xt7z8w38285j https://exploreuk.uky.edu/dips/xt7z8w38285j/data/mets.xml Kentucky Agricultural Experiment Station. 1952 journals 001a English Lexington : Agricultural Experiment Station, University of Kentucky Contact the Special Collections Research Center for information regarding rights and use of this collection. Kentucky Agricultural Experiment Station Progress report (Kentucky Agricultural Experiment Station) n.1 text Progress report (Kentucky Agricultural Experiment Station) n.1 1952 2014 true xt7z8w38285j section xt7z8w38285j . U
By Glenn L. johnson
Department of Farm Economics
» · V·`·’” A
RAW LAND ? 7La* SEE PAGE IO
1 7
t»e~ *“**’°;t " ef¤ PASTURES _ SEE PAGE 7
,°·. T. ;.; .
‘tY‘ ‘
is * E =~==’
xl __ . _¤%.s.,. yf
;)I; I P G; LIVESTOCK Yfw SEE PAGE 7
i ·f"»”' · “
i; U > ‘ ' _-x I
‘ TY ‘ m¤=•c¤¤¤ _
I MANAGEMENT 21,% SEE PAGE I6
/ ·P~
‘ E LE: I I
E A MACHINERY ? . SEE PAGE I4
.q`A i G=j¤—-»”· ‘ STRAWBERRIES ? 7240 pw 5/
i w LABOR , , . SEE PAGE I2 »
I A [ _*III
__ fr '· L ' ·:,,*.,; VI Il
*2 " ~ PROGRESS REPORT I
KENTUCKY AGRICULTURAL EXPERIMENT STATION ·· UNIVERSITY OF KENTUCKY
LEXINGTON
WHAT THE FIGURES ON GROSS INCOME, HQVESTMENTS, AND EXPENDITURES MEAN
The following discussions will indicate the meaning of the figures secured for each farm
and used as a basis for this report: _
Gross Income includes the sales of crops, livestock, and seeds plus the value of products
used in the hom; plus or minus changes in certain inventories. As both beginning and ending
inventory values were figured at the same prices, gross income does not include changes in
inventory values due to price increases. Further, changes in inventory values due to depre- ,
ciation of machinery and buildings are left out (for the most part) from gross income. Hence,
gross income, as reported here, should be sufficiently large to cover maintenance of the ma-
chinery and building investrnent. Gross income leaves out the rental value of the farm dwelling.
‘a
Land is Measured in Acres Only. The dollar value of land was not used because the value
of land for building sites along the main highways is not related to its income producing ca- ‘
pacity for farm purposes, As Marshall county farm buildings tend to be poorly adapted to the
newer types of agriculture, the value of farm buildings was not included in the study. This ex- '
plains why the rental value of the farm dwelling was left out of gross income.
Labor is Measured in Terms of Months Only. An attempt was made to find out for each farm
the number of man months devoted to or spent on the farm.
Machinery Investment. This figure, designed to measure the total machinery investment
for the farm, is the beginning inventory value of machinery, plus proportional charges for new
machinery purchased during the year, less proportional charges for machinery sold off the farm
during the year. Farmers should expect to earn returns on this investment at least high enough
to cover an interest charge, plus maintenance and/or depreciation charges. I
Breeding Livestock Investment. This figure, designed to measure the investment in livestock
for the year as a whole, is essentially the beginning inventory value of breeding livestock, plus
proportional charges for breeding livestock purchased during the year, less proportional deduc-
tions for breeding livestock sold off the farm during the year. Feeder aninials are treated as
current expense items because, by and large, farmers expect to get back dollar for dollar each .
year for expenditures on feeder animals, whereas they expect to cover only interest on their in-
vestment and depreciation in connection with breeding stock.
Forage Production Investment. This figure is designed to measure the investment in forage
production. It is essentially the replacement value of the hay and pasture stands on the farm,
including the residual values of fertilizer applied in establishing such forage crops, plus invest-
ments in mechanical structures or land clearing necessary in order to establish such forage
crops. An ace of good, well established fescue and ladino was valued at between 35 and 40 dol-
lars--an acre of Jap (Korean lespedeza) in condition to reseed itself was valued at about Z dollars.
Other forage and hay stands were assigned various values. .
Other Expenses. This figure is designed to include all current expenditures on the farm ex-
pec r for dollar returns in a given year except expenditures on hired labor, taxes,
insurance, and maintenance of building and machinery investments. It includes expenditures on ‘
gas and oil used in the tractor and in the automobile (for farm purposes), annual seeds, feeder
stock, feeder stock inventories, miscellaneous supplies, fertilizer nutrients whose values are
consumed in one year, the value of perennial forages plowed down for row crops, custom charg-
es for machinery, breeding fees, etc.
SOURCES OF INCOMES
ON UPLAND MARSHALL COUNTY FARMS
..`_ ‘ ‘· ¢“ * i¢¢ ` ; ,` ` . .· ‘
*’,_ 5 QA ’“?, Q *?`§ `q;i Z rf A , -——. PQ
A AAA AAA_ A A ·A, __,_ A ¤nxA`A9§$_AtA$ %&g;gA¥&A:4A_w§A_ _; , _? AAA A;AAA·_AAAAA_;.; ·1.` » · » _
NA AA Ay A A _ * _ A A A jk l‘r6(2l,.T-·_4m#i¢_AA;é$?.A; ' ani-;:A’—..A-A 3
i, Ai AAAA AAA , V. JA A to @§;{A!AA,A _A A _.
" "* -4° L gg P V; AA
n y i A ; ‘ c 1; E —NN= f
l -. Y >» égA,w. ; ‘ "_r;’ vi Z
. A »»# *»' ; %;,y ,{¥ ;&we;A-,,_.4,A _,__ . , A _ _, A , · A ‘
_ * P - AM ·—· . V O»`C i i
’ FV ` ,·,’ y ` NE'! _.‘» _ 4;
' { -,="U é A’ ,._, V.Qi*’-?*$>i-»€:e;A.QA.iri ` ] AA 1—.J0B_S§ ;A!
.A,, * VLL { y `& ¢'.L TY i ,_ ` A] __ x gji
A. A P =V’ ` A *= “ w “ 3
L A· V ~ , V ,_ ’ _ ymwssuncu- A
· ~_· I A» ,;_ VA JQ 3 ILUNOIS; A .AA,MHAuUR%gAL. A
. · » , ‘· \. *' AA· " 2 A A
NEW . A} ' ·`·~_ ‘ =- ' J »
Rl ’= · " ’ V ` · -» " ·
MARKETS, I . — il Q ,1% ** A. {
it MZTQ I 4·‘”A `\ · °°·~i i
··.. ~ ‘· " in ig ~ A · PM A. _ @_~;.‘=—·¢ A 1;:
gg! {A U f_ 4;; _i R »CA. iii __ ~A · ¤•·¤wA
, T;/V ` — :1 · U A mm A °°‘ *
° **1; % } F " ‘ · ` . a · ·°°“ “* ""”""" ~¤-
"”.», L fg? ` T ” A =' ·.=¢y;a; A ’ A A f` ._ C A KY
;1¢·{_j Avg}; ' A - > J we Q A¤ . 4
k1;;;:·· AA.g$‘A»»‘ ~ . CA. ·:.y;_~_·`¥;A·j$AkAj._(AiA§ _’* yu :··.AA·A`·Agi._ · A, ‘ V l
' A;§ 5 a} ~-y-;7_ZTi:£<;~¤ji~~.%"T=: A ,4 A . J5-·. l
~ ~ . FT 5* .,;.; vA.A “i
W ` ’? ~‘A- A‘ ` A. , U sa F; . _ R ‘
* A-r- gi _ A »i 4 ¤·>¤2;~>-· ._,·‘ ‘ AA
. A Al gf AA ,AV. iw; ,A_AAA, AAAA {1,; A .;·;¤.A—AA » A_ A
V ’ v A - , A q A , » M · A » AA >A A AA »
` »’A"`”FF*‘ A "‘ ` · ` A i - ° "
gf;-Q'}; ,._ ,_, ;};¤ -55 `Y A '.v_·_ _· V ¤\_ .A
_ _ .`—, A · A\ A.»· ;_ ,
‘‘‘ARA J L~ . A· A ~·· · A , A
I,. ,A¢—M ig; ,·,» . V ._ _ _ ·— A j » {
'...,·; - ··· "·M_ ?' ·T—““"-'T »* ·”t’·e~.M;.
. ' iQ " `"*` **-1:. ``.‘ . .. " ‘ *1. . ' T ? 1 ~
t_?L3i£?`>·%·sr;‘ {__ _`i I . ‘ i g `
·· g x}-.; *·"· ~.-waz ~= ¤ s ··».- — ·. i
* - ·· Q .... r ....
»•» p V * Q 2.;.2 7 jogifjggg *‘$`;,,.;y“;,`,‘j`__.,,;x,.,__,,¤ ,.. .-·. ..- ;;Q.»-». -——·-»_____ ·; gv -g.·_· ,
# » . ff r _ #~*;:`f"’ .. _ - ~
"‘Y'¥ "QVW Lf)- »*' - °`€Y·¥.., ¤{Z - _ ?
(Gr if M AJ _`_`
gs `;.< ,,` ‘~E‘“*·’;`» gw $* 3* . , *. * **3 €‘ ° -
* t iw ! ii
AN ADDITIONAL $1,000 INVESTED IN LIVESTOCK AND FORAGE
PRODUCTION ON AN UPLAND FARM HAVING ONLY $1,000 SO IN-
VESTED, WOULD HAVE PROBABLY EARNED OVER 100 PERCEN_T_
IE`1l`EB€¥§TrLl§Ll‘22l·
The study also indicates something concerning the earning power
of larger investinents in livestock and forage production. While the
earning power of investnients in livestock and land developments in
excess of $3,000 was not nearly so great as investments below $3,000,
the returns {or additional investments were still very high. The esti-
8
mates indicate that:
V AN ADDITIONAL INVESTMENT OF $4,000 BEYOND THE USUAL FIGURE
OF $3,000 WOULD HAVE RETURNED AN ADDITIONAL $1,600 PER YEAR,
__ 40 PERCENT NET OF THE ADDITIONAL INVESTMENT, ··
This rate of return appears to be sufficiently high to cover depreciation
on the additional $4,000 invested in forage crops and breeding herds,
_ In expanding pasture production, farmers often face the question of
whether to develop a few acres intensively (say, with a well —fertilized, fes~
cue =·legume mixture) or to develop a larger acreage less intensively (say,
with lespedeza and redtop), Though this study throws little light on this \
_ question, it does indicate that both types of investment are profitable, The
. total. amount of money which could be made, however, was greater with the
intensive pasture programs because greater investments could be made, ‘
I. With forage production so profitable, it seems appropriate to take a
quick look at the general ABC°s of pasture establishment in Marshall county;
A, Make soil tests and apply recommended amounts of fertilizer,
B, Balance plant mixtures to get production, protection against drouth,
and legume nitrogen,
C, Timeliness —- the more drouthy the soil, the more important is
timeliness, Plant matter (humus) reduces drouthiness,
D, If in doubt, see your cpunty agent or soil conservation man,
I FARMERS WHO VIOLATED A AND B , IT WAS OBSERVED, GENERALLY
WASTED EXPENSIVE SEED,
With livestock production necessary to utilize forage, it also seems
appropriate to take a quick look at the ABC’s of fitting livestock to a forage
production program,
A A, Beef production requires relatively little labor; it is therefore adapted to
(I) farms with large acreages of developed forage land;
` (2) small part»time farms, short of labor, with varying _
amounts of developed forage lands,
B, Dairy production requires a relatively large amount of labor; it is
therefore adapted to farms having
(1) fairly large amounts of family labor;
(2) small acreages, ,
9
A separate study conducted at the University of Kentucky indicates that
costs per 100 pounds of milk fall steadily as size of herd and barns are i
increased from 10 to 30 cowsl Other evidence indicatesycosts fall rapidly
as higher producing cows are used, but costs increase rapidly as cows of
given production capacity are fed to higher levels, Artificial breeding is
one way to raise the production of dairy herdsl
In the year ahead (july 1952 vjune l953)$ a large supply of slaughter
l cattle is in prospect The present record number of beef cattle on farms
may continue to increase Beef prices (-including prices of stockers and
feeders) are high in relation to other farm prices; The relationship between ·
beef and other prices may be corrected by a downward movement of beef
prices one of these days, ·
On the other hand, the Purchase area is now a milk~deficit areal Further, l
both the demand for milk per person and the number of persons are increas—— V
ing and are expected to continue to increase in the Purchase areal Theres-
fore the long~-run outlook for milk prices is good,
PROBABLY IT WILL BE LESS RISKY TO OWN DAIRY COWS THAN TO
OWN BEEF ANIMALS IN THE NEXT ONE TO THREE YEARSL,
THE EARNING POWER of Unimproved Land in 1951 `
Another figure used in analyzing the 30 Marshall county farms was the
acreage of land in each farm, Estimates indicate that the earning power of `
raw undeveloped Mar shall county upland was probably low in 1951, The
greage or physical size of Marshalil county farms did not seem to deter
mine their earning power in 1951 Many of the larger farms had low in~
comes while some of the smaller ones had quite respectable incomesl I
]UDGING FROM THE IMPORTANT RELATIONSHIP BETWEEN INCOl\/IE
AND INVESTMENTS IN FORAGE PRODUCTION AND LIVESTOCK, THE
NUI\/[BER OF DEVELOPED ACRES IN THE FARM WAS FAR MORE IMPOR~~
TANT IN DETERMINING GROSS INCONIE THAN THE TOTAL NUMBER OF
ACRES IN THE FARM,
Apparently, acreage or size of farm is unimportant until the farmer con— (
cerned has developed all' the land capable of development on his farm: Very
few of the farrners studied·had developed as much as one·half of their acreage. e
Once a Marshall county farm becomes fully developed, the size of farm
(measured in acres) would limit ability to expand other investments and, hence,
incomes Thus, it is just a matter of time before their small acreages will ·
place a limit on the ability of many Marshall county farmers to make further
profitable investments in livestock and forage production As more and more
farms reach this condition the problems of combining farms and of adding
more land to commercial farms, will become much more important
At that time new renting arrangements will be needed so that commercial
Marshall county farmers can rent and develop land held by persons not inter~
ested in farming themselves F`Ll’ZlTi"€I,llIl€ use of credit facilities for the
purchase of land will need to be expanded as more and more commercial
farmers reach the practical limit in the development of the present land holdings,
10
THE LAND IS THE SAME
. a , ’*`* ‘ i,f¥!
; `
~ . V swf} ;‘·*}.5 ~·~,..·
‘·" " ` _ \
—L ` o » —¤
· .' r'i' (···'· , * =f "I
A ..¤·< * .b · V ,- .g~_, gl , _ I _ ' Q ` 5 · ,
__ l ";‘ ` \ __ i f A —_ .; ’V·< '
Q. ! *:4- T%_,:, fltqjfz-. r` I, v•‘ 4 V . " I lh · ‘· `_.. ·‘ _ ‘ l i· T
yu 5; A , t
g i- i°-,·‘i ‘‘·· ki "J < J ‘ i
_ ,..; ,r . ,(_,_ ,;, ""';{;‘4»;j¤f., l A V»_q ¢._,-Yew; A ;‘_y,.»4.__sj W; »- ,_ A-
'. 1 '. { iiigri ;#_·sQj` "\f _,_A —
‘i i { i ‘ , ' ·,` Hi" ,,·' ’.,· .s -· J" .;i *.1 M
THE DIFFERENCE IS IN THE INVESTMENT
The low earning power of raw land (in 1951) is not out of line with
the prices being asked and paid for Marshall county land as those pric-
es are often based on (I) heavy investments in forage production and
(Z) the use of land for building lots either for businesses or residences.
The low earning power of unimproved land, however, does tell us that
` farmers should be particularly careful in buying land for farming pur-
poses. Land purchases have often proven profitable from residential
and speculative standpoints. Further, rnoney could be made by putting
forage and fertilizer investments on Marshall county land in l9‘iTMTm
Neither of these two incomes are earned by the raw land; hence, neither
should influence what is paid for raw land_E?FAT1?}/IF\TCY'il’Ul{P<.)STYS.l—T_
The problem is—one ofqot paytgfg _r1T6re_forT¢Taw land fo?fa—1TnTin»gTi§—
poses than it is worth so used. Improved lahiinis one thing——raw land
is another. The profitability of seed and fertilizer investments should
not be confused with raw land value. Also, residential or nonfarrning
values are too high to be supported from farming uses mentioned a-
bove-—farming is not that profitable. In order to avoid paying more
for land than it is worth for farming purposes, land best suited for
° residential or nonfarming businesses should be so used. Often that
portion of the farm having high residential or business value could be —
Sold off and the money reinvested in (1) land equally good for farrriing
pu1‘p0S€S or (Z) in livestock and forage production on the reinaining
land. Another method is to use land for two purposes, i.e. it can he
farmed while being held for gains in value due to residential and busi-
ness developments.
1 l
THE EARNING POWER of labor in 1951
The earning power of labor was low on upland Marshall county farms
when used with the investments in machineryi, livestock.) land development,
and expenditures common among the farms studiesi, Labor earned about F
$58.,00 during the last month (the ninth) it was employed on the ‘“typical°‘ ‘ _
farm studied, This low figure compares unfavorably with wage rates inboth
nearby and distant industriest Even among the "better than average" farms
included in this survey, too much labor was used in connection with the ·
· relatively small investments in livestock and forage production and other
expendituresu ·
Dairy farmers in the states of Wisconsin, Minnesota, and Michiganhave
completed for years with nearby industries for labor at a much lower rel—» ,
ative price for milk than is now received by Purchase farmers;. Similarly,
Marshall county farms could have been organized in 1951 to secure labor
earnings which would compare much more favorably with industrial em~ ~‘
ploymentn In most cases, such reorganizations would have involved devel~·
opment of first class pastures on the available unimproved land for each
farm plus the addition and development of more land plus the addition of V
livestock, g-
THE STUDY INDICATES THAT HAD THE USUAL INVESTMENT IN
LIVESTOCK AND FORAGE PRODUCTION BEEN TRIPLED IN l951,,OTHER
INVESTIVIENTS AND INPUTS BEING UNCHANGED, THE EARNING POWER
· OF 12. MONTHS LABOR WOULD HAVE BEEN INCREASED FROM $45.,00
TO AROUND $75..00 PER MONTH?
Such an increase in livestock and forage investment would make an in»
crease in other expenditures advisable and profitable., _
A TRIPLING OF THE LIVESTOCK AND FORAGE INVESTMENT PLUS
A TRIPLING OF OTHER EXPENDITURES WOULD INCREASE THE EARN·
ING POWER OF TWELVE MONTHS LABOR FROM $4-5r,00 TO $90.,00 PER
MONTH;
Had the usual land acreage been increased 50 percent thereby permi.t—»
ting livestock and forage investments (seeds and fertilizers) and other ex——
penditures to be increased by five ti.mes, THE EARNING POWER OF
TWELVE MONTHS LABOR WOULD HAVE BEEN INCREASED FROM- $45,00
TO @11+00 PER MONTH.
It should be made cle ar that a farmer whose labor alone was earning `
over $100 a month would have been receiving a large gross income as a
result of his investments. One such. farmer among those studied grossed
over $12,000 and had a net income much higher than earned by factory wor»
kers.
The estimates; while subjectto many shortcomings, makes it clear that
the problem of getting more out of labor on upland Marshall county farms
is really;
12
(1) APROBLEM OF MAKING ADDITIONAL INVESTMENTS AND
EXPENDITURES IN OTHER PARTS OF THE FARM BUSINESS
. SO AS TO USE LABOR EFFICIENTLY, AND
zi (Z) A PROBLEM OF USING LESS LABOR, SOMETIMES IN TOTAL
AND, AT OTHER TIIVIES, IN RELATION TO OTHER INPUTS.
. LABOR CHART — Showing Earnings per Month
200
With Usual
_` Investments and Inputs
{ .C
E |5O .,6 With $ 3,000
O °•°6 -
E :,3 More in
_ ‘ »:•} Forage and
|•·
’ g tj.; Livestock _
[{4 With $ 3,000
.3 IOO More in
E ‘ Machinery
LZ $:2
. ,, »:•§ ` 5:;
.. >••; ,•••
E F? •2•I
-5 °:°: :°:° ·•·
¤ 5 o ¥•¢‘ ·Z•2 FZ?
•{·Z ’•°• M ·.-»
•.•. ’•°• M W
•• °•°• *! ’°‘ ‘•‘•
,:4 •••‘ :,3 ,:•: »•• ·
{zi: Eff; :§:§ izii
·:·: :·:• ¥:¤: :¥:¤ :·:
O {$:2 PS3! Z•Z• •Z•Z ¢?
V 3rd 6th gfh Izih |5Ih
Months of Labor Used
THE RATE EARNED PER MONTH OF LABOR USED DECREASED
· WITH THE AMOUNT OF LABOR USED.
THE RATE EARNED PER MONTH OF LABOR USED INCREASED .
WITH INVESTMENTS IN EITHER MACHINERY OR IN LIVESTOCK AND
FORAGE PRODUCTION.
Investments in livestock and forage production were more effective
in raising labor earnings than investments in macliinery. Machinery
saves labor; livestock and forage investments give labor Bioducgve
things to do. —
A 13
IT WAS MORE IMPORTANT TO MAKE INVESTMENTS TO INCREASE
THE PRODUCTIVITY OF LABOR THAN TO MAKE LABOR SAVING INVEST~
MENTS IN MACHINERY IN MARSHALL COUNTY IN 1951D
Labor earnings depend on the amount of labor used and upon what it has
to work witht Ordinarily, the less labor used? the higher the monthly rate
earnedr This was true on Marshall county farms (see the labor charty page
i 13). The bars on the chart show the monthly earnings of different amounts of
labor. The black bars show the usual amounts earned with the average in~
vestments in equipmenty livestock, and forage common among the farms *
studied.
When the investment in livestock and forage production was doubled, the _ I
monthly rates earned increased to the amounts shown by the white bars in the
chartsi, A similar increase in the machinery investment had a much smaller
effect on the earning power of labor as shown by the grey bars in the labor
chart,
It should not be forgotten that a tractor outfit might reduce labor require—
ments from 15 to, say_ 9 months in addition to increasing the earning power
of 15 months labort For this reason it might be advisable to compare the I
grey bar for 9 months labor with. the black bar for 15 monthst '
EARNING POWER of Machinery Investments in 1951
With the investments in l