American Falls press. [volume] (American Falls, Idaho) 1907-1937, 1915-09-02
THE MEASURE OF sxrY-FIvE FARMS

THE MEASURE OF SIxTY-FIVE FARMS
NanpIe Method Of Telling Whether Your Farm Is
Paying According to Government Standards.
Every community has It's so-caiied successful
fhrmers-success being measured by the accumu-
iaton Of acres or the piing up Of bank accounts.
But the real test Of success was never realized
until there was evolved a system Of studying the
mrmers business and a basis for comparing pro-
fits established. The ~yardstick by which a farm
er's success is measured, which is now used by
the Federal Office of Farm Management in its
surveys. in labor income. which is obtained by
subtractihg the total expenses and the interest on
the average Investment from the total receipts.
In addition to his labor income the farm operator
has a house in which to live and such products
~ the farm contributes toward the family's living.
The experts point out that the farm operator
must earn five per cent clear OF total expenses
before he can demonstrate his ability as a busi-
ness farmer.
The writer has known Joseph Himelick, Of Madi-
son county, Indiana. for a number OF years and has
studied his farming methods with interest. but 1t
was only when the acknowledgement survey was
taken in Madison county that the true merit OF
Himelick's ability was brought out. The average
labor income Of sixty-four farms In Himelick's
township, shown by a survey in 1913. was 1915.
Hts labor income was $281b.
When the field record was tabulated and a sum
mary Of tho years business on the Himelick farm
was returned the total average investment for
1918 was shown to be $50, 99s, rs follows: Real
estate, 263 acres at SITS an acre, $46,o2b; cattle
S239s; horses, $1,000; hogs, $1095; poultry, $16l;
machinery, $1,000; hay and grain. $205o; cash, $500.
The total receipts for the year were $7549. and
the total expenses we're $2035, leaving an income
for the capital and operators labor OF $5b14. NC
cording to the common way of looking at a bust
ness venture this was a return OF a little more
than ten per cent on the Investment.
The demonstrators look at the farming business
from a different angle. They snow the operator
that his average total Investment has an earning
mower of five per cent, which In this case would
be 5000. Deducting this from the income on
capital and operators labor WI have $2815 as a
labor income. In other words, Himelicks manag-
ing ability for this particular year was worth a
little more than five per cent on his total average
capitalization.
The items that loom up biggest IN the summary
of receipts for the year are $43O1 from hogs;
1888 from cattle sales; $500 from poultry and eggs,
1852 from wheat; s400 from miscellaneous sources.
and 1884 from cream. Himelick's hogs have ac-
cess to good pasture. mostly clover and he gets
them off at an early age when they weigh round
ESQ pounds. He has been n cattle feeder of the
old school, roughing cattle through the winter on
clover hay, straw and corn stover. and fattening
them on grass and corn. with n silo he believes
he Ia on the road to greater profits.
Az fascinating as the itemized summary OF the
years business may be to the student OF farm
management, the reverse side of the sheet, known
by the demonstrators as the factor sheet" Is the
most interesting. From the summaries OF the rec
ords taken and tabulated for comparison It was
found that the conditions, or factors, which deter
mine the profits on Madison county farms are:
First. size of business; second, amount of live
stock: third. quality of business. The reasons
then. we may surmise, for Himelick's success.
were his large business of good quality aud his
good livestock.
Each man whose farm Ia surveyed has returned
to Kim a summary OF his years business, with a
comparison OF his farm In the different factors
that make for profits In his community. The
farms are compared first as to size OF business,
which includes total farm area, acres In crops.
animal units to the farm and total receipts. Dt-
vsrs..y Of business :s also compared, showing the
shares OF receipts from crops, from livestock and
from miscellaneous sources. such as work on the
road and other outside work.