Iowa County democrat. [volume] (Mineral Point, Wis.) 1877-1938, 1921-08-11
MAY USE THE BULK Line SYSTEM
In FIGURING OUT FARM COSTS

farmers average cost, which is the I'M
portant fact for each farmer, the ire
quency table constructed from the hg
ures thus obtained would show less
range than, that based upon any one
years figures.
1t Is true, also, that at any given
time there are men producing cotton
at loss who must in year or SO drop
out because of their inferior ability
and the resulting high cost Others
who start in with high costs because
of lack of experience reduce their costs
after two or three years. In their case
1t is not their average cost but the
cost and profit the last year which
they hold in mind in deciding whether
to continue or drop out of the cOmpe-
tition. When all Of these conditions
are taken into account, it becomes OBJ
vious that the price does not have to
cover the cost of hundred per cent
of the production of a given year in
order to keep the supply coming.
Establish Bulk Line.
The real problem is to ascertain the
relation between the range of costs
and the price which will elicit the de-
sired supply. In the work of the fed
eral trade commission it was found
that the price needed to cover the cost
of from 80 to 80 per cent of the prod
uct in order to secure this result. For
practical purposes IS per cent was
taken as a figure to be used as basis
of price fixing. Instead Of using the
classified phrase marginal COST" the
term bulk line" came into use to des-
ignate that limit in the range of costs
beyond which the price did not need
to rise in order to maintain production.
An So per cent bulk line" applied
to the cotton figures calls for a price
of % cents per pound instead Of the
average of % cents, or the average
plus 10 per cent of 25.3. At this bulk
line" cost price Of % cents, 27.7 per
cent of the farmers would be prOduc-
ing at a loss. Enough work has not
yet been done in the field of farm cost
accounting to give basis for the lOca-
ton of the bulk lime" on the cost
range table of any Of our staple farm
products.
Losses Consume Products.
There are certain factors which
would suggest that the bulk line" will
not need to be SO high for farm prod
acts as for manufactured products.
The keeping of cost records is much
more common im the factory than on
the farm. A knowledge of costs is the
basis of deciding what to produce and
what not to produce. Lack of cost fig
lures on the part of farmers may result
in their remaining in given line Of
production at a loss for many years
because the loss on the one product is
covered by the profit of another. 1t
would seem THAT a knowledge of costs
On the part OF farmers and an alert
ness to adjust production to those lines
which will yield maximum profits
would result ia higher bulk line" for
specific farm products.
The influence of the weather upon
crop yields is "a factor which makes
the application off the bulk line" the
sory to agriculture somewhat more
complicated than is it's application to
manufacturers. The individual manu-
facturer may know in advance how
many machines will result from a
given supply of cav material and labor.
The farmers outcome is subject to this
influence, which may result in a very
wide range of product resulting from
a given area, a given amount Of seed
and fertilizer and given amount OF
man and horse labor.