The advocate., 1897-11-17

Cost of Raising Wheat on a Bonanza Farm
Accepting the cost of operating boz
nanza wheat farm at S5.7O an acre, and
accepting the. average selling price Of
the wheat at 55 cents a bushel on an
average yield of nineteen bushels to the
acre, one finds that the product OF an
acre is $1O.45. This would seem to leave
net profit to the capitalist who main
tains the field Of about SAFE an acre.
From this gross sum there must be sub
fractions. The matter of interest must
| be considered. The returns from the
years business do not come in until the
! farm has been operated practically a
year. 1t Is not uncommon to hold the
product for six months or year after
! 1t has been harvested, waiting for a
profitable market. Eighteen months Is
about the time that may be said to elapse
between the first plOwlng and the re-
turn of the cash for the crop. Eight per
cent. is not an eXOrbitant rate for money
in North Dakota. This per cent. should
be charged for the operation expenses Of
the farm-that is, upon $5.7O for each
acre. The interest, therefore, on the
operating expenses would be As cents per
acre. The final subtraction from this
gross profit must be made in the form
Of interest on the capital invested in
the farm. Accepting the estimated value
Of the land, improvements and machin-
cry to be $50 per acre, and cOnceding
that for u sound investment per cent.
would be fair interest return to capital,
one comes to the real profit, which Is
not such an exorbitant profit after all.
Subtracting from $4.75, the gross profits,
45 cents the interest on the operating
expenses, and $1.S0 the interest on the
capital invested, the real profits dwindle
to $3.50, or less than per cent. profit
on the capital invested in land, improve
ments, and all operating expenses. Fig
uring the items Of interest with the
prohts-making the result gross profit
the rate of profit is about doubled.
Thus the balance sheet stands with
the successful operators. Upon scores
and scores of farms this balance Is writ
ten in red ink. It represents assess
ments--not profits. The value Of the
wheat in the territory tributary to
Fargo, N. D.-where the big farms are
| found-Was estimated at $25, 100000 this
year. The nearly $3,0O0,000 worth of
machinery sold at Fargo this year does
not include the machinery left over from
last years purchase. 1t Is new machin-
cry. Probably if one could know the
amount Of capital invested in bonanza
farming in the valley of the Red River
OF the North the profit in this $25, ,0O0, 900
worth of wheat would shrink far below
the profits which accrue to the few sue
sessful farmers in the valley. And if one
were to include in his estimate Of profit
and loss the possibility Of a soil giving
out in half score of years, after gen
Grafton of wheat growing, the balance
sheet, even for the best-paying farms,
might need changing. Perhaps every
business Is conducted under some such
dread possibility. The wheat farmer Of
to-day in the rich Red River valley does
not seem to be disturbed by thoughts
about the failure Of the soil. With him
sufficient unto the day is the evil thereof,
and so long as crops continue fair he
does not borrow trouble. He is much
more interested in the shortage of the
wheat crop abroad and in the steady
rise in the price of wheat than he is in
the future failure of soil which for
twenty years has shown no shadow of
turning. William Allen White, in
Scribners Magazine for November,