Farm Financial Record Studies

Download or read book Farm Financial Record Studies written by University of Illinois and published by Forgotten Books. This book was released on 2015-06-15 with total page 355 pages. Available in PDF, EPUB and Kindle. Book excerpt: Excerpt from Farm Financial Record Studies Illinois farmers had slightly higher average net earnings in 1929 than in 1928 according to present available information based, on figures from a part of the nineteen hundred farm accounts completed in the Illinois farm account project last year. As pay for management, risk and use of capital the final computation of rate earned on total invested capital on Illinois farms for 1928 was 2.9 percent. No satisfactory method is known for valuing management of farms but if one percent on the investment be considered as pay for management there remained 1.9 percent for the risk and use of capital invested. Based on the average of all farms in the Illinois farm account project for the 5 years 1924 to 1928 one percent of the capital invested has been equivalent to 8.5 percent of the gross income. The farm earnings given above represent the average for the rank and file of farmers. Repeated studies of earnings on all farms in typical areas have shown that the average earnings for all farms are lower than for farms included in the farm accounting project. Allowance has been made for this fact. The difference has been found to be consistently about 2 percent of the investment in favor of the account keepers. For this reason the following figures for the farm accounting cooperators of Boone, McHenry and Winnebago counties should not, be taken to represent average farm earnings for this area. It is probable that earnings on the average farm for 1929 were about 2 percent less than for these progressive and businesslike farmers. The 51 farmers in these counties who kept financial records in the Illinois farm account project for 1929 earned as pay for the use of capital invested and for the management and risk of operating the business an average of 6.3 percent on their investments. A wage of $60 a month was. allowed as pay for the operator's labor, no salary being deducted for management. If we allow one percent cf the investment as pay for management, in this case amounting to $345 a farm, there remains a rate of 5.3 percent as pay for the risk and use of capital invested in these record keeping farms. A second method of computing earnings is to deduct 5 percent of the investment as pay for the risk and use of capital instead of deducting a labor wage for the operator and assume that the remaining income is pay for labor and management. Following this plan it is found that the average farm operator of this group had a labor and management wage of $1146. If it is assumed that the labor performed by the operator is worth $60 a month or $720 a year, there is $426 left as pay for risk and management in doing a gross business of $5472 with an investment of $34,475. The average value of the land included in this report was $103 an acre. Other items including improvements, equipment, livestock and feed made a total investment of $178 an acre. The land and improvements exclusive of the house averaged $135 an acre. Farm earnings vary widely from year to year owing to differences in weather and markets. The farm account cooperators in this area earned a higher average rate for 1929 than for any other year since any considerable number of records have been available. The earnings for 1929 were low, however, as compared with reported businesses in other industries. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com