xt79zw18n33j https://exploreuk.uky.edu/dips/xt79zw18n33j/data/mets.xml Kentucky Agricultural Experiment Station. 1926 journals kaes_circulars_203 English Lexington : The Service, 1913-1958. Contact the Special Collections Research Center for information regarding rights and use of this collection. Kentucky Agricultural Experiment Station Circular (Kentucky Agricultural Experiment Station) n. 203 text Circular (Kentucky Agricultural Experiment Station) n. 203 1926 2014 true xt79zw18n33j section xt79zw18n33j COLLEGE OF AGRICULTURE
A Extension Division
THOMAS P. COOPER, Dean and Director.
CIRCULAR NO. 203
A CONTROL OF FARM EXPENSES
A Lexington, Ky.
December, 1926.
Published in connection with the agricultural extension work carried I
_ UD by cooperation of the College of Agriculture, University of Kentucky,
_ with the U. S. Department of Agriculture and distributed in furthemnce
. of the work provided for in Act of Congress of May 8, 1914.
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CIRCULAR NO. 203
Control of Farm Expenses
g,j_ By w. D. NICHOLLS
Studies made by the Department of Farm Economics of the “
T College of Agriculturelt in recent years on several hundred farms
located in various sections of Kentucky, indicate that farm
profits depend largely upon the control of farin expenses. This
has been particularly true during the period of declining prices
following the war-time price inflation, when prices of most of
» the products which farmers sold declined more than did prices
of the things they bought. Economy of operation and control .
¥ of expenses have in consequence increased greatly in importance.
INCREASING FARM PROFITS ABOVE THE AVERAGE
That there is considerable margin by which efficient farmers
i increase their profits above the average is shown by the figures
· presented in Table 1 which contrasts the yearly net earnings of I
The most successful farmers in several localities, with the earn- ‘
Q ings of the average farmer in the same localities. . '
ii TABLE 1.—Profits of Successful Farmers in Various Sections of Ken-
~ tucky Contrasted with Average Farmers in the Same Localities. `
l _ Average
No. l . _ i A}""{‘g€ or Most ·
Farms ~ Lecem Yer T early I successful
· l [ Eainings F
· €lI’lllS
‘ l I l
, 162 lShelby, Spencer, Oldham [ [
[ and Hardin Cos. 1915 $799 [ $2,919
·} SO [Kenton C0. 1916 871 1,866
—. 241 [Mason and Fleming Cos. | 1922 [ 1,029 | 3,203
F 270 [Union and Henderson Cos. 1924 [ 465 [ 3,058
— 115 ["Juckson Purchase" [ [
— , Region 1922 [ -113** [ 638
·_ S4 lLarue Co. [ 1922 [ 332 [ 1,371
—L;_;_l___I__;é.. ‘
i" B "Tllc cost of production studies were carried on in cooperation with thc
- lllxgl ¤fAsr¤cu1un·aI Economics of the U. S. Department of Agriculture.
U ' OSS.
l
4 Kentucky Exteiistoii, C'i2·0uZm· N0. 203 .
E
In Mason and Fleming Counties in 1922 the average farm TA
in a total of 241 farms had $52.00 of expenses per $100.00 re. ;» ..
ceipts, while the most profitable twelve farms had $42.00 of ex.
penses per $100.00 receiptsfli In Larue County in 1922 the
average expenses per $100.00 receipts on 80 farms were $49,00
and for the most profitable farms $38.00. In Union and Hem.
derson Counties in 1924 the expenses per $100.00 of receipts .»
were $54.00 for an average of 270 farms and $33.00 for the most [ Mee
profitable 12 farms. These comparative figures are presented Um,
in Table 2. E;
TABLE 2.—Comparison of Nlost Profitable and Average Farms in I, _
Control of Expenses. diii
3 {lili
, Most ‘· Y A
Expenses Per $100 Receipts* Average I Profitable -_ lie]
` I Farms Of
rr I I y as
Mason and Fleming Counties (1922) I $52 I $42 ; ,
Larue County (1922) I 49 I 38 { Ol
Union and Henderson Counties (1924) I 54 I 33 .~ I-Sq
Z
—f—— I _ ha;
‘*l~Yxpenses include current expenses, the value of unpaid family labor, g .
and d·;crc~nses in inventories. They do not include the value of the 011- j (iu]
eraior's labor, or interest on the capital invested in the farm business. _
Receipts include farm sales and increases in inventories. V PIC
_ of
— art
VARIATION IN THE ACCOMPLISHMENT OF LABOR ON 2 in
DIFFERENT FARMS l
»_ in
Studies of the variation in labor accomplishment made on F _
241 farms in Mason and Fleming Counties in 1923, 84 farms in 2
Laruc County in 1923, and on 270 farms in Union and Ilendcr- Q. —
son Counties in 1924, indicated a wide difference in the labor {
accomplished per man in twelve months. In the first area 258
productive days work per man were accomplished on the most {
profitable farms as against 203 days on the average farm; in the
‘ ,, - second area 264 days work per man against 218 for the average Z
¤ . . _ ` (
farm; and in the third area 273 days work as against 236 days ·; rp
for the average farm. (See Table 3.) °°
. Q
»
; Control of Farm Expenses 5
E
TABLE 3.-Comparison of Work Accomplished Per Man in Various
;·‘l· Sections of Kentucky
g. ___, ..-;_.T_?——
Q ,·‘— Productive Days \Vork Ac-
complished Per Man in
Twelve Months
Locality T "" rr 7‘?'”"*‘”‘
23; On l On Most
2. Average ` Successful
Farm ~ Farms .
I l
,- Mason and Fleming Counties, 241 l |
It farms, 1922 203 l 253
,j Union and Henderson Counties, 270 |
tarms, 1924 j zig { 264
Larue County, S4 l 273
‘ The marked variation in the accomplishment of labor on
different farms is further exemplified in Table 4 which presents
r data obtained on farms in Christian County. Some farmers -
were able to produce corn with an average expenditure in labor i
of one-half hour per bushel, while others expended three times
,l as much per bushel. Some produced wheat with an average use
of three-quarters of an hour of labor to the bushel while others
? required an hour and three-quarters per bushel. Some produced
_ hay by the use of only eight hours to the ton while others re- f
¤ quired more than twice that length of time. Some were able to
1 . l
produce 1,000 pounds of tobacco by using less than 300 hours ·
_ of labor while others used over 400 hours. Differences in yields
— are the most important single cause of these marked differences `
`._ in labor expended per unit of product. Other causes are noted
Y_ in the later pages of this circular.
A- TABLE 4.—Comparison of Labor Accomplishment of Producers of
V Farm Crops in Christian County, Kentucky, 1922-23.
2 Time Required to Produce a Unit
of Product
° Kind of Crop By By Most By Least
2 Average Efficient Efficient
Producer Producer Producer
_L Hours Hours Hours
, COYH. Der bushel i .66 .5 i 1.47 i
' Tobacco. per 1000 pounds \ 336 280 [ 422
`° Whcab Dc? bushel 1,1 .74 \ 1.74
* H.aY» vcr wu i 11.2 7.9 { 17.7
6 Kentucky Extension Circular N0. .203 -?‘
`·»
EFFECT OF YIELDS ON COSTS
The cost of cultivation of an acre of thin land is nearly as I cost
great as that of an acre of productive land, but the cost pep studi
bushel usually is considerably less on the productive land. The figuri
effect of yield on cost is well illustrated in Table 5 which shows The 1
the results from cost records kept on the wheat crop on 19 farms penn
in Western Kentucky in 1925. The average cost was $18.10 cents
per acre, the average yield 14.8 bushels per acre and the cost per 11.8
bushel $1.22. The average cost per acre on the 5 farms having i poun
the lowest yield was $15.41, and the yield of 8 bushels per acre poun
gave an average cost of $1.93 per bushel. The average cost per high
acre on the 1'ive farms having the highest yield was $21.26, and than
the average yield was 23.2 bushels per acre, the average cost 92 fort
cents per bushel. low-1
The ditlerence in yields was one of the most important
causes of the wide variation in the costs of the two groups. ` TAP"
TABLE 5.—Effect of Yield on Cost of Producing Wheat in Western {
Kentucky in 1925. `
(Acre Basis)
_n;.,_n+__;_ ’ Total
FNB F`211‘mS Having 1Five Farms Having V, Yivld
Highest Yields Leu,-est views Cost
Items of Cost ·—é47··————— ~ Il;Y{€€
_ _ , 1‘l ‘
Quantity 1 1 Quantity _ PN;
______ ; Pl`0ll
1 I I Z .
Man labor 17.4 hrs. 1 $3.04 11.8 hrs. 1 $2.06 g
Horse work 23.0 hrs. 1 2.301 20.4 hrs. 1 2.04 *‘.
Machinery (except for 1 1 Q
threshing) 1 1 1.50 1 1.50 `.
Seed 1.4 bu. 1 2.251 1.1 bu. 1 1.76
Fertilizer 198.0 lbs. 1 2.19 158 lbs. 1 1.73 i item
Twine 2.5 lbs. 1 .45 .75 lbs. 1 .14 1
Contract threshing (ma- 1 1 1 Q OW
chine work) 1 2731 1 .96 y worj
Interest and taxes on land 1 5.001 | 4.01) . 1
Miscellaneous costs 1 1 1,751 1 1.25 `_ JON
’—w1 l··’ —
. T til '2l.2` ‘1'.4l ·
`V 0 I 1 1 1 D1 1 1 J 1 Sm
Ylcld of grain, bushels 23_2 1 1 8.0 ; gm
Cost per bushel 1 $150521 1 $1.93 K;
1 .1 C{lI'(
I :7
L. `;
Conirot of Farm Expenses 7
An equally striking illustration of the eitect of yields on
cost of production is afforded by figures from the Kentucky
iii studies on the cost of producing tobacco. Table 6 presents
figures from this study for the year 1922, including 97 far-u~is_
ii The ten highest-proiit producers made a profit of 24.5 cents per
pound; the ten loivest—profit producers incurred a loss or :;.4 _
lj? cents per pound. The cost to the high-pr•t producers was
it 11,8 cents per pound; to the low-profit producers 22.3 cents per
1i pound. The high-profit producers secured a yield of 1,387
... pounds per acre; the low-profit producers, 874 pounds. The
high-profit producers obtained a much higher quality of product
’ than the low-protit producers, and received 36.3 cents per pound
for their tobacco as against 18.9 cents per pound received by the
low-profit producers. `
TABLE 6.--Comparison of Yield and Quality of Tobacco on Profitable
.*` and Unprofitable Farms.
_. (Burley District, 1922)
{ 'On Ten Highesti On Ten Lowest
.. Profit Farms 1 Proht Farms _
V
i_ Total cost of production per acre [ $163.60 i $194.74 ,
J Yield per acre, pounds 1,387 | 874 ·
{ Cost per pound 11.Sc l 22.3c
. 3 Price received per acre $503.31 ] $165.29
Price received per pound 36.3c | 18.9c `
— Proht or loss per acre $339.71 | $29.451oss
5 Proiit or loss per pound 4 25.5c | 3.4c loss
a i _ '—‘ i
i i THE COST OF HORSE WORK
i The expense of maintaining work stock is a considerable
i item of farm cost. On many farms it is a contributing CHUSQ of
I low prodts. Farmers may materially reduce the cost of horse
3 work by securing the maximum amount of productive work per
5 = ilOI‘SO and by reducing the carrying costs on work horses.
I l The maximum amount of productive work per horse is _
secured mainly (1) by having a cropping system which provides
3 UH GVGH distribution of horse work thruout the year, (2) by
_ Cflwfully planning and scheduling all the farm work so that
in
8 Kentucky Eactensioin Circular N0. 203
odd jobs are done when Held WO1`k cannot be done, and time is gi EXAM,
not lost from field work because of the necessity of stopping the Y
teams to do work which should have been done when the field A
work could not be done, (3) by the production of live stock which furnis
serves to furnish profitable work for teams in slack seasons, (4) ing in
by a convenient layout of farm buildings and fields. ~_'· illnstr
The cost of keeping work stock can be further reduced bya the p
study of economies in feeding, such as turning the stock out on tj operai
pasture and feeding lightly when not at hard work, carrying prime
them thru the late tall and winter cheaply on such roughage as pastui
sorghum or corn fodder, and a little grain, thus saving high- plann
priced grain and hay for the time when the teams are doing icllilci
hard work such as breaking land and cultivating crops. 2 fields
The yearly carrying charge on work stock can be redueel ll1iS lfl
to a considerable extent by the avoidance of depreciation. Young the la
work stock usually are started to work on farms as three-year. 'A }'i0l