t i t u t i o n r a t e s fo u n d i n o th e r a r e a s o f t h e country®
If
i t can be assum ed t h a t b e e t y i e l d s w i l l be in c r e a s e d b y two to n s p e r
a c r e and w h eat and b a r l e y y i e l d s by f i v e b u s h e ls ea c h p e r a c r e , th e r e
w i l l b e an in c r e a s e i n n e t incom e o f a p p r o x im a te ly $1+75°
By t h e same
to k e n , b e e t and w h e a t y i e l d s may b e e x p e c te d t o d e c lin e when th e s e
c ro p s a r e grown i n r o t a t i o n a s i s p la n n e d i n th e seco n d a l t e r n a t i v e
fa rm in g system®
I n a l l a l t e r n a t i v e s b u t th e second a p ro b lem o f f in a n c in g f o r a g e
e s ta b l is h m e n t a r i s e s a lo n g w i t h t h a t o f l i v e s t o c k a c c u m u la tio n and
a d d in g t o t h e in v e n to r y o f b u il d in g s and equipment®
The o p e r a to r m ust
b e i n a p o s i t i o n t o w ith s ta n d a r e d u c tio n i n n e t farm income w h ile th e
f o r a g e s a r e b e in g e s ta b lis h e d ®
These c ro p s a r e l i t t l e
more e x p e n s iv e
t h a n c a s h g r a in c ro p s t o p l a n t , b u t th e r e a l i z a t i o n o f a r e t u r n m ust be
s p re a d o u t o v e r a lo n g e r p e rio d o f time®
The a c t u a l c o s t o f e s ta b lis h -=
m ent may be re d u c e d som ew hat, s in c e governm ent p ay m en ts. f o r g r a s s
s e e d in g s may b e o b ta in e d on a b a s i s o f p e r c e n t o f seed cost®
The
d e te rm in in g f a c t o r i n o r g a n iz in g th e fa rm in g sy ste m i s n o t o n ly th e
e x p e c te d n e t farm incom e b u t a l s o th e s u p p ly o f f a m i l y l a b o r and th e
f i n a n c i a l p o s i t i o n o f th e o p erato r®
W ith o u t enough c a p i t a l o r c r e d i t
\
7b
o r a s h o r ta g e -of f a m ily I a b o r s th e o p e r a t o r may n o t r e a l i z e a g r e a t e r
incom e fro m ch an g in g to a n o th e r a l t e r n a t i v e sy ste m .
Income V a r i a t i o n s
The g r o s s incom es from t h e - d i f f e r e n t farm o r g a n iz a ti o n s p la n n ed
w i l l be a f f e c t e d i n v a r y in g d e g re e s a c c o r d in g t o i n d i v i d u a l p ro d u c t
p r i c e v a r i a t i o n s , y i e l d v a r i a t i o n s , and t h e p r o p o r tio n o f g r o s s farm
incom e o b ta in e d fro m t h e d i f f e r e n t o r g a n i z a t i o n s .
I n T ab le XF th e
s e r i e s o f p r i c e s f o r b e e t s , w h e a t, b u t t e r f a t , b e e f , and p o rk f o r th e
y e a r s 1920 t o I9I4S, i n c l u s i v e , a r e t o t a l e d and t h e s ta n d a r d e r r o r f o r 1
each o f th e s e r ie s c a lc u la te d .
I t i s assum ed t h a t th e s e p r i c e
v a r i a t i o n s r e f l e c t a d e q u a te ly t h e v a r i a t i o n s i n g ro s s from th e s e
re s p e c tiv e e n t e r p r is e s .
B e e t p r i c e s a r e th e m ost s t a b l e o f th e e n t e r ­
p r i s e s c o n s id e re d ^ ho w ev er, v a r i a t i o n s i n t h e y i e l d o f b e e t s may be
g r e a t e r th a n f o r ( s a y ) b u t t e r f a t p r o d u c tio n , d e c r e a s in g t h e r e l a t i v e
incom e s t a b i l i t y o f s u g a r b e e t s .
These two f a c t o r s , p r i c e and y i e l d
f l u c t u a t i o n s , may te n d t o c a n c e l one a n o th e r and show a s t a b i l i t y o f
incom e f o r b e e t s and d a i r y i n g m ore n e a r l y eq u al th a n , when c o n s id e r in g
v a r i a t i o n s i n p ro d u c t p r i c e s a l o n e .
T a b le XVrI i n d i c a t e s t h e r e l a t i v e income v a r i a t i o n o f t h e d i f f e r e n t
farm o r g a n iz a ti o n s b u d g e te d .
The p r o p o r tio n o f g r o s s farm income
c o n t r i b u t e d by ea c h e n t e r p r i s e i n th e farm o r g a n iz a ti o n i s m u l t i p l i e d
b y th e c o e f f i c i e n t o f v a r i a t i o n o f t h a t e n t e r p r i s e to o b t a i n th e
w e ig h te d p r o p o r tio n o f g r o s s incom e v a r i a t i o n cau sed by e a c h e n t e r ­
p ris e ,
The sum of- t h e i n d i v i d u a l ' w e ig h ts g iv e s th e c o e f f i c i e n t o f
75
T ab le XV.
C o e f f i c i e n t s o f V a r i a t i o n f o r th e Major Farm P ro d u c ts In ­
c lu d e d i n t h e B udgeted O r g a n iz a tio n s , ( a )
B u tte rfa t
(* A M
B eef
(t/c w t)
P ork
( $ /c w t)
2 .2 5
1 .1 0
1 .0 0
0 .5 5
0.31+
0 .3 5
9 .1 5
5.1+2
5 .5 2
Il+. 28
8 .8 2
8 .5 7
1 0 .9 0
1 2 .3 0
1 0 .0 0
1 .6 3
2 .3 2
2 .0 9
0 .6 5
0 .7 2
0 .7 8
1 3 .9 1
1 8 .0 8
2 2 .1 6
1 6 .9 5
2 4 .6 8
2 3 .8 2
2 2 1 .1 3
31.1+6
1 1 .2 6
2 3 7 .9 1
2 9 3 .1 5
Y ear
B e e ts
($ A °n )
1920
1921
1922
O6
•O
1 2 .0 0
6®60
9 .0 8
19U6
19U7
191+8
T o ta ls
Wheat
X (b )
—5
X
7 .6 2 5
1 .0 8 5
0 .3 8 8
8.201+
1 0 .1 0 9
58.1I+I
1 .1 7 7
0 .1 5 1
6 7 .3 0 2
1 0 2 .1 0 4
6Io )
2 .0 8 0
0.1+89
0 .1 5 6
4 .2 0 3
5 .0 0 7
V (d )
0 .2 7 3
0.1+51
0.1+02
0 .5 1 2
0 .4 9 5
( a ) P r ic e s e r i e s o b ta in e d fro m M ontana Farm and Ranch P r ic e s 1 9 0 9 -1 9 ^8 »
op , a i t ,
(b ) A r ith m e tic a v e ra g e o f eac h s e r i e s •
( c ) W hereof—’i s th e s ta n d a r d e r r o r in e a c h o f th e p r ic e s e r i e s ,
(d ) G iven b y V * C T " / X*
g ro s s income v a r i a t i o n f o r th e d i f f e r e n t o r g a n i z a t i o n s .
T h is i s an
a b s t r a c t f i g u r e , b u t i t may b e u s e f u l i n m aking co m p ariso n s betw een
a l t e r n a t i v e o rg a n iz a tio n s ®
A l t e r n a t i v e No, I I , b e e t s and w h e a t, lias a lo w er c o e f f i c i e n t o f
v a r i a t i o n th a n do t h e o t h e r o r g a n iz a ti o n s due t o th e h ig h p r o p o r tio n o f
b e e t a c re a g e .
I f th e w h eat a c r e a g e w ere in c r e a s e d and t h e b e e t a c re a g e
d e c r e a s e d , th e c o e f f i c i e n t w ould be in c r e a s e d b eca u se o f t h e w id e r p r ic e
76
v a r i a t i o n s o f w h e a t.
A l t e r n a t i v e Ho. I h as th e h ig h e s t r e l a t i v e v a r i ­
a b i l i t y , s in c e t h a t o r g a n iz a ti o n p ro d u ces o n ly li v e s t o c k p r o d u c ts .
T a b le XVI.
G ross Income C o e f f i c i e n t o f V a r i a t i o n and Met Income V u ln e r­
a b i l i t y f o r th e D i f f e r e n t O r g a n iz a tio n s B u d g eted .
A lte rn a tiv e s
O r ig in a l
A lte rn a tiv e
Ho. I
A lte rn a tiv e
Ho. I I
A lte rn a tiv e
Ho. I l l
C o e ffic ie n t
of V a ria tio n
(V)
T o ta l E xpenses
G ross Income
(E /I)
V
1 .0 0 - ( e / i )
• 3516
*6397
.9 7 5 9
.U700
.59144
1 .1 5 8 8
.2 9 5 6
.7 6 0 0
1 .2 3 1 7
*W 5
.6 4 9 3
1 .2 5 8 9
I n colum n t h r e e , th e r a t i o o f t o t a l ex p e n se s t o g ro s s incom e i s
shown.
I f t o t a l e x p e n se s a r e l e s s s e n s i t i v e th a n g ro s s income t o
m a rk e t c h a n g e s , t h i s r a t i o w ould be a n im p o r ta n t i n d i c a t o r o f m ark et
v u ln e r a b ility of th e o rg a n iz a tio n s .
Assume p r o v i s i o n a l l y t h a t t o t a l ex p e n se s a r e c o n s ta n t o v er tim e .
Then th e d i f f e r e n c e betw een a v e ra g e g r o s s incom e and t o t a l e x p en ses
o v e r tim e g iv e s th e a v e ra g e n e t fa rm income to be e x p e c te d d u r in g t h a t
tim e .
The c o e f f i c i e n t o f v a r i a t i o n (V) i s th e p e rc e n ta g e by w hich g ro s s
income w i l l f l u c t u a t e ab o u t i t s m ean.
i s .3 5 1 6 .
In th e o r i g i n a l t u d g e t , th e V
T h is means t h a t f o r a g ro s s incom e o f $ 1 .0 0 , th e ra n g e
w ould be t 35 p e r c e n t o f $ 1 .0 0 , ra n g in g fro m $ 0 .6 5 t o $ 1 .3 5 *
W ith
t o t a l e x p e n se s c o n s ta n t a t $ 0 ,6 1 4 . ( 6 I4 p e r c e n t o f g ro s s incom e when t h a t
income i s $ 1 .0 0 ) , n e t farm income f o r t w o - t h i r d s o f t h e o b s e r v a tio n s
77
w ould v a r y b e tw e e n $ 0 ,0 1 and $ 0 ,7 1 (fro m $ 0 ,6 5 - 0,61^ to $ 1 ,3 5 - 0,614.),
I f t o t a l e x p e n s e s w ere c o n s ta n t o v e r ti m e , v a r i a t i o n s i n n e t fa rm income
c o u ld be e s tim a te d i n t h i s m an n er.
ex penses i s u n r e a l is tic *
The a ssu m p tio n o f c o n s ta n t t o t a l
R e la x in g t h e c o n d itio n s to an a s s u m p tio n t h a t
t h e r e w i l l be no s i g n i f i c a n t d i f f e r e n c e i n ex p en se v a r i a t i o n o v e r tim e
among a l t e r n a t i v e o r g a n iz a ti o n s p e r a iits a com parison o f t h e m a rk e t v u l­
n e r a b i l i t y o f n e t fa rm income among th e d i f f e r e n t o r g a n i z a t i o n s .
T his
co m p ariso n i s a c c o m p lish e d by e x p r e s s in g th e c o e f f i c i e n t o f g ro s s farm
incom e v a r i a t i o n i n te rm s o f n e t farm in c o m e ,f o r ea c h o r g a n i z a t i o n .
F ig u re s r e p r e s e n t i n g n e t fa rm incom e v a r i a b i l i t y a r e d e r iv e d b y su b ­
t r a c t i n g th e r a t i o o f n e t incom e t o g r o s s incom e fro m 1 ,0 0 ,
When a l l th e f a c t o r s a f f e c t i n g income a r e c o n s id e r e d , e f f e c t s and
c o u n t e r - e f f e c t s make t h e c h o ic e o f e n t e r p r i s e s a d i f f i c u l t one*
S t a b i l i t y o f y i e l d s may make one o r g a n i z a t i o n more d e s i r a b l e th a n
a l t e r n a t i v e s , y e t p r i c e v a r i a t i o n s may make i t much more h azard o u s*
The
d e c id in g f a c t o r m ig h t th e n b e t h e f i n a n c i a l p o s i t i o n o f t h e o p e r a to r
and h i s a b i l i t y to w ith s ta n d w id e v a r i a t i o n s i n n e t farm in co m e,
As i t t u r n s o u t , sam ple fa rm e rs in th e a r e a o f s tu d y h av e on th e
a v e ra g e c h o se n th e l e a s t v u ln e r a b le ty p e o f o r g a n i z a t i o n .
The o r i g i n a l
0 b u d g e t r e p r e s e n t s a n o r g a n i z a t i o n s y n th e s iz e d a s b e in g t y p i c a l o f th e
s a m p le .
T h is o r g a n i z a t i o n h as th e lo w e s t d e g re e o f v u l n e r a b i l i t y from t h e
s ta n d p o i n t o f n e t farm income v a r i a t i o n s .
Of th e farm o r g a n iz a ti o n s
b u d g e te d , i t w i l l be th e l e a s t s u s c e p t i b l e t o m a rk e t v a r i a t i o n s .
T his
i s th e ty p e o f o r g a n iz a ti o n t h a t i s . commonly lo o k e d upon a s b e in g d iv e r=
s ifie d ,
S e v e r a l e n t e r p r i s e s a r e com bined w ith o u t a m ajo r c ro p o r
78
liv e s to c k s p e c ia lty o
A t t h e o t h e r ex trem e in n e t incom e v u l n e r a b i l i t y t o m a rk e t f l u c ­
tu a tio n s is th e t h i r d a l t e r n a t i v e »
T h is , t o o , i s a d i v e r s i f i e d ty p e
o f o r g a n i z a t i o n , b u t t h e r e i s c o n s id e r a b ly more em p h asis p la c e d upon
a s p e c i a l i z a t i o n i n th e d a i r y . o p e r a t io n .
The h ig h p r ic e v a r i a b i l i t y
o f t h e m eat p r o d u c ts c a u s e s w id e r v a r i a t i o n s i n t h e n e t fa rm income®
The o th e r a l t e r n a t i v e s f a l l betw een th e s e e x tre m e s w i t h A l t e r ­
n a t i v e Ho® I I ( a l l c a s h c r o p s ) b e in g more v u ln e r a b le to m a rk e t
ch an g es th a n th e f i r s t a l t e r n a t i v e ( a l l f o r a g e s and d a i r y i n g ) .
When
com pared w ith t h e seco n d and t h i r d a l t e r n a t i v e s , th e r e l a t i v e l y low er
e x p e n se t o incom e r a t i o o f th e second a l t e r n a t i v e c o u n te r s th e e f f e c t
o f m a rk e t v a r i a b i l i t y o f t h e l i v e s t o c k p r o d u c ts , r e d u c in g i t s r e l a t i v e
incom e v u l n e r a b i l i t y .
Income s t a b i l i t y o f th e t h i r d a l t e r n a t i v e r e ­
s u l t s from th e r e l a t i v e s t a b i l i t y o f th e p r i c e o f s u g a r b e e t s .
This
may be d u e , i n p a r t , t o governm ent a c t i v i t y i n e s t a b l i s h i n g a q u o ta
and t a r i f f on im p o rts o f s u g a r ,
A h ig h e x p en se/in co m e r a t i o c o u n te r s
t h e e f f e c t s o f m a rk e t s t a b i l i t y , i n c r e a s i n g th e v u l n e r a b i l i t y o f t h i s
a l t e r n a t i v e o v e r t h a t o f th e second a l t e r n a t i v e o r g a n i z a t i o n .
79
PART IVo
CONCLUSIONS
The R o le o f I r r i g a t e d P a s tu r e s i n Farm O r g a n iz a tio n s
I n b u d g e tin g and co m p arin g a l t e r n a t i v e farm o r g a n i z a t i o n s , th o s e
w ith t h e h ig h e s t p r o p o r ti o n o f p a s tu r e showed th e h i g h e s t n e t farmincom e, i n d i c a t i n g t h a t t h e p a s tu r e e n t e r p r i s e can com pete w i t h o th e r
c ro p s f o r la n d u se*
H owever, a l i v e s t o c k e n t e r p r i s e m ust b e b u i l t up of
a s i z e w h ich i s a b le to u t i l i z e t h e f o r a g e p ro d u ced b y th e p a s t u r e .
The d e g re e t o w h ich t h e s e e n t e r p r i s e s ( f o r a g e s and l i v e s t o c k ) a r e to be
expanded w i l l be d e te rm in e d , i n p a r t , by ( l ) th e p r i c e o f li v e s t o c k
p ro d u c ts r e l a t i v e t o th e p r o d u c t p r i c e s o f a l t e r n a t i v e e n t e r p r i s e s , and
(2 ) th e v u l n e r a b i l i t y o f t h e o p e r a to r t o p o s s i b le f i n a n c i a l f a i l u r e
due t o a p r i c e d e c l i n e a f t e r h av in g co m m itted h i s c a p i t a l r e s o u r c e s .
'
)
I n o rg a n iz in g th e fa rm , a c o m b in a tio n o f e n t e r p r i s e s in c lu d in g
■
c ro p s h a v in g lo w p r i c e v a r i a t i o n c o e f f i c i e n t s w i l l have a n e f f e c t o f
s t a b i l i z i n g th e n e t fa rm in co m e, b u t , a t t h e same tim e , i t may re d u c e
t h e incom e a v e ra g e o v e r a p e rio d o f s e v e r a l y e a r s .
I f t h e fa rm e r
c a n n o t w ith s ta n d s h a r p d e c r e a s e s i n incom e b e c a u se o f farm indebted™
n e s s o r la c k o f f i n a n c i a l r e s e r v e s , an o r g a n iz a ti o n b u i l t u p a lo n g
t h e l i n e s o f t h e second a l t e r n a t i v e ( a l l c a s h c r o p s ) may be t h e
s a f e s t fro m t h e s ta n d p o i n t o f p r i c e f l u c t u a t i o n s .
I f t h e o p e r a to r i s
a b le t o w ith s ta n d w id e r sw in g s i n p r i c e s o f th e farm p r o d u c ts , he may
ch oose t o o r g a n iz e th e f a r m a lo n g t h e li n e s ' o f t h e f i r s t a l t e r n a t i v e
( a l l f o r a g e s ) , o r some c o m b in a tio n o f c a s h c ro p s and f o r a g e s .
The
l a t t e r i s t h e ty p e o f o r g a n iz a ti o n u s u a l l y fo u n d i n i r r i g a t e d a r e a s »
80
By com bining s e v e r a l e n t e r p r i s e s r a t h e r th a n em p h asizin g a .s in g le e n t e r - '
p r i s e , fa rm e rs a r e a b le to hedge incom e and y i e l d v a r i a t i o n s and a t th e
same tim e to d iv i d e t h e i r c a p i t a l in v e s tm e n ts b etw een c ro p s h a v in g
r e l a t i v e l y h ig h s e a s o n a l ex p e n se s and th o s e h a v in g .lo w e r s e a s o n a l
e x p e n s e s b u t p o s s i b l y o th e r in v e s tm e n ts o f lo n g e r term®
W ith t h e 19i|8“ lt.9 p r i c e r e l a t i o n s h i p s , t h e ' fa rm o r g a n iz a ti o n s w ith
t h e m ost, f o r a g e (an d h en ce th e m ost l i v e s t o c k ) p ro v ed m ost s a t i s f a c t o r y ,
u s in g n e t fa rm incom e a s t h e b a s i s f o r ju d g m e n t.
On t h i s same b a s i s ,
t h e c a s h c ro p a l t e r n a t i v e was t h e l e a s t d e s i r a b l e .
f e l l b etw een t h e s e two e x tre m e s .
O th er a l t e r n a t i v e s
I t i s r e c o g n iz e d t h a t th e s t r u c t u r e
o f fa rm p ro d u c t p r i c e s f a v o r e d li v e s t o c k i n th e s e y e a r s .
T h is i s s t i l l
t r u e ( i n 1 9 5 2 ).
A d ro p i n th e p r i c e o f l i v e s t o c k p r o d u c ts w i l l make th e f o r a g e / l i v e ­
s to c k ' a l t e r n a t i v e s l e s s p r o f i t a b l e th a n p r e v i o u s l y .
Once t h i s ty p e o f
o r g a n i z a t i o n h as b e e n d e v e lo p e d , i t w ould be q u i t e d i f f i c u l t f o r th e
fa rm e r t o " g e t o u t" and d e v e lo p a n a l t e r n a t i v e farm in g s y s te m .
D is ­
p o s in g o f s p e c i a l i z e d d a i r y i n g and f o r a g e e q u ip m e n t, p lo w in g u n d er
f o r a g e s , and p u rc h a s in g s p e c i a l i z e d cash cro p equipm ent w ould r e p r e s e n t
a c o s t b y w h ich e x p e c te d n e t fa rm income fro m c a sh c ro p s m ust exceed
n e t farm incom e fro m th e p r e s e n t o r g a n i z a t i o n i n o r d e r t h a t t h e change
w ill be p ro fita b le .
I m p lic a tio n s f o r I r r i g a t i o n D evelopm ent— P u b lic d ev elo p m en t has
t r a d i t i o n a l l y l e f t a l a r g e amount o f farm d ev elo p m en t w ork t o th e s e t t l e r .
Hampered b y a s m a ll b e g in n in g e q u i t y , t h e o p e r a to r s have u s u a l l y e x p e rie n c e d
81
c o n s id e r a b le d i f f i c u l t y i n c o n tin u in g t h e developm ent o f th e farm u n i t
an d a t t h e same tim e b u i l d i n g up owner e q u i t y .
W ith le n d in g ag en cy
p o l i c y b a s e d upon e q u i t y o f th e o p e r a to r a s c o l l a t e r a l s e c u r i t y f o r
l o a n s , t h e s e t t l e r h a s b e e n f o r c e d t o a p r o d u c tio n program w hich may
h av e b e e n a t a lo w er income l e v e l th a n i f f u l l c r e d i t n eed s w ere
s a tis fie d .
The i m p lic a tio n may b e f o r th e ag e n c y u n d e r ta k in g t h e
d ev elo p m en t o f a n a r e a t o b u d g e t o u t th e b e s t a l t e r n a t i v e farm o r g a n i­
z a t i o n and s e t th e c r e d i t a llo w a n c e s a c c o r d in g ly . • I f t h i s ad d s t o th e
r i s k s o f l e n d in g , c o m p e n sa tio n may b e made by a more c a r e f u l s c r e e n in g
t o d e te rm in e m a n a g e ria l c a p a b i l i t i e s o f p r o s p e c ti v e s e t t l e r s . . T his
may s t i l l n o t be w ith o u t c o m p lic a tio n s , how ever*
In c re a s in g th e
p r o p o r ti o n o f f o r a g e s w i l l re d u c e n e t fa rm incom e d u r in g t h e y e a r o f
e s ta b lis h m e n t and
p o s s i b l y a t a tim e when c u r r e n t income i s m ost im por­
t a n t t o t h e s e t t l e r , m aking him ev en more v u ln e r a b le t o p r i c e f l u c t u ­
a tio n s *
M ethodology
One o f t h e m ain c r i t i c i s m s o f th e b u d g e t m ethod o f o r g a n iz in g t h e
fa rm i s th e f i x i n g o f p r i c e s , y i e l d s , and te c h n iq u e s in a s t a t i c p o s i­
tio n .
b u d g e t.
S h i f t s in an y one o f t h e s e may r e q u i r e th e d raw in g up o f a n o th e r
A llow an ce may be made th r o u g h th e u s e o f th e c o e f f i c i e n t o f
v a r i a t i o n b y ta k in g v a r i a b i l i t y i n t o a c c o u n t when t h e b u d g e t i s s e t u p .
A n o th e r c r i t i c i s m i s t h e l a r g e am ount o f b a s i c d a ta r e q u ir e d *
Con­
s i d e r a b l e tim e m ust b e s p e n t i n a ss e m b lin g and c o m p ilin g t h e d a t a . . T h is
w ould n o t b e so much o f a p ro b lem f o r a fa rm e r a s f o r a r e s e a r c h e r .
The
■
82
fa rm o p e r a t o r w ould h av e more e x a c t knoivledge o f c ro p r e l a t i o n s h i p s on
h i s own fa rm .
Prom e x p e r ie n c e he m ig h t know p r ic e s and y i e l d s w e ll
enough t h a t a g u e ss may be more a c c u r a te th a n co u n ty averages®
I n t h i s s tu d y , i n p u t - o u t p u t r e l a t i o n s h i p s o f fo rag es, and o th e r
c ro p s w ere n o t a v a i l a b l e , an d e s ti m a t e s o f com plem entary e f f e c t s w ere
n o t made e x c e p t t o im p ly w hat ty p e s o f r e s u l t s m ig h t be e x p e c te d when
th e . p a s tu r e e n t e r p r i s e i s in c lu d e d i n th e r o t a t i o n .
U e t. fa rm income
h a s , t h e r e f o r e , been u n d e r e s tim a te d by. th e am ount o f t h e n e t v a lu e o f
c ro p y i e l d s r e s u l t i n g fro m th e com plem entary e f f e c t s o f th e p a s tu r e
e n te rp ris e .
The s u b s t i t u t i o n a n a l y s i s , a s d is c u s s e d i n P a r t 11, n eed n o t b e
c o m p e titiv e w i t h t h e b u d g e t method i n o r g a n iz in g th e fa rm b u s i n e s s .
A
s tu d y o f p ro d u c t s u b s t i t u t i o n r a t e s i s an econom ic s tu d y o f r o t a t i o n
r e l a t i o n s h i p s b etw ee n cro p s and may be u s e d t o a d v a n ta g e i n t h e b u d g et
m ethod d e te rm in in g t h e b a s i s p r o p o r tio n s o f c r o p s , i f th e s u b s t i t u t i o n
•
r a t e s f o r t h e Crops a r e known.
A s u g g e s tio n f o r f u r t h e r s tu d y stem s from th e la c k o f in f o r m a tio n
on th e r a t e s o f p ro d u c t s u b s t i t u t i o n .
Bad t h i s in f o r m a tio n b e e n a v a i l a b l e
f o r th e c a s h cro p s and f o r a g e s in c lu d e d i n th e b u d g e t, e x a c t p r o p o r tio n s
( a t th e p r i c e T e v e l u sed ), o f t h e s e e n t e r p r i s e s c o u ld have b e e n e s t a b l i s h e d
fro m w h ic h t o d e v e lo p th e b u d g e t.
APPEMDIX
APPENDIX A
ANIMAL UNIT CONVERSION TABLE ( a )
One
.E q u als
Cow ( w ith o r w ith o u t p r e -w eaned c a l f )
B u ll
Tw o-year s t e e r o r h e i f e r
O n e-y ear s t e e r o r h e i f e r
C a l f ( a f t e r w ean in g )
Ewe ( w ith o r w ith o u t p re-w ean ed lam b s)
Ram.
Lamb ( a f t e r w ean in g )
Sow ( w ith o r w ith o u t p re-w ean ed p ig s )
B oar
P ig o r S h o a t ( a f t e r w ean in g )
H orse
T w o-year c o l t
O n e -y e a r c o l t
C o lt u n d e r one y e a r
I
I
I
A flUo
it
it
tt
1 /2
i/5
1 /5
1 /1 0
i/^
1 /5
1 /1 0
1
.
1 /2
iA
( a ) C ite d fro m l e c t u r e n o te s i n t h e Farm O r g a n iz a tio n c l a s s o f T. R»
Hodges# D iv is io n o f A g r i c u l t u r a l Econom ics# U n iv e r s it y o f C a li­
f o r n ia # D avis # C a l i f o r n i a , S ep te m b e r, 19ll9 - J a n u a r y , 1950» and
m o d ifie d b y d a t a i n M ontana B u l l e t i n lj.59» r e . # P ro c e d u re f o r Land
R e c l a s s i f i c a t i o n , p . 2 I4.0
it
tt
St
n
it
it
U
It
It
H
It
85
APPENDIX B
E n u m e ra to r
COSTS AND HEHJBNS
ON
IRRIGATED PASTURE
R ecord No. __________ ■ '
C ounty
■
P ro je c t
_____
■
_____
.
D ate
I.
Farm i d e n t i f i c a t i o n
Io
Name
,
______
2.
A d d re ss
5»
R e sid e n c e s
.
on fa rm (
P a ra lo c a tio n s
II.
2.
• 3«
J+o
Ii
Qi S
)
i T
, R
S
, T.
s R
J
T
, R
.
Qi S
j
' Qi S
i T
W ater s u p p ly s
1.
III.
)? i n town (
Do you hav e a s t a b l e w a te r s u p p ly f o r th e e n t i r e p a s tu r e s e a so n s
I f " n o , w h e n d o es th e s h o r ta g e u s u a l l y s t a r t ?
...__________
By w h at p e r c e n t a r e you s h o r t on w a te r ? _______ ______
N a tu r a l h a z a rd s s
T enure an d farm o r g a n iz a ti o n - 1949
S iz e and t e n u r e
T o ta l. A cres
Owned R ented
I r r i e a b l e A cres!
j
Owned R ented
I ■’
T o ta l .
EJay and c ro p la n d
EJangefl perm . p a s t . I
Seeded p a s tu r e
1J
!Dryland A c re s
IOwned R ented
I
____ Z J
86
2»
Hay and c ro p la n d
A c re s
Irrig a te d
G ra in
Hay
T ruck
3»
D ry
|
I
L iv e s to c k
As o f
S o ld i n 19k9
l / l /5 0 I NoT jW eight
|
O th e r
F a llo w
D a iry cows
O th e r
Sows
Ewes
O th e r
P o u ltry
17.«
P a s tu r e management
la Do you have more th a n one i r r i g a t e d p a s tu r e ? _______ ...
2» I f s o , a r e th e y lo c a t e d s id e b y s id e ? _______________ - _______ ■
3« Do you p la n t o seed a d d i t i o n a l p a s t u r e s ?
I4.0 In th e p a s t u r e ( s ) , i s t h e t o p s o i l g r a v e l l y ( ) , san d y (
loam ( ) , c l a y ( )?
5» I s t h e r e a h ard p an l a y e r ? _______________
6c I f s o , how f a r down i s i t ? ___________________
7» What k in d o f fe n c e ?
a . E n c lo s e s la n d i n i r r i g a t e d p a s tu r e ? ________________
bo S e p a r a te s s u b d iv id e d p a s tu r e s ?
'
80 R o ta tio n p la n n e d f o r i r r i g a t e d p a s tu r e la n d s
ao Y ears i n p a s t u r e :______ ______
______ __
be Y ears i n o t h e r c ro p s
' Co O th e r c ro p s
•■
9o- F or how many d ay s do you d e f e r g r a z in g a f t e r i r r i g a t i o n ?
V,
■
),
P a s tu re , e s ta b lis h m e n ts
I , Do you s e l e c t t h e b e s t ( )> w o r s t ( ) , o r a v e ra g e ( ) la n d i n
y o u r farm f o r seed ed p a s tu r e ?
2 0 I f c ro p s p re c e d e d p r e s e n t se e d e d i r r i g a t e d p a s t u r e , w h at cro p s
w ere on th e la n d im m e d ia te ly p re c e d in g t h e s e e d in g ? ___________
87
Ve
P astu re e s ta b lish m e n t (c o n t 'd )
P astu re
No.
D ate o f
Seeding
A cres
M ixture used
Seed per A.
f e r t i l i z e r used
Kind
per A.
Manure
Comm.
Covere I by
(Harr oi” ,
e tc . )
O p eration s
jand p rep a ra tio n
fo r i r r i g a t i o n i
Seed bed p rep a ra tio n :
P la n tin g :
f e r t i l i z e r a p p li­
c a tio n :
Times
o v er
S iz e o f
machine
S iz e o f
cr e w
Hours per
day on
o p era tio n
A p p lied
b e fo r e ( )
or a f t e r
( ) see din g
A cres
per
day
No. o f
days
88
V I.
F ie ld o p era tio n s - 19U9
P a s tu r e Number
2
I
U
3
DITCH CLEANING- & REPAIR
Equipm ent u sed
Hours o f u s e
Man h o u rs
RENOVATING
E quipm ent u se d
Hours o f u s e
Man h o u rs
FERTILIZING (INC. MANURE)
E quipm ent u se d
Hours o f u s e
Man h o u rs
DLIPPING OR HAYING
E quipm ent u se d
Hours o f u s e
Man h o u rs
FENCING (AND REPAIR)
E quipm ent u se d
Hours o f u s e
Man h o u rs
ASSEMBLING, DISMANTLING
SPRINKLERS
E quipm ent u s e d
Hours o f u se
Man h o u rs
lien:
H rs : .
Men:
. . H rs : . . .
Mens
Mens
Hrs« . . . H rs s . . .
Men:
H rs : .
Men:
. . . H rs: . . .
Men:
Mens
H rss . . . H r s s . . .
Men:
Men:
Men s
Mens
Hrs So o • o H r s : . . . . Hrs s . . . H rs : . . .
Mens
Men:
H rs oo o o o H r s : . 0 .
Mens
Mens
H rs: . • . H rs:. . .
Mens
Men:
HrS Se o e o H r s :0 . •
Mens
Hrs s
Men:
H r s :. . 0 0
Men:
Hrs S e e .
% c h a rg e a b le t o p a s tu r e
V II.
F e r t i l i z e r a p p lie d - 19U9
A n a ly sis
N-P-K)
Date a p p l ie d (Mo. & w eek)
Amount p e r a c r e
Dost p e r to n
lfanure: m onth
to n s p e r A
0
0
0
0
0
0
........................
Men:
H rs :. . .
Men:
. . H r
s
«
Men:
H rs s . . «
89
V III.
Pas­
tu re
No.
I
2
I r r ig a t io n s - 19^9
Irri­
g a tio n
No.
1
2
3
b
5
6
I
2
3
U
3
5
6
I
2
3
U
0
k
I
2
3
k
5
6
Mo 0
&
Week
.
.
.
.
.
.
.
. ,
•
.
.
.
.
. ,
.
.
5
6 .
.
.
.
.
•
c
Head o f
w a te r
(seco n d f e e t
or
m in e rs i n .
e tc .)
Method u sed
( f r e e f lo o d in g
b o rd e r d ik e ,
c o n to u r .
e tc .)
O
O
O
O
O
O
•
<
0
e
0
0
0
0
0
C
.
.
.
0
0
0
0
.
e
0
.
0
0
.
0
0
.
0
0
........................
.
0
0
Hours
S ize
w a te r W ater c o s t
of
on
Farm
P a s t . c rev
<
0
0
O
O
O
O
O
O
0
0
b - «
. . .)
I f w a te r i s pumped, g iv e , f o r each p a s t u r e , an e s tim a te o f t h e power c o s ts
f o r t h e I9I4.9 se a s o n s # 1
3 #2
I #3
#4
90
IX.
I.
P a s tu r e p r o d u c tio n - (No. I )
19b 9 p r o d u c t i o n _____________
Type, age
Ju n e
S e p t.
O ct.
May
J u ly
A u g u st
W eights
A p r il
. and
sex c l a s s No. days No. days No. days No. days No. days No. d ay s No. days On o f f
Cows*
S u p p le­
m ental
Feeds
Hay
G ra in
O th er
A ls o , i n 1949: ____ T o f h ay w ere
p u t u p ; ___ pounds o f w ool w ere
p ro d u ced !
* I f d a i r y , g iv e
B reed
A verage w e ig h t
A verage pounds m ilk p ro d u ced
( p e r cow f o r p a s tu r e s e a s o n )
2o
P a s t p ro d u c tio n (c o n t* d )
b . Hay c ro p s ____ T o f hay w ere
h a r v e s te d i n _________
a . P a s tu r e was f i r s t g ra z e d i n
______ , fro m ________________
th ro u g h
, except fo r
p e r io d s a v e ra g in g ____ days
a f t e r each i r r i g a t i o n ,
d © D uring th e f i r s t g r a z in g year
an a v e ra g e o f ___ , ___ , ___
, and ____ p e r montK~were
g ra z e d on th e p a s tu r e .
3»
I f th e p a s tu r e w ere n o t seed ed ,
w h at w ould be i t s c a r r y in g c a ­
p a c i ty ( a s % o f p r e s e n t ) ( a )
w ith w a te r _____________ _______
(b ) w ith o u t w a te r ____________ .
A verage b u t t e r f a t t e s t
A verage pounds b u t t e r f a t p ro ­
duced ____ __________________
2«
P a s t p ro d u c tio n s
a . N urse c ro p s __ _ b u , (o r T)
o f ________w ere h a r v e s te d
in
91
X.
Equipm ent f o r p a s tu r e e s ta b lis h m e n t & f i e l d o p e r a tio n s
No.
De­
Ex­
No. y rs . % tim e
O rig. Year pected p r e c i­ u sed
&
u se d
Item
U n it c o s t b o u g h t l i f e
a tio n
on
on
♦
♦
pasture pasture
♦
C ost
to
p a s tu r e
♦T hese colum ns w i l l be co m p lete d a t t h e o f f i c e «
X I.
E quipm ent f o r i r r i g a t i o n
Item
Ex­
De­
N o ,y rs . % tim e
No.
u se d
O rig. Y ear pected p r e c i­ u se d
&
a
t
i
o
n
U n it c o s t bought l i f e
on
on
♦
♦
pasture pasture
♦
C ost
to
p a s tu r e
G r a v ity :
S p r i n k l e r s :♦♦
Power u n i t
Pump u n i t
Power l i n e e x t e n s i o n
Main pump l i n e
L a t e r a l p ip e l i n e s
S p r in k le r s & r i s e r s
V alve (pump)
Hose
W heels
♦T hese colum ns w i l l be co m p leted a t th e o f f i c e .
♦ ♦ I f b o u g h t a s a u n i t , l i s t i t t h i s way i n th e t a b l e , le a v in g a p p r o p r ia te
v o id s f o r th e e n t r i e s w h ich f o llo w .
92
X II.
Land c o s t
Io
I f la n d i s ow nedg
w o rth I
2o
p e r A»
I f la n d i s r e n t e d s
y ear.
th e t a x p e r a c r e i s $_____ j th e p a s tu r e la n d is
th e r e n t p e r a c r e on p a s tu r e i s $>
per
D e t a i l f o r T able X of L ab o r D i s t r i b u t i o n on 120 A cre C ro p -D airy Farm (a )
E n te r ­
p ris e
APPENDIX C
C u ltu r a l
J a n Feb Mar Apr May Ju n e J u l y Aug S e p t O ct Nov Dec T o ta l
O p e ra tio n
1U0
220
Land Prep=
Uo UO
61
B eets
P la n tin g
TT
B lo c k ,th in ,h o e
760
570 90 100
30 60 90
C u ltiv a tin g
180
36
66 80
Irrig a tin g
200
36
H a rv e s tin g
580
"3%o"
Land P re p .
2$
58
“ S7
P la n t in g
Wheat
us T
“ 53
70
Irrig a tin g
O ats &
150
35
U5
112
H a rv e s tin g
B a rle y
112
"Er
M ain ten an ce
HT
~ IU
28
12
Irrig a tin g
28
28 18
Hay
28
142
H a rv e s tin g
56 55 55
166
l8
8
8
“W " M ain ten an ce
~ 3U
12 12
12
12
P a s tu r e I r r i g a t i n g
8
U
Forage
Land P re p .
27
IU
35
“ 75
18
Es ta b . (c) P la n t in g
6
“ 2%
Land P re p .
8
8
Corn
P la n tin g
2
~2
C u ltiv a tin g
2
3
“ 5
Irrig a tin g
"16
“T ~
U
3
H a rv e s tin g
12
“ 12
F allo w
3
~Z
C a t tle
151 151 181 151 121 91
9l
91 91 l 2 l 151 151 1512
Hogs
Il
Il
18
22
22 21 22 22 23 11
U2
32
257
16
20
16
P o u ltr y
16
28
16
16
16 " 2 6 6
14
IU
IU IU
i/8
178 250 637 # 2
TOTAL
UlU 72U 208 ~ z z r 230 178
515
U751
( a ) S o u rce
_
____
B udget S ta n d a rd s f o r I r r i g a t i o n Farm ing, B ranch o f O p e ra tio n and M ain ten an ce, U n ite d S ta te s
D epartm en t o f th e I n t e r i o r , Bureau of R e c la m a tio n , Region 6 , B i l l i n g s , M ontana.
( b ) P rim a ry d a t a .
( c ) These a r e minimum re q u ire m e n ts p e r y e a r f o r e s ta b lis h m e n t o f p a s tu r e and hay w ith pas­
t u r e i n t h r e e n e a r l y e q u a l p l o t s (5 y e a r r o t a t i o n ) , and hay in two eq u al p l o t s (1+ y e a r
r o ta tio n .)
9k
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■
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