SUMMARY OF FINANCIAL HISTORY OF FARMS

Average size of farm, acres 143.21 133 Average area in crops (includes pasture), acres 121.1 112

Capital at end of three-year period $14,009 $8,893 Capital at beginning three-year period 12,962 7,704 ------- ------ Difference $ 1,047 $1,189

Interest on capital, $13,485, at 5 per cent[B] $ 674 $ 415 Increase in capital per annum 349 396 Average yearly receipts 3,613 2,208 Average yearly disburs.e.m.e.nts 1,907 1,221 Average yearly cash balance 1,706 987 Average yearly farm income 2,055 1,383 Average yearly labor income 1,381 968

These figures show the application of principles enunciated in this chapter. A careful reader will have no difficulty in recognizing how the different items have been obtained. For example, the difference between the receipts and disburs.e.m.e.nts in the first column gives the cash balance of $1,706. The farm income, $2,055, is obtained by adding to the cash balance $349, which is the annual increase in the capital.

The labor income is obtained by subtracting from the farm income the interest on the capital at five per cent. The amount of capital is determined by dividing by two the sum of the inventories at the beginning and end of the period.[C]

It will be noted that the gross receipts, the expenses, the farm income and the labor income on these actual farms are all more closely related to the capital invested than the size of the farm. Thus, on the 30 farms with a capitalization of about $13,500, the average yearly receipts were about $25 an acre, while on the 28 farms with a capitalization of about $8,300, the average yearly receipts were about $16 an acre. Likewise on the high-priced farms the labor income was approximately $10 an acre, while on the lower priced ones it was about $7.

[B] Obtained by dividing by two the sum of capital at beginning and end of three-year period.

[C] For further details see Hunt, "How to Choose a Farm," Chaps. X and XI.

CHAPTER XII

GRAIN AND HAY FARMING

An important and primary factor in the production of all wealth is labor. Aside from the professional and domestic cla.s.ses, the people of the world devote themselves to three forms of work: (1) Changes in substance, or natural products; (2) changes in form, or mechanical products; (3) changes in place, or exchange of products. The second of these forms of work gives rise to manufacturing; the third, to trade and commerce. Under the first sub-division two cla.s.ses of natural products may be recognized; first, what, for want of a better name, may be called chemical products, such as ores, coal and salt, from which are derived mining and the metallurgical arts; and second, vital products, or, in other words, vegetation and animals. It is work applied to the production of vegetation and animals that gives rise to agriculture. Agriculture is labor applied to the production of living things.

KINDS OF AGRICULTURE

The industries which deal with the production of living things may be divided, theoretically, largely on the basis of the character of the results, but to some extent upon the nature of the activities involved.

{ Grain Farming--Cereals and } { gra.s.ses. } { } Agriculture { Plantations--Cotton, sugar, } { tobacco, coffee. } Plant Production { (Soil Culture) { Truck Farming, Market } { Gardening--Vegetables. } { } Horticulture { Fruit Growing--Fruits. } { } { Forestry--Trees, shrubs. }

{ Stock Raising--Work, meat, fats, hides.

{ Stock Feeding--Meat, fats.

{ Stock Breeding--Animals.

Animal Production { Dairy Farming--Milk, b.u.t.ter and cheese.

(An. Husbandry) { Sheep Husbandry--Wool raising.

{ Poultry Raising--Eggs.

{ Beekeeping--Honey.

Mixed Husbandry

The manner in which this theoretical cla.s.sification has worked out in actual practice will be indicated in some measure by the inquiries of the United States Census Bureau. The twelfth census has cla.s.sified farms on the basis of their princ.i.p.al income. If 40% or more of the gross income of the farm was from dairy products, it was called a dairy farm; if from live stock, a live stock farm; if from cotton, a cotton farm. If no product const.i.tuted 40% of the gross receipts, the farm was cla.s.sified as a miscellaneous or general farm.

In 1900 there were 5,740,000 farms in the United States, which were, according to the rule just stated, cla.s.sified as follows:

FARMS CLa.s.sIFIED ACCORDING TO PRINc.i.p.aL SOURCE OF INCOME

Gross Average income Total area, size per Kind of farm. acres. Number. acres. farm.

Hay and grain 210,243,000 1,320,000 159 $760 Vegetables 10,157,000 156,000 65 665 Fruits 6,150,000 82,000 75 915 Live stock 335,009,000 1,565,000 227 788 Dairy produce 43,284,000 358,000 120 787 Tobacco 9,574,000 106,000 90 615 Cotton 89,587,000 1,072,000 84 430 Rice 1,088,000 6,000 190 1,335 Sugar 2,689,000 7,000 363 5,317 Flowers and plants 43,000 6,000 7 2,991 Nursery products 166,000 2,000 82 4,971 Miscellaneous 113,144,000 1,059,000 107 440 ----------- --------- --- ----- Total 844,000,000 5,740,000 147 $656

Including miscellaneous or general farms, there are just a dozen kinds of farms mentioned. Of this number, nine kinds obtained at least 40% of their products, and probably much more, from vegetable rather than from animal forms. However, live stock and dairy farms const.i.tute about one-third of the total number of farms, and almost one-half the farm acreage. There are four kinds of farms on which the production of grain and hay forms an important part of their activities; namely, the hay and grain farm, the live stock farm, the dairy farm, and general farm. These const.i.tute, in the aggregate, 75% of the farms of the United States, and by virtue of their larger area, they occupy 85% of the total farm area.

GRAIN AND HAY STATISTICS

At the close of the nineteenth century less than one-half the area of the United States was owned in farms. Only one-half of this farm area was considered to be under cultivation. The total area in cereals was one-tenth the total land area, while 3% was devoted to hay and 2% to all other crops except pasture.

Without going into details, it may be stated with reasonable a.s.surance that: (1) During the last half of the last century, the production of cereals has increased much faster than the population. For example, in 1850, there were raised in the United States one ton of cereal grains per capita; by 1900 this amount had increased to one and one-half tons for each inhabitant.

(2) Since the number of persons engaged in agriculture has decreased in proportion to population, the quant.i.ty of cereals produced in proportion to persons engaged in agriculture has increased in still greater ratio. So far, therefore, as the amount of cereals is concerned, the farmer has been getting an increasingly larger return for his labor.

(3) The quant.i.ty of cereals has increased in proportion to the arable land. This may be due to one or more of three causes: (a) greater average yield per acre; (b) greater proportion of cereals to other crops; or (c) to a change in the ratio of the different cereal crops.

The following table, giving the average yield of grain, reduced to pounds per acre, shows not only how the subst.i.tution of one cereal for another might affect the total production of cereal grains, but also suggests to the young farmer how he may modify the total product of his farm:

Yield Lb. Lb.

in bu. per bu. per acre Maize 24.2 56 1355 Barley 23.7 48 1138 Rye 15.0 56 840 Oats 26.2 32 838 Wheat 13.2 60 792 Rice Paddy 746 Buckwheat 14.0 48 672

Yields will vary relatively in different regions and with different types of soil, and should be studied with reference to one's conditions.

(4) The wheat and oat crops have increased about six and one-half times in 50 years, the hay crop five and one-half times, while maize has increased four and one-half times. Cotton, the only other great staple crop, has increased four times in the same period. The oat crop has increased the most rapidly of any since 1880. It is interesting, and may be significant, to note that, while the production of wheat and barley in Great Britain has decreased about one-half in thirty years, the production of oats has increased somewhat.

(5) The greatest rate of increase in the production of cereals in the United States during the last half century has taken place since 1870.

This increase is coincident with three other facts of the utmost importance: (a) The development of the central West, a treeless plain--prior to this period much of the farm land in the United States had been hewn out of the forest, tree by tree; (b) the consolidation of the steam railways into transcontinental lines; and (c) the introduction of the self-binding harvester. Formerly it took at least five men to do what is done today by one man in the harvesting of cereals.

ADVANTAGES OF GRAIN FARMING

(1) The cost of land excepted, the production of hay and grain requires a small outlay of money. During the past fifty years, many thousands of persons have been able to obtain farms of 160 acres at almost no cost. With a few hundred dollars invested in horses and tools with which to plow the prairie and sow the seed, these fortunate persons have oftentimes been able to pay the whole of their expenses, capital included, from the first crop. The renter who operates a hay and grain farm usually has but a small capital invested in his business.

(2) The cereals bring a quick return. Wheat may be sown in September and sold in July; maize may be planted in May and sold in November; oats may be planted in April and sold in August. The short period between seed time and harvest makes the oat crop a favorite one among renters. On the other hand, it takes from three to seven years to produce a marketable horse. It may take ten to fifteen years to begin to realize on an apple orchard.

(3) The products are not easily perishable, and hence can be held almost indefinitely. The development of the magnificent elevator system, based upon the principle that the cereals can be handled like water, greatly simplifies the holding and preservation of these staple products.

(4) The products are in constant demand, and hence they always find a market.

Agricultural commodities may be divided into three cla.s.ses, depending upon the area which controls the price of the commodity, as follows: (a) price units world-wide, as wheat, cotton, pork; (b) price units local to large districts--products too bulky to ship long distances--such as hay, potatoes and apples; (c) price units local to relatively small areas, such as strawberries and green vegetables. It is obvious that the larger the area which controls the price, the more constant will be the demand.

OBJECTIONS TO GRAIN FARMING

(1) It exhausts the soil. About two-thirds of the wheat of the United States is consumed outside the county in which it is raised.

(2) It requires a large quant.i.ty of land to produce a competence. Land must be low in price, or the interest on the money invested in the land will consume the profits. The relation of crop to income is suggested by comparing the gross returns from an acre of potatoes or tobacco with an acre of maize. The average gross income during a decade was, from an acre of maize, $9.50; an acre of potatoes, $38; and from an acre of tobacco, $61.50.

(3) Only such part of the land as is suited to tillage can be used.

(4) The marketing of cereals requires the transportation of bulky products. Hay is handicapped much more seriously. The distance a product can be shipped depends somewhat on the price per pound received for it. If it costs one cent a pound to ship maize to a grain market, obviously it cannot be transported without loss when it brings only 50 cents a bushel. On the other hand, two cents a pound may easily be paid for shipping b.u.t.ter which is worth 25 cents a pound.