Imperial Valley press., 1919-10-28
COSTS FOR ALFALFA
PRODUCTION SHOULD
DETERMINE PRICE

Note-The following has been receiv-
ed from the publicity department Of
the alfalfa growers association and is
published at their request.
The activity of the ALFALFA
GROWERS Or CALIFORNIA, a coop
erative marketing association handling
alfalfa and milo maize for its members,
has caused much discussion in regard TO
the cost of producing a ton OF milo
maize in the Valley.
1t is the contention of the association,
and apparently without any reasonable
argument against it, that the sale price
of milo maize, that is to say, the price
which the producer shall get for his
crop should be based on the cost of
producing it. The contention is rightly
made that the producer is essentially a
manufacturer. The milo maize is his
factory product and he must sell it at
la profit or eventually be ruined. The
factors entering into the cost Of any
farm product are, interest on the
market value of the land used; taxes or
the land; interest on the investment in
! tools, equipment, stock, etc. plus Il reas-
enable allowance for depreciation or re-
| pla cements; seed; water: water assess
ments; labor hired and labor given by
the owner or his family; harvesting;
thrashing hauling and all incidental
| expenses. To the sum total Of all Of
these must be added reasonable profit
to the producer for the initiative he has
+ the benefit his production has been to
society. Any producer by careful calcu-
lation can determine his cost within Il
lI-.1 a Unit nd jc folly ny
producer to sell his product at less than
1T has cost. The Railroad Commission
of the State of California has adopted
the policy that a public utility is entitl-
ed to an earning depreciation of per
cent upon IS capital over and above
its entire operation, depreciation and
replacement costs; the United States
government granted a profit of 10 per
cent to contractors over and above all
such costs, and not that in the case of
the government contracts this profit
was on the turn or total product pro.
duct and not based upon capital en-
ploycd for the period or = year. An er.-
terprise employing $1ot00.00 in capi;,l
might have It turn over OF $500oo.01 in
Il years time.
When producers realize that factory
accounting methods ana modern sales
methods must be applied to their pro-
duets, both the producer and the con
sumner will be tremendously bcnetittCd
because these methods make for econO-
my in production and efficiency in dis
tilbution ana ehmi' "-ot n -p5
Of waste, many useless profits, hnd
scientifically and with macnlne-n..e
precision delivers the product to q WIZ.
ing buyer when he wants it ana al Z
fair price. 1t may be accepted as an
axiom that in matters Of food there is
always a waiting and willing buyer
some place for every commodity and
the great problem before the producers
is to organize and perfect distribution.
An intelligent enquiry into the cost
of production VIII quicken the business
instincts of a producer, will prove to
the general public and 10 the consumer |
that prices asked do not represent any |
profiteering profit, and will prove to |
the dealers and spectators that the
producers when organized constitute /
business unit capable Of doing anything |
and everything III the harvesting, ware /
housing distribution and sale of their |
products that any proilt making indi- |
vidual effort could do and with this |
very great difference which interests |
the producer and consumer alike-the |
dealer or SpeculatOr operates for his /
profit and takes from both ends Of the |
transaction, buying for as little as poss- |
ible and selling for as much as possible, |
whereas the association conducts the |
distribution and sale ON strictly at |
cost basis which cost is minimi2ed |
thrOuph great volume,