UNIVERSITY OF CALIFORNIA 
 
 COLLEGE OF AGRICULTURE 
 
 AGRICULTURAL EXPERIMENT STATION 
 
 BERKELEY 4, CALIFORNIA 
 
 WATCHING FARM COSTS 
 
 R. L. ADAMS' 
 
 Costs of producing farm crops, livestock, and 
 livestock products are reaching or have reached 
 an all-time high. Though these increased costs 
 are usually offset by the higher prices paid to 
 producers, the farm operator is still confronted 
 with the cost of farm labor, sometimes exceeding 
 $1.00 per hour; record prices for piecework; 
 limited supplies of machinery parts; and sub- 
 stantially higher costs for sacks, baling wire, 
 and other farm supplies. Unless economy is 
 practiced wherever possible, farming incomes are 
 bound to be reduced unnecessarily. 
 
 The extent to which costs have advanced is 
 perhaps best illustrated by several crops whose 
 costs were determined under 1939-1941 conditions, 
 with estimated and conservative changes pertinent 
 to 1943. Table 1, presenting data for 14 field, 
 
 of increased costs have been broken down to show 
 separately the increases in cost of man labor, 
 materials, and other items. The basic costs de- 
 termining these percentages include all necessary 
 use of labor, figured at prevailing wages (per 
 hour, per day, or for piecework, depending upon 
 custom) ; outlays for necessary materials such as 
 seeds, fertilizer, spray materials, irrigation 
 water, and marketing containers. The heading 
 "other costs" covers the use of motive power 
 (work animals, tractors, and farm trucks) and of 
 various other farm equipment ; taxes on land and 
 insurance on crops; depreciation of trees, vines, 
 alfalfa; depreciation of trellises; use of prun- 
 ing equipment, lug boxes, drying trays, and 
 other special equipment; management; and interest 
 on capital as represented by prevailing market 
 
 TABLE 1 
 
 Estimated Percentage Changes in Cost of Producing Selected California 
 
 Crops, 1943 vs. 1939-1941 
 
 Crop and yield per acre 
 
 Increase: 1943 over 1939-1941 
 
 Labor 
 
 Materials 
 
 Other 
 costs 
 
 All costs 
 
 Alfalfa hay; 5 tons 
 
 Apricots, canning; 4 tons 
 
 Barley, irrigated; 1,500 pounds 
 
 Beans, baby lima; 1,200 pounds 
 
 Cantaloupes, delivered to packing shed; 
 
 200 field crates 
 
 Cotton, lint; 600 pounds 
 
 Grapes, Thompson Seedless, raisin; 1 1/2 tons. . 
 
 Oranges, Valencia; 250 field boxes 
 
 Pears, canning; 6 tons 
 
 Prunes, dried; 1 1/2 tons 
 
 Rice; 2,500 pounds 
 
 Sugar beets; 12 tons 
 
 Tomatoes, canning; 6 tons 
 
 Walnuts; 1,500 pounds 
 
 Average 
 
 fruit, and truck crops, sets forth the percentage 
 increase in the cost of producing crops under the 
 yield conditions indicated. Percentage figures 
 
 per cent 
 
 133 
 
 104 
 
 91 
 
 126 
 
 99 
 
 134 
 
 168 
 
 89 
 
 70 
 
 130 
 
 54 
 
 67 
 
 85 
 
 136 
 
 106 
 
 per cent 
 
 8 
 10 
 84 
 92 
 
 13 
 
 7 
 
 4 
 
 4 
 
 13 
 
 58 
 
 9 
 
 30 
 
 39 
 
 29 
 
 per cent 
 
 22 
 
 5 
 
 11 
 
 17 
 
 9 
 
 11 
 
 4 
 
 28 
 
 16 
 
 20 
 
 11 
 
 9 
 
 10 
 
 13 
 
 per cent 
 
 20 
 51 
 40 
 58 
 
 64 
 69 
 73 
 30 
 43 
 63 
 40 
 40 
 51 
 57 
 
 50 
 
 Professor of Farm Management, Agricultural 
 Economist in the Experiment Station, and Agri- 
 cultural Economist on the Giannini Foundation. 
 
 value of the land (and trees, vines, or other 
 perennial crops) . 
 
 As table 1 indicates, the labor cost of pro- 
 ducing the 14 crops for which data are shown is 
 substantial. The rate does vary, however, from 
 a 54 per cent increase (rice) to a 168 per cent 
 increase (raisin grapes). Averaged for the 14 
 
 r 1 1 UNIVERSITY OF CALIFORNIA 
 
 LIBRARY 
 
 COLLEGE OF AGRICULTURE 
 
 DAVIS 
 
crops, labor costs have increased 106 per cent. 
 Seven of the 14 crops reflect labor-cost in- 
 creases exceeding 100 per cent. 
 
 The rise in cost of materials depends on the 
 items purchased. Only minor or no changes are 
 recorded for fertilizers, spray materials, and 
 irrigation water; but costs have risen markedly 
 for fruit and vegetable crates and for grain 
 sacks. The average increase in cost of materials 
 shows 29 per cent for these 14 crops, though 
 varying with individual crops from 4 per cent to 
 92 per cent. (Principal increases are in cost of 
 seed and sacks for barley, beans, and rice.) 
 
 No important changes are reflected in outlays 
 for taxes, management, and interest on capital. 
 The changes that do occur result from higher costs 
 for upkeep of tractors and farm machinery, for the 
 feed of work animals, and for baling (alfalfa hay). 
 The average increase shows 13 per cent for these 
 14 crops, though varying by crops from 4 per cent 
 to 28 per cent. 
 
 Total increases vary by crops from 20 per cent 
 (alfalfa) to 73 per cent (raisin grapes). The 14 
 crops show an average increase of 50 per cent. 
 
 Reducing Costs by Increasing Yields . --Increas- 
 ing the yield of any crop, provided the cost of 
 the increase amounts to less than the value, is 
 one way to reduce costs. Regardless of the yield, 
 about the same outlay is required to prepare land, 
 plant, cultivate, and irrigate. The additional 
 cost of harvesting, while greater in total for 
 
 the larger crop, is less per unit. Table 2 indi- 
 cates the effect of yields upon costs, using data 
 deemed pertinent to 1943. 
 
 Reducing Labor Costs . — Table 3 shows the im- 
 portance of man labor in the cost of producing 
 crops; in fact, labor comprises the largest single 
 item of expense. Because of this, one should 
 seriously consider any means that will reduce the 
 cost of labor by increasing efficiency, reducing 
 wastes, lessening costs, or decreasing needs. 
 Much is being done. Farmers everywhere are work- 
 ing out new techniques and equipment designed 
 either to reduce their man-power requirements or 
 to increase their efficiency. This publication 
 cannot summarize what is being tried and accom- 
 plished. The field is large, and the opportuni- 
 ties for further savings justify the best effort 
 that can be given. Many innovations will doubt- 
 less continue to be useful when farming returns 
 to normal. 
 
 In the examples selected to indicate the marked 
 upward trend of costs-, attention has been con- 
 fined to crops. A similar condition, however, 
 faces the producers of beef, lambs and wool, hogs, 
 milk, eggs and chickens, and other livestock, such 
 as turkeys and rabbits. These operators as well 
 as the growers of crops are obliged to meet mount- 
 ing costs; they also should seek ways to econoaize, 
 or to increase efficiency, with a view to reducing 
 costs. 
 
 TABLE 2 
 
 Effect of Yields of Selected Crops on Costs, 
 1943 Cost Data 
 
 
 Reduct: 
 
 ion in cost 
 
 Crop and yield per acre 
 
 per unit , high 
 
 
 yields 
 
 vs. low 
 
 
 E_ 
 
 sr cent 
 
 Alfalfa hay; 8 tons vs. 5 . . 
 
 
 14 
 
 Apricots, canning; 8 tons 
 
 
 
 vs. 4 
 
 
 26 
 
 Beans, baby lima; 1,800 
 
 
 
 
 26 
 
 Cantaloupes; 300 field 
 
 
 
 
 
 9 
 
 Barley, irrigated; 25 cwt. 
 
 
 
 vs. 15 
 
 
 11 
 
 Cotton, lint; 750 pounds vs. 
 
 
 
 400 
 
 
 26 
 
 Grapes, Thompson Seedless, 
 
 
 raisin; 2 tons vs. 1 . . . 
 
 
 29 
 
 Oranges, Valencia; 400 field 
 
 
 
 
 
 25 
 
 Pears, canning; 10 tons vs. 6 
 
 
 28 
 
 Prunes, dried; 2 1/2 tons vs. 
 
 
 
 11/2 
 
 
 11 
 
 Rice; 40 cwt. vs. 25 .... 
 
 
 10 
 
 S\igar beets; 20 tons vs. 12 . 
 
 
 27 
 
 Tomatoes, canning; 10 tons 
 
 
 
 vs. 6 
 
 
 10 
 
 Walnuts; 2,500 pounds vs. 
 
 
 1,500 
 
 
 13 
 
 
 
 TABLE 3 
 
 Cost of Man Labor as a Percentage of Total Costs, 
 Data as of 1943 
 
 
 Man-labor costs 
 
 Crop and yield per acre 
 
 as a percentage 
 
 
 of total cost 
 
 
 per cent 
 
 
 55 
 
 Apricots, canning; 4 tons . . 
 
 66 
 
 Barley, irrigated; 1,500 
 
 
 
 26 
 
 Beans, baby lima; 1,200 
 
 
 
 45 
 
 Cantaloupes; 200 field crates 
 
 64 
 
 Cotton, lint; 600 pounds . . 
 
 65 
 
 Grapes, Thompson Seedless, 
 
 
 raisin; 1 1/2 tons .... 
 
 64 
 
 Oranges, Valencia; 250 field 
 
 
 boxes 
 
 57 
 
 Pears, canning; 6 tons . . . 
 
 56 
 
 Prunes, dried; 1 1/2 tons . . 
 
 59 
 
 
 77 
 
 Sugar beets; 12 tons .... 
 
 63 
 
 Tomatoes, canning; 6 tons . . 
 
 63 
 
 Walnuts; 1,500 pounds .... 
 
 52 
 
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