Warren sheaf. [volume] (Warren, Marshall County, Minn.) 1880-current, 1915-06-23
A:E.L ALTON OF SIZE OF BUSINESS
Tt HE FARMERS INCOME.

A careful study by Government ex-
pets in regard to the profits Mas
by (. large number Of fars,-rs ii DIFF
f. III PARTS of the United States
SHOWS that the size of the farm bus
mess is one Of the most Important
factors controlling the farmers in
come. The problem of how large an
Investment is needed in order to carry
on certain type Of farming to adj
vantage is of the utmost Importance.
The amount of this investment will
vary according to the type of farming
and to the region selected.
In survey of over 100 farms in an
irrigated district in Utah only three
owners, with less than $4,000 total
capital, received labor income of
more than $1,000 for their .year'c
work.
By labor income in this case is
meant what remains of the net in
come after deducting per cent for
invested capital and working capital;
in other words, what the farmer him.
self gets for his years work and SUI
pervision. .s
In a group of IS of these men, who
had small farms and an average cap
ital of $5,345, the average labor in
come was $685.. One out of every
five received nothing for his labor and
made less than 5 per cent interest on
his farm investment. With high
priced land this amount of capital
gave him too small an area to utilize
to advantage. If land were cheaper,
so that much larger area could be
obtained with this same amount of
money, then $4,000 might be suf-
fcient investment to give the farmer
substantial income.
In the Central States, where corn,
wheat, and oats are prevailing crops
and where land is from $3.50 to $3.50
an acre, $4,000 would be entirely too
! small an investment to yield the own
err good income for the reason that
40 so acres the total amount of
land he could possibly buy with this
amount of money-would not utilize
his teams, machinery, or labor to the
fullest advantage. ....
On the other hand, as big number
of acres is not always true measure,
as big business can be conducted on
a small area; 20 acres Of truck and
small fruits may equal a 200-acre
farm devoted to grain, hay, cattle and
hogs. It is the type of farming that
determines the number Of acres nee
essary for efficient operation. Many
persons have made the mistake of
buying too high priced land for. sue
cessful general farming. In other
words, they paid truck-farming prices
for land which, on account Of market
relations, should be used for only
grain and general farming
The proportion Of the invest
ment that should be used as working
capital is equally as important as size
of investment. Generally speaking,
about IS to SO per cent of the farm
er's investment is in real estate, the
other II to Is per cent being in live
stock and other equipment. This pro-
portion will vary according to the
type of farming followed. in regions
where dairying is the main enterprise
the amount of working capital may
represent one-fourth of the entire
investment.
A third point in the consideration
of the farmers investment is the
quality of material in which working
capital is invested. This is especially
true in regard to live stock. Invest
igations relating to profits in farming
show conclusively that the efficiency
| IF the animals to which the crops are
fed is one Of the most important fac
tors IN determining the farmers net in
come This country the bulk of the
crops is in reality sold to the dairy
herd or to producing animals.
If these are of such poor quality that
they yield low returns for their feed,
the income to the farmer must be cor
respondingIy small. Hence, no matter
how large the total investment, if the
quality Of the euuipment. is deficient
| financial failure is inevitable.
| Havo Won com of 4 ~ eo11 Y1o<