pmnmm amammzmous as mmm‘mws FARMS IN LOWER MICH'SGAN AND NORTHEASTERN mwm ' wrrH 595cm. EMPHA555 on new GRAINS M9 uvssrocx ‘ ‘é‘hesis for flu Dear“ of PhD. MICHIGAN STATE UNIVERSITY Curtis Frankfin Lard ‘1963 THISlS a; V ,. . I ‘ . l V\_«' . ‘(o« 1“ ' OVFCU " ’3‘ This is to certify that the thesis entitled PROFITABLE REORGANIZATION OF REPRESENTATIVE FARMS IN LOWER MICHIGAN AND NORTHEASTERN INDIANA WITH SPECIAL EMPHASIS 0N FEED GRfiglgm quIVESTOCK Curtis Franklin Lard has been accepted towards fulfillment of the requirements for Ph.D. degree in Agricultural Economics Major p of sor July 25, 1963 Date LIBRARY Michigan State University m5 IILAIIJ'J'II'” ' ~‘ “L A &' 'flgla’m- . IIIIIIIIIIIIIIISII \/ PROFITABLE REORGANIZATIONS OF REPRESENTATIVE FARMS IN LOWER MICHIGAN AND NORTHEASTERN INDIANA WITH SPECIAL EMPHASIS ON FEED GRAINS AND LIVESTOCK by Curtis Franklin Lard A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Department of Agricultural Economics 1963 Iavan-*"* kaI-aaw‘ ABSTRACT PROFITABLE REORGANIZATIONS OF REPRESENTATIVE FARMS IN LOWER.MICHIGAN AND NORTHEASTERN INDIANA WITH SPECIAL EMPHASIS ON FEED GRAINS AND LIVESTOCK by Curtis Franklin Lard The principal objective of this study was to determine optimal farm organizations that would indicate profitable adjustments for representative lowerIMichigan and northeastern Indiana farms having potential for producing feed grains. beef cattle and hogs. Linear programming was used to ascertain optimal farm organizations under varying prices for corn. hogs and beef cattle subject to the resource restrictions found on the representative farms in a survey covering 1960 data. Three price levels. low} medium and high were assumed for corn. hogs and beef cattle in the analysis. Representative farms were delineated by size and type of farm. Size of farm was defined in terms of total acres operated. while type of farm was determined by the enterprise contributing the greatest percentage of gross income in 1960. Farms were classified as Large, Medium and Small farms and as Livestock. Cash Crop. Cash Grain and Dairy farms. The analysis was performed for two phases and for two geographic areas. Phase 1 was the traditional linear programming model with land and associated durable resources assumed fixed. Phase 2 permitted variation where profitable in land and durable resources whose acquisition prices and salvage values differ. Separate analyses for the Thumb-Saginaw Valley and for the South Central (including south central Michigan and northeastern Indiana) areas took into account differences in soil productivity. urbaniza- tion, land prices and crops grown in the two areas. Curtis Franklin Lard The general conclusion of the study was that farms in the studied areas similar to the representative Cash Crop. Cash grain and Dairy farms could profitably specialize in beef and hog production under the conditions assumed in the study. More specific results were as follows: 1. The representative farms studies were not organized to maximize profits. 2. Many resources were not fully utilized on the representative farms in 1960. 3. It would be profitable for a large number of Michigan and north- eastern Indiana farme to increase their production of beef and pork and feed their bane produced feed grains to such livestock rather than selling feed grains. h. The results indicate expansion in feed grain acreages in the Thumb-Saginaw valley area and a reduction in forage crops and dairying. 5. The indicated expansion in beef and hogs would require large investments in livestock facilities. Also, the indicated expansion in beef implies a very large increase in demand for feeders. 6. Further use of credit on farms similar to the representative farms would be profitable . Since this study only considered the production side of the picture at the individual farm level, all the above conclusions must be conditioned by the undetermined.price impacts of widespread adoption of the conclusions. IA later phase of the NC-Sh Study, of which this thesis is a part, will con- sider these price impacts. ACKNOWLEDGMENTS The author wishes to express his gratitude to many people who were very helpful in the development of this study and thesis. Sincere thanks are due to Dr. Glenn L. Johnson for his valuable guidance and inspiration throughout the author's graduate study. Special thanks are due to Dr. Les V. Manderscheid for his assistance and constructive help in the completion of this thesis. The constructive criticisms and suggestions of Drs. D. E. Hathaway, G. D. Irwin, J. N. Ferris, M. Kelsey, L. Kyle, Mr. M. Petit and Mr. W3 Ruble of the Department of Agricultural Economics were greatly appreciated. Many thanks are also due to Dr. L. L. Boger, Chairman, Department of Agricultural Economics. who provided financial assistance to the author and whose council was very inspiring. While constructing budgets and input-output data for the enterprises, personnel from the Departments of Agricultural Economics. Agricultural Engineering, Animal Husbandry. Dairy, Farm Crops, and Soil Science were helpful. The names of these people are stated in the text under the enter- prises. Cooperation of the farmers interviewed, County A.S.C. Office Mana- gers. and Michigan Co-operative Extension Service was appreciated. The author expresses his gratitude to R. A Young, a fellow student, for his cooperation and valuable assistance in helping carry out the sur- VQY mmi developing the linear programming model. Finally, the author thanks his wife. Jimmie Ann. for her assistance and for her endurance. Any errors in this dissertation are the responsibility of the author. ii TABLE OF CONTENT ACKNOWLEDGMENTS . . . . . . . HST OF TM 0 O O O O O O 0 O O O O O O U) LIST OF TABLEAUS . . . . . . . . ..... LIST OF ILLUSTRATIONS . . . . . . . ....... Chapter I INTRODUCTION Definition of the Research Problem Objectives and Procedures . Area-S Stlldied ° ° ' ' e e e e e Order of Presentation . . . . . II THE GENERAL MODEL, ASSUMPTIONS, AND RESEARCH METHODOLOGY. Formulating the Model . . . . . . Assumptions and Background . ........ Different Approaches . . Research Methodology . . . . . . . . Sources of Data . . . . . . Sample and Sampling Procedures . . . . . . . Schedule and Interviewing . . . . . . . Coding, Tabulating, and Use of Computers III DEFINING REPRESENTATIVE FARM SITUATIONS . . . . . . Important Variables . . . . . . . . . . . . . in Analyses . Representative Farms Delineated in This Using Representative Situations Enterprises and Resources . IV THE LINEAR PROGRAMMING MODEL - . . Products and Price Projections Phase 1 of the Model . . Thumb Area . . . . . Crop Activities . Credit Activities Labor Activities Beef Cattle Enterprise Dairy Enterprise . . . 'Swine Enterprise . . . . South Central Area . ....... Crop Activities . . . . Other Differences . . . iii Study 0 O O O 0 O Page ii H \00\0\N ll 12 14 14 l6 17 20 22 22 24 25 26 34 35 37 37 41 1+2 1+3 49 51 56 57 59 Chapter Page Phase 2 of the Model . . . . ............ 61 Thumb Area . . . ..... . ........ 61 Crop Activities . . . ........ . 61 Credit Activities ........ . . 63 Labor Activities .............. 63 Land Activities . . . . . . ..... 66 Machinery Activities . . . .......... 68 Livestock Activities . . . . . . 73 &:tended Phase 2 IVIOdel e e e eeeeee 7 South Central Area . . . . . . . ..... 73 Crop Activities . .............. 74 Credit Activities ......... . . . . 74 Labor Activities ..... . . . . 74 Land Activities . . . . . . . . . . . . 75 Machinery Activities . . . . . ..... 75 Livestock Activities . . . .......... 78 V OPTIMAL SOLUTIONS FOR THE REPRESENTATIVE FARMS . . . . . . 79 Optimal Organizations and Adjustments for Phase 1 80 me Ar ea 0 0 O I O O O O O' O O O O O O O 0 O O 80 south Central Area C O O O O O I O O O O C O O O 93 Optimal Organizations and Adjustments for Phase 2 . 106 Thmnb Area . C O O C O O I 0 O O O O O O O O O O 109 South Central Area . . . . . . . . ...... 115 Comparing and Assessing the Results from the Different Phases . . . . . . . . . . ...... . . 128 Thuxnb Area 0 O C I O O O O O O O O O O O O O O O C 128 South Central Area . . . ..... . . . . . 133 VI SUMMARY. CONCLUSIONS, AND IMPLICATIONS . . . . . . . . . . 141 Conclusions . . . . . . . ...... . . . . . . . 142 Phase 2 O O O O O O O O O O O O O C 0 O O O O 142 Phase 1 O O O O O O O O O O C O O O ..... 11411" Limitations, Implications and Further Study . . . 146 APPENDIX A. Tables cu? Supplementary and Input-Output Data . 151 APPENDIX B. Tables of Other Optimal Organizations 162 APPENDIX C. Questionnaire ...... . . . . . . 182 BIBLIWRAPHY e e e e e e e e e e e e e e e eeeeeeeeee 198 iv LIST OF TABLES Table Page 1. Number of Farms in Each Size-Type-Area Classification . . . 26 2. Enterprise Levels by Representative Farms in 1960 - Thumb Ar 6 a O O O O O O O O O O O O O O O O O O O O O O O 27 3. Enterprise Levels by Representative Farms in 1960 for the south central Area O O O O O O O O O O O O O O O O O O O 28 4. Resource Restrictions for Representative Farms - Thumb ”ea O O O O O O O O O O O O O O O O O O O O O O O O O O 30 5. Resource Restrictions for Representative Farms - South central Area ' O O O O O O O O O O O O O O O O O O O O O O 31 6. Price Levels Assumed for the Study Areas . . . . . . . . . 79 7. Gross Income and Percent of Sales Income by Enterprise and Enterprise Levels for Farms in the Thumb Area . . . . 82 8. Optimal Organitations for Medium Cash Crop Farm in the Thllmb Area. - Phase 1 e e e e e e e e e ,. e e e e e e e e 88 9. Investments and Purchases Required to Achieve Optimal Organizations and Marginal Value Productivities for Selected Resources on Medium Cash Crop Farm in Thumb Area - Phase 1 . . . . . . . . . . . . . . . . . . . . . 89 10. Optimal Organizations for Smallqudium Dairy Farm in the Thumb Area - Phase 1 e e e e e e e e e e e e e e e e e e 91 ll. Investments and Purchases Required to Achieve Optimal Organizations and.Marginal Value Productivities for Selected Resources on Smallqudium Dairy Farm in Thumb Area - Phase 1 . . . . . . . . . . . . . . . . . . . . . 92 12. Gross Income and Percent of Income by Enterprise and Enter- prise Levels for Farms in the South Central Area . . . . 95 13. Optimal Organizations for Medium Livestock Farm in the SOUth central Area. - Phase 1 ' e e e e e e e e e e e e e 99 14. Investments and Purchases Required to Achieve Optimal Organizations and Marginal Value Productivities for Selected Resources on Medium Livestock Farm in South Central Area - Phase 1 . . . . . . . . . . . . . . . . . 100 15- Optimal Organizations for Medium Cash Grain Farm in the South central Area. - Phase 1 e e e e e e e e e e e e e e 103 Table Page 16. Investments and Purchases Required to Achieve Optimal Organizations and Marginal Value Productivities for Selected Resources on Medium Cash Grain Farm in South Central Area - Phase 1 . . . . . . . . . . . . 104 17. Optimal Organizations for Medium Dairy Farm in the South Central Area - Phase 1 . . . . . . . . . . . . . 107 18. Investments and Purchases Required to Achieve Optimal Organizations and Marginal Value Productivities for Selected Resources on Medium Dairy Farm in South Central Area - Phase 1 . . . . . . . . . . . . . . . . 108 19. Optimal Organizations for Medium Cash Crop Farm in Thumb Area - Phase 2 . . . . . . . . . . . . . . . . . 111 20. Investments and Purchases Required to Achieve Optimal Organizations and Marginal Value Productivities for Selected Resources on Medium Cash Crop Farm in Thumb Area - Phase 2 . . . . . . . . . . . . . . . . 112 21. Optimal Organizations for Small-Medium Dairy Farm in mmb Area — Phase 2 O O O O O O O O O O O O O O O O O 116 22. Investments and Purchases Required to Achieve Optimal Organizations and Marginal Value Productivities for Selected.Resources on Small-Medium Dairy Farm in Thumb Area - Phase 2 . . . . . . . . . . . . . . . . . 117 23. Optimal Organizations for Medium Livestock Farm in South Central Area - Phase 2 . . . . . . . . . . . . . 120 24. Investments and Purchases Required to Achieve Optimal Organizations and Marginal Value Productivities for Selected Resources on.Medium.Livestock Farm in South Central Area - Phase 2 . . . . . . . . . . . . . 121 25. Optimal Organizations for Medium Cash Grain Farm in South Central Area — Phase 2 . . . . . . . . . . . . . 122 26. Investments and Purchases Required to Achieve Optimal Organizations and Marginal Value Productivities for Selected Resources on Medium Cash Grain Farm in South Central Area - Phase 2 . . . . . . . . . . . . 124 27. Optimal Organizations for Medium Dairy Farm in South central Area " Phase 2 e e e e e e e e e e e e e e e e 126 28. Investments and Purchases Required to Achieve Optimal Organizations and Marginal Value Productivities for Selected Resources on Medium.Dairy Farm in South Central Area - Phase 2 . . . . . . . . . . . . . . . . 127 29. The 1960, the Optimal for Phase 1, and the Optimal for Phase 2 Resource Levels for Representative Farms - mumb Area O O O O O O O O O O O O O O O O O O O O O O 130 A-l. A-Zo A-Bo A-lo e A‘D. o B-1 0 B‘Zo 13-3. B-4. 3-5. B-6. The 1960, the Optimal for Phase 1, and the Optimal for Phase 2 Resource Levels for Representative Farms - South Central Area . . . . . . . . . . . . . . . ..... Townships and Counties Qualifying for the Survey by Areas . . Hours of Annual Overhead Labor Per Farm by Size and Type of Farm by Geographic Area . . . . . . . . . . . . . . . Assumed Rates for Custom work in Michigan Machinery Performance Rates and Costs Product and Factor 1966 Projected Prices Used in This Study Inputs and Yields Per Acre for Crops in the Thumb and South Central Areas . . . . . . . . . . . . . . . . . . Labor Requirements for Hog Activities . . . . . . . . . . Feed Requirements for Sow and Eight Pigs . . . . . . . . . . Hours of Labor Required for Different Beef Cattle Systems . Total Feed Requirements Per Head by Beef Cattle Systems . Hours of Labor Required Per Dairy Cow by System . . . . . . . Optimal Organizations for Small Cash Crop Farm in Thumb Ax‘ea "' Phase 1 o e e e e e o e e e e e e o e e e o o e o Investments and Purchases Required to Achieve Optimal Organizations and Marginal Value Productivities for Selected Resources on Small Cash Crop Farm in Thumb Area - Phase 1 . . . . . . . Optimal Organizations for Large Cash Crop Farm in the T11me Area "' Phase 1 e e e e e e o e e o e e e e e e e o e Investments and Purchases Required to Achieve Optimal Organizations and Marginal Value Productivities for Selected Resources on Large Cash Crop Farm in Thumb Area - Phase 1 . Optimal Organizations for Large Dairy Farm in the Thumb Area - Phase 1 . . . . . . . . . . . . . . . . . . . . . Investments and Purchases Required to Achieve Optimal Organizations and Marginal Value Productivities for Selected Resources on Large Dairy Farm in Thumb Area - Phase 1 . . . . . . .'. . . . . . . . . . . . . . vii Page 135 152 153 154 155 156 157 158 159 160 160 161 163 164 165 166 167 168 Table 8-7. 3-9 0 B-lO. B-ll. B-lZ. 3-13. 3-14. B-lS. 3-16. 3-17. 3-18. 3-19. Optimal Organizations for Small Livestock Farm in the South Central Area - Phase 1 . . . . . . . . . . . . . . . Investments and Purchases Required to Achieve Optimal Organizations and Marginal value Productivities for Selected Resources on Small Livestock Farm in South Central Area - Phase 1 . . . . . . . . . . . . . . . . Optimal Organizations for Large Livestock Farm in the South Central Area - Phase 1 . . . . . . . . . . . . . . Investments and Purchases Required to Achieve Optimal Organizations and Marginal Value Productivities for Selected Resources on Large Livestock Farm in South Central Area - Phase 1 . . . . . . . . . . . . . . . . . Optimal Organizations for Small Cash Grain Farm in the South central Area - Phase 1 O O O O O O O O O O O O O O O O O Investments and Purchases Required to Achieve Optimal Organizations and Marginal Value Productivities for Selected Resources on Small Cash Grain Farm in South Central Area - Phase 1 . . . . . . . . . . . . . . . . . Optimal Organizations for Large Cash Grain Farm in the south. central Area. '- Phase 1 e e e e e e e e e e e e e e Investments and Purchases Required to Achieve Optimal Organizations and Marginal Value Productivities for Selected Resources on Large Cash Grain Farm in South Central Area - Phase 1 . . . . . . . . . . . . . . . . . Optimal Organizations for Small Dairy Farm in the South Central Area - Pmse l e e e e e e e e e e e e e e e e e Investments and Purchases Required to Achieve Optimal Organizations and Marginal Value Productivities for Selected Resources on Small Dairy Farm in South Central Area - Phase 1 . . . . . . . . . . . . . . . . . Optimal Organizations for Large Dairy Farm in the South centralArea-Hlaseleeeeeeeeeeeeeeeee Investments and Purchases Required to Achieve Optimal Organizations and Marginal Value Productivities for Selected Resources on Large Dairy Farm in the South Central Area - Phase 1 . . . . . . . . . . . . . . . . . Organization of the Large Cash Crop Farm in the Thumb Area . viii Page 169 170 l7l 172 173 174 175 178 179 180 181 LIST OF TABLEAUS Tableau Page 1. Crop Activities for Phase 1 - Thumb Area . . . . . . . . 38 2. Credit Activities for Phase 1 . . . . . . . . . . . . . 41 . Seasonal Labor Hiring Activities Thumb Area . . . . . 42 O Ref cattle Actiuues O O O O O O O O O O O O O O O O O M O Grade A Dairy Acuflues O O O O O O O O O O O O O O O O 50 3 a 5 6. Reg Activities . . . ._. . . . . . . . . . . . . . . . . 53 7. Crop Activities Specific to the South Central Model . . 58 8. Grade B Dairy Activities . . . . . . . . . . . . . . . . 6O 9. Labor Activities for Phase 2 - Thumb Area . . . . . . . 65 10. Land Activities for Phase 2 - Thumb Area . . . . . . . . 67 ll. . .Hachinery Activities for Phase 2 - Thumb Area . . . . . 7O 12. Land.Activities for Phase 2 - South Central Area . . . . 76 13. .Hachinery Activities for Phase 2 - South Central Area . 77 LIST OF ILLUSTRATIONS Figure Page 1. Location of Geographic Areas Studied . . . . . . . . . . . . 7 m I MENTION Ian: perplexing problue are encountered by feed grain and live- stock far-ere. Specialisation. technological advance. and the poaaihle cvercod‘bent of reeourcee to production are acne of the neat eignificant developmte facing feed grain and liveetock fanera. The causes and effects of theee developente vary ooneiderably free one state to another and even free one fan to the next. he ueual effecte are lower fare product pricee. nladjuetlente in production. and non-optilal allocation of reeourcee that lead to lower incuee to far-era. In order to help define. alleviate and/or eolve acne of the above lenticned prehlue. eeveral atatee in the North Central region are obtain- ing belie information with reepect to underlying factora which affect the eupply of feed grain and liveetook. The inveetigation reported in thia theeie ie a portion of the effort put forth in Michigan to aearch out cone of the crucial aapecte which affect the potential for feed grain and live- etoek preduction in thie atate. m Regional can? of which thie theaie 1.. a part 1. concerned with eupply and demand prohleaa aeeociated with the feed grain-livestock coupler. he winery objectivee of the Regional Stuw are: (l) to eetilete optical farm reeouree uee and eupply reepeneee of hen am beef in repreeentative fare aituatione: (2) to eatinate total ~ production of w V—Y 1n; m Central Regional etudy entithd. new); Reeponee and gags-cute for he. and Beef Cattle Production“ (hereafter referred to aa hogs and beef and patterns of resource use for the North Central states and for the nation; an! (3) to determine the production situations and the areas or states in which specified quantities of pork and beef would or could be produced most efficiently under various projected levels of demand and prices with a given level of technology. For similar agricultural areas that cross state lines. cooperative efforts among these states have been developed. Michigan State University 01.3.0.) cooperated with Purdue University in the south central part of Michigan and the northeastern part of Indiana. M.S.U. is responsible for analyzing the data from this area. Also. M.S.U. cooperated with Ohio State adversity (0.3.0.) in the southeast corner of Michigan and northwestern Ohio. In this area. M.S.U. personnel were responsible for taking Michigan schedules. while 0.8.0. had responsibility for analyzing the data. The study reported in this thesis is an extension of the NC-54 effort: nevertheless. it is only a part of M.S.U.'s contribution to the study of the problems associated with the feed grain-livestock couples: and adjus‘blents in this sector of Michigan agriculture. In addition to this study. a functional analysis of feed grain and livestock farms is being carried out, a tine series analysis of the national feed grain-livestock complex is being conducted. an aggregative study of the results reported in this thesis is planned. and "outlook type" work is being carried out. so b Since 1952. large quantities of feed grains have been added to COVOment storage and the North Central region has been partially res- ponsible for this surplus feed grain production. Michigan is a contri- butor to this feed grain surplus area. Farmers have been producing more feed grains than utilized by feed grain consuming units. In 1960, Michi- gan farmers sold 38 million bushels of their 91 million bushel corn crop. In 1961. they sold 41 million bushels of corn from a total crop of 102 million bushels.l Some of this corn was purchased by Michigan farmers. but most of it left the state. The acuteness and the complexity of the national feed grain pro- blem were brought into focus during 1961. At that time. a U.S. Feed Grain Program was initiated to reduce surplus production. The Feed Grain Program has been ani is a step toward reducing: (l) the stock-piling of surplus feed grains and (2) the costs of storing and storage facilities. Neverthe- less. present stock-piling and storage costs give rise to several problems and questions which must be faced by the feed grain producer. the livestock prOducer. the consuming public, grain handlers. agricultural policy makers. and others. In Michigan and northeastern Indiana where labor is quite expensive. some of the relevant questions are: (1) Should these areas produce their meat requirements or should they produce and export grains and import meat produced with cheaper labor in other areas of the United States? (2) Since Michigan is in the "channel of flow" for beef and pork to the Eastern markets and since it has a surplus of feed grains, would it not be economically feasible for the feeder livestock to stop off in Michigan to be fattened out on their way east? (3) What are some of the economic adjustment potentials for the feed grain-livestock complex? 1U. s. Department of Agriculture, Eield and Seed Crgps Producggn. Em Use, gag Sges Vglue. by StatesI 1260- l. Statistic Reporting Ser.. Crop Reporting Board, Washington. D. 0.. May. 1962. Farms in Michigan have been changing rapidly. particularly in recent years and in the southern part of the state. Farms have been sold, rented, expanded and taken over for urban uses. Some farmers have started working off the farm while renting or selling their farmland. while other farmers have become part time farmers while holding down industrial jobs.1 Several other. sectors, in addition to the feed grain-livestock sector. of Michigan agriculture are involved in this complex of problems. The dairy sector is a market for the feed grains. as well as a competitor with the hog and beef sectors for factors of production. Several crops are competitive with feed grains ”for .the land and other resources. .Some crops under certain conditions may either compete with feed grains and/or supply lay-products which are used as livestock feed. For example, sugar beets in the Thumb and Saginaw Valley produce by-products which are used for livestock feeds while they compete with feed grains and other crops for land and other resources. A study of sugar beet production is being carried out by M.S.U. under a U.S.D.A. contract.2 These aspects indicate the interrelatedness and. interdependencies which exist in agricultural problems . Earl Heady and Alvin Egbert made a study of the interregional com- petitive production of wheat arr! feed grains.3 They state. ". .. .a methodological _ 3-H. s. Milt. "Part-TimeFarming," Michigan Farm Economics. Depart- ment of Agricultural Economics, April and May, 1955, and Ralph Locmis, ‘ "Part-flue Farming in Michigan.“ Mterly Bulle%n. Vol. 44. pp. 644-53, Michigan Agricultural Experiment Station, May, 19 2. zRobert A. Young. An mic Stu r the Eastern et 3 M. Ph.D. thesis in preparation. Department of Agricultural Economics, Michigan State University. 3mm o. Heady and Alvin c. Egbert. "Programming Regional Adjustments in Grain Production to Eliminate Surpluses." gurnal of [arm Economics. Vol. ms pp. 718.33s More 19590 appraisal such as that reported here"1 to indicate that their study was methodological; however, they also state, "Later in the article we provide empirical indication of the regional shifts in grain production which might be desirable if annual output were brought in line with an assumed level of deman ."2 They reported in the section, "Empirical Indications of Regional Production Patterns," of their article that their models specified that Michigan withdraw from grain production. They divided the grain producing area of Michigan into two regions (one included the Thumb and Saginaw Valley area) and both areas were shown to have few possibilities for grain produc- tion. However. their conclusions appear questionable because of the assumed conditions and data used in the analysis. This is particularly true of the region which included the Thumb-Saginaw Valley area. By contrast, other studies have shown cash grain farming to be a profitable endeavor in this area. Hildebrand3 found feed grain production to be profitable in this area. Dvorak'su and Brooke's5 findings agree with those of Hildebrand for the Thumb and Saginaw Valley area. The present investigation is a more intensive and detailed study of the Thumb and Saginaw Valley area, south central Michigan area, and northeast 1Ibid.. p. 719. 2Ibid.. p. 719. 3Peter E. Hildebrand, Farm Organization and Resource Fixity: Modifi- cations of the Linear Programming Model. unpublished Ph.D. thesis, Department of Agricultural Economics. Michigan State University, 1959. . “Frank E. Dvorak; Programming the Organization and Capital Use for a Cash-Crop Farm in the Saginaw Valley and Thumb Area of Michigan, unpub- lished M.S. thesis, Department of Agricultural Economics, Michigan State Uni- versity. 1959. 5David M. Brooke. Marginal Productivities of Inputs on Cash Crop Farms in the Thumb and Saginaw Valley Area of’Michigan, unpublished M.S. thesis, Department of Agricultural Economics, Michigan State University, 1958. Indiana which should aid in answering some of the above mentioned questions. Objectives and Procedures The main objectives of this study can be outlined as follows: (1) to determine optimal organizations of representative farms in certain parts of Michigan and Indiana; (2) to evaluate the competitive relationships of various enterprises; (3) to assess the effects of the adjustments indicated by the programmed solutions; and (1+) to provide data and conclusions (a) to help derive supply relations for representative farm.situations and (b) for aggregation over an enlarged area encompassing the major production areas in the North Central region. The analytical technique employed in an effort to accomplish the above mentioned objectives involve the use of linear programing analysis. The procedures involved in carrying out the study included: (1) surveying specified farming areas in Michigan and Indiana; (2) using the data collected in the field survey to define representative farm situations; (3) programming representative farms using taro different models; and (4) assessing the results of the study. fleas Stygied The DIG-51+ Study for Michigan includes more areas than are reported in this thesis. The areas (totaling 21 counties) included in the entire study are: Thumb and Saginaw Valley area of Michigan (hereafter referred to as the Thumb area). south central area of Michigan. southeast corner of Michigan. and the northeastern part of Indiana (see Figure l). The main aphasia of this thesis is on (1) the hub area and (2) the south central part of Michigan and the northeast part of Indiana. treated as one area. The resulted presented for the South Central area include the northeastern THUMB-SAGINAW VALLEY AREA 1 S O U T H C E N T R A L MICHIGAN -W if A R E A IND} NA OHIO FIGURE I - LOCATION OF GEOGRAPHIC AREAS STUDIED 7 Indiana area. The fruit area in western Michigan and the dairy area near Detroit which are potential grain producing areas were omitted. Also. the northern part of the lower peninsula and the upper peninsula were not included. The climate does not vary a great deal over the areas studied. The amount and frequency of rainfall during the growing season is just slightly greater as one moves north from Indiana to the Thumb.1 The growing season is about 2 weeks shorter (about one week in both the spring and fall) for the Thumb than for the extreme southern edge of Michigan, but this makes little difference since crop varieties grown are adapted to such weather. However. there is usually one extra cutting of alfalfa for hay or silage in the South Central area. This is taken into account in the model. The dif- ference in the severity of the winter is debatable. but no real significant differences exist between the Thumb and South Central areas which would affect techniques of production. Winter is about 10 days longer in the bulb if one uses the date of the last freezing temperature in the spring as an indicator. The real differences between the Thumb and the South Central areas are soilszand extent of urbanization. The Thumb area has dark colored Humic-Gley soils which require tile drainage but have high natural fertility. These soils include Sims. Kawkawlin. Capac, Iosco, Wisner and Essexville. 1North Central Regional Publication No. 115, Precigltation Prob- aggges in. go Neath Central States, published by University of Missouri. Agricultural mperiment Station, Columbia. Missouri. July. 1960. 2The following references were used in studying the soils of Michi- gan: (l) S s of the North Centr Re on of the United States. North Central Regional Publication No. 7 . Published by Agricultural Experiment Station, University of Wisconsin. Madison, Wisconsin. June. 1960; (2) J. C. Veatch. A Map of Michigan Soils, on file in Glenn L. Johnson's office; and (3) E. P. Hhiteside, I. F. Schneider and R. L. Cook. Soils of Michi an. Special Bulletin 403. Michigan Agricultural Experiment Station, 1952. The soils included are very similar to Brookston and Conover in their soil management and drainage problems. They are clay loams or loams that are imperfectly or poorly drained. The major type of farming is cash crop. In the South Central area there are light colored Podzolic soils, with.Miami, Conover and Hillsdale being the main ones of this group. These soils are much less productive than the Thumb soils but have fewer drainage problems. Thus. one finds less intensive cropping programs. In the South Central area, the major types of farms are general. dairy and livestock. The South Central area is much more influenced by urbanization and industrialization than the Thumb area. Land values in the South Central area tend to be bid up as a result, whereas in the Thumb area the land price is more affected by high valued cash crops which can be grown on the land. Earnings from.high valued cash crops such as sugar beets and dry beans are capitalized into the value of the land. The differences in productivity of the soils, the crops which can be grown in the two areas, urbanization and land prices made it necessary to make substantial changes in the linear programming model from.one area to the other. The farms in the South Central area tend to be larger in land area than the Thumb farms. Based on the data collected in the survey for this study. the South Central farms averaged 204 acres of total land and 172 acres of cropland, while the Thumb farms averaged 162 total acres and 150 acres of cropland in 1960. Order of Presentation In Chapter II, a brief resume of previous studies employing linear programming and other models is presented along with a general description 10 of the model used in this investigation. The two phases of the linear programm- ing analysis of this study are defined. Also, the assumptions made for this programming model. criticism of previous applications of linear programming, and the research methodology of this study are presented in Chapter II. Chapter III presents the representative farm situations delineated in this study and the variables used to stratify the farms. Special attention is given to the variables used in setting up representative farm.situations and to the use of such farms in the linear programming analysis. The kinds and levels of enterprises and resources found on the representative farms are presented in this chapter. The linear programming model is described in Chapter IV. This chapter presents the activities and coefficients used for the Thumb and South Central areas. The distinctions are also made between the model for each area and for each phase in this chapter. The programmed optimal solutions for the representative farms are presented in Chapter V. Attention is given to the major factors which influence the kinds and extent of the programmed adjustments in the organiza- tion of farms. In this chapter, comparisons are made between the resulting optimal organizations of the representative farms for Phase 1 and for Phase 2. In the last part of the chapter. an assessment is made of the effects of varying certain durable resources on the optimal organization of farms. The study is summarized and the conclusions are drawn in Chapter VI. In the final section of the chapter, implications are indicated for farmers in the study areas and further uses of the results of this study are suggested. CHAPTER II THE GENERAL MODEL, ASSUMPTIONS, AND RESEARCH METHODOLOGY Linear programming is used in this study to work with the theory of the firm. with special emphasis on resource fixity. The programming model uses profit (gross income less variable cost) as the goal to be maximized. Profit is not the only goal important to farmers; nevertheless, in general it is a major motive inciting farmers to produce. The individual farmer's desires, resources owned and/or controlled, type of farm, management abilities, family, etc., have very important effects upon profit maximizing and optimal organization or adjustments of farms. Richard Dayl refers to profit maxi- mizing under the above mentioned conditions as "constrained profit maximiza- tion.“ The programming model is patterned after the Lakes States Dairy2 model with more detail on hog and beef production and less on dairy. There are two major differences: (1) Private credit is added in the first phase of the model and (2) acquisition and salvage of major durable resources are added in the more complete second phase of the model. Glenn L. Johnson3 and lRichard Day. "An Approach to Production Response," Agricultural Economics Research. Vol. XIV. No. 4. U.S. Dept. of Agriculture. Econ. Res. Ser.. October, 19 2, pp. 134-148. ZDean E..McKee, "Input-Output Data, Linear Programming Model and Optimal Organization of Representative Farm Situations in Lower Michigan," Department of Agricultural Economics. Michigan State University. East Lansing. July, 1961. 3Glenn L. Johnson, "Supply Function - Some Facts and Notions," A cultural Ad ustment Problems in a Growin Econo , Edited by E. O. Heady. et. a1. (Amos: The Iowa State College Press. 1958). ll 12 Clark Edwards1 have developed the idea of resource fixity. V. E. Smith2 first attempted to apply the theory in a programming model. The idea of endogenous determination of resource fixity was treated in more detail by Hildebrand.3 The differences between the programming model in this study and others will become more apparent as this chapter proceeds. Formulating the Modgl The general research program for the Michigan NC-54 project makes use of a farm survey, linear programming, functional analysis, time series analyses, and "outlook type" work. The first two are reported in this thesis and the others will be combined with these at a later date and reported elsewhere.4 The details of the farm survey will be discussed after a presenta- tion of the general model within the context of which the survey was developed. The Linear Programming Phases The linear programming model in this study is referred to as Phase 1 and Phase 2. Phase 1 includes activities for crops, labor, hogs, beef cattle, dairy, and credit with land fixed at the levels indicated by the 1960 survey data for the representative farms. Phase 2 allows the farm size and lClark Edwards, Resgurce Eixity, Credit Availability and Agricultu_ral Orgagizatign, unpublished Ph.D. thesis, Michigan State University. 1958. , 2V. E. Smith. "Perfect vs. Discontinuous Input Markets: A Linear Programming Analysis," Journal of Farm Economics, Vol. 37, Aug. 1955. p. 533. 3P. E. Hildebrand. op. cit. “Michel Petit and Glenn L. Johnson are responsible for the other parts of the over-all study. 13 associated assets to vary, while an extension of Phase 2 allows further variation in the land resource. The model as defined in Phase 2 differs from Phase 1 only in that land, labor, and machinery resources are allowed to vary and the model selects the optimal level of these resources in Phase 2. This procedure allows the levels (supplies or stock) of these resources to be determined endogenously rather than following the more usual method of arbitrarily assuming them fixed. In other respects. the model for Phase 1 is identical to those for Phase 2. The theory of fixed assets1 incorporated into Phase 2 is as follows: An asset or resource becomes fixed when the following condition is met: Px acquisition 3 MVPx : P salvage, X where x.is the resource, ancquisition.is the price for acquiring more of the resource. Px salvage is the disposal price, andMVPx is the marginal value product of x in production. When the MVPx is greater than the acquisi- tion price for x, it is profitable to expand the use of x (or quantity of x varies upward). When the MVPx is less than the salvage price, it is profit- able to reduce the use of x (or the quantity of x varies downward). Hildebrand2 used this procedure and modifications in examining the stock-flow problem and the discrete unit problem involved when considering the possibilities of varying durable resources. 1Glenn L. Johnson. "The State of Agricultural Supply Analysis," Journal 9; £535 Economics, Vol. 42. 1960. pp. 44l-h51. and Clark Edwards. ”Resource Fixity and Farm Organization," Journal of Farm Economics, Vol. “1. 1959. PP- 747-759. 2P. E. Hildebrand. op. cit. l4 Assumptions and Background The NC-54 analyses are being carried out with 1970 as the target date and 1966 the focal point. Hence, the prices and conditions are assumed to be those expected to exist on the average for the period 1963-1970. The usual linear programming assumptions were made.1 In addition, the following assumptions were made for the model in this study: (1) Farm managers' present average managerial ability will be improved; (2) the cur- rently known and commercial applicable level of technology is assumed rather than just currently used technology; (3) the current credit institutions and methods of financing used for agriculture will continue; (4) all prices except those varied in the analysis (corn, hogs and beef prices) are projected to 1966 on the basis of current trends; (5) the input-output coefficients involved are consistent with the assumptions concerning managers and technolo- gies; (6) government price support, production control, and demand expansion programs will continue in essentially their 1962 forms; and (7) problems of inflation and deflation will not be considered. Different Approaches The problems associated with supply responses and adjustments in agriculture can be and should be attacked from several angles. Many approaches have been employed by investigators to seek answers to such problems. Among these techniques used, the following are the most important ones: linear programming, budgeting, aggregate time series, functional analysis, and out- look and projected trends. Linear programming is the one examined in the 1E. R. Swanson, "Programming Optimal Farm Plans: in Farm Size and Output Research," Southern Reg. Coop. Series, Bull. 56, June, 1958, pp. 47- 57. 15 paragraphs which follow. What are some of the strengths and weaknesses of this approach to studying supply and adjustment problems in agriculture? The brief critique which follows is not necessarily aimed at the linear programming technique itself but at previous applications of the technique. Careful study and evaluation of past studies, which have employed this technique, warrant the general conclusion that many studies have been unrealistic. How have studies using linear programming been unrealistic? The following is a partial list of the shortcomings and some suggested I improvements in the application of this technique. 1. Many inputs or resources (at the micro level) have been assumed fixed when.in reality it would be economic to vary their use. Among the variables (inputs) which researchers have assumed unrealistically fixed are: land, capital assets, and working capital. Also, applications have not made sufficient allowance for hiring different kinds of labor (including managerial labor) and selling different kinds of labor (operator and family labor). This problem can be overcome, in part, if the program is permitted to determine endogenously which inputs should be fixed. 2. Applications have not taken into account the full range of credit opportunities and the cash flows within the year (period of time in which the farm.operations are carried out) for the farm firm. When the use of these resources is restricted, the adjustment potential is limited. 3. Applications have been based on commercially available modern technologies and methods but not necessarily those that farmers, in general, were adopting and using. 4. The magnitude of the solutions for many activities goes beyond the assumptions of the model and the coefficients, i.e., output levels are n0t»in the range assumed for the input-output coefficients. 16 5. The optimal organizations as indicated by linear programming analyses often result in fractions of inputs and enterprise levels which are impractical, i.e., the problem of non-integer solutions. There is a method, integer programming, which is being developed that will partially overcome this problem. 6. Many of the activities used in programming problems are mutually dependent, which may lead to impractical combinations of enterprises in the programmed optimal organizations. This list is not exhaustive, but is an indication of some of the more perplexing and important shortcomings. Clark Eiwardsl has presented some of the shortcomings of linear programming and classified them according to their origin. The first two of the above list are partially treated in Phase 2 of the model, defined in Chapter IV. Research Methodolog The problan under investigation and the objectives of this study were delineated in Chapter I. In order to answer questions and attain the object- ives, it was necessary to collect and/or assemble the data needed to analyze the situation. Sources of Data Although the problem being studied determines the kinds of data needed, the form and extent of the data may vary with the type of analytical techniques employed to do the analyzing. Since linear programming techniques are used in this study, data were required on farm organization, production, lClark Edwards, "Shortcomings in Programmed Solutions to Practical Farm Problems,” Journal of Farm Economics, Vol. 43, May, 1961, pp. 393-401. l7 and resources. There are several sources for some of these data such as: Michigan Farm Mail-in-Account records, previous farm adjustment studies, farmers themselves, etc. Major reliance had to be placed on surveys as this was the only source of current data on representative farm situations that had a measure of statistical accuracy. The farm resource, production and organi- zation information were obtained by surveying farmers located within the study areas. (See Figure 1 for the delineation of the areas studied.) The extensive and detailed enterprise budgeting information needed for constructing the input-output coefficients was difficult to obtain. Thus, budgets and technical coefficients underlying the linear programming model were either (1) assembled and synthesized from information gained from meet- ings with personnel from the applied and technical agricultural sciences or (2) obtained from research publications (the credits and sources for such information are given in Chapter IV under the specific information presented). Sample and Sampling Procedures The population from which the Thumb and South Central samples were drawn was defined to include economic class I through IV farms as defined by the U.S. Census1 in 1959, excluding specialized poultry, truck, fruit and horticultural farms. The farms surveyed from this population furnish the information for defining the representative farms used for programming in this study. The population was stratified before the samples were drawn on the basis of geographic area for the purpose of taking into account dif- ferences that exist in soils, type of farming, and metropolitan influence on 1These included all farms with value of gross sales exceeding $2,500. Poultry, fruit, truck and horticultural farms were excluded if over 50 per- cent of their farm sales were of these products. 18 agriculture. These and associated factors are assumed to have significant effects upon adjustments in the feed grain-livestock complex. The Thppp.area population from.which the sample was drawn consisted of a set of townships that not certain soil specifications. The general criterion for inclusion in the survey was that the soils be adapted to cash crop farming (see Chapter I, Areas Studied). Selection of the soil series to be included was made in consultation with personnel of the Soil Science Depart- ment of’Michigan State University. If at least 70 percent of the farm land area (exclusive of urban areas) in the township were adapted to cash crop farming, the township qualified for the universe. The sampling rate or quota was set by the NC-54 Research Methodology Subcommittee. In order to describe adequately the farm.population for any sub- area in a state, the Subcommittee stated that at least 100 farms would be required. Since the number of townships needed to meet this sample quota was very small, the townships meeting the soil specifications were divided into four groups of equal numbers. This permitted uniform geographic sampling of the area. From each group of townships, two townships were drawn at random, i.e., eight in all. Within each selected township, two area segments compris- ing two contiguous square miles each were drawn at random. All farm.operators whose farmsteads fell'within.this sampling unit and whose operations met the other criteria, outlined above, were interviewed. Another specification allowed further sampling if the 100 farms were not completed by the time these sampling units were surveyed. This specification was to repeat the same sampling procedure used to obtain the first sampling units. The qualifying townships are listed by county in Table 1 in Appendix A. The South Cppppal population, from.which the sample was drawn, con- sisted of counties with soils adapted to growing feed grains and cash grains 19 (see Chapter I, Areas Studied, for the soils included). The specification necessary for the counties to quality was the same as for townships to qualify in the Thumb area except that the percentage of farmland adapted to cash crops was set at 60 percent instead of 70 percent. The qualifying counties are listed by state in Table l in Appendix A. The area sampling procedure was not used for the South Central area. The Thumb survey was coordinated with another M.S.U. study, and the South Central survey was coordinated with the Indiana NC-54 study. The sampling procedure for the South Central area could have been used for the Thumb area; however, A.S.C.1 records were used for the South Central area sampling to be consistent with the sampling procedure used by Purdue for the northeastern Indiana area. In the South Central area the farm unit basis sampling procedure was used. A list of farms by counties was available from the A.S.C. records. These records are arranged alphabetically by townships moving from.the north- east corner back and forth to the southeast corner of the county. The town- ship in which to start was selected at random, as well as the first farm to sample within the township. The number of schedules or farms needed, by size category, was specified before the samples were drawn. In order to meet the Regional specification (that farms should be stratified by size and type and no cell (size-type) should have less than 10 farms) 1954 and 1959 U.S. Census of Agriculture data were inspected. That inspection indicated (1) a scarcity of farms over 200 acres in size in the South Central area, (2) that farms were approximately equally divided among cash crop, dairy, 1Re£ers to Agricultural Stabilization and Conservation Service, U.S. Dept. of Agriculture Records are in the county offices. 20 and livestock, and (3) the size distribution of farms varied by counties. It was decided to draw a random, disproportionately stratified sample with respect to size of farm but proportionate with respect to type of farm. The disproportionate sample was to be drawn by first sampling propor- tionally until the expected required number of farms was obtained for the two Smallest farm size strata, less than 100 acres and 100 to 200 acres, respectively. After these strata were filled, further sampling was to con- tinue until the expected minimum number of farms was obtained for the statum above 200 acres in size. However, as the surveying progressed it was found in.most counties that, unexpectedly, the large farm strata filled first and the small strata filled last. This indicates that farm consolidation has been progressing rather rapidly in the South Central area of Michigan. The South Central sample quota or size was determined to be a minimum of 150 farms, with 100 from.Michigan and 50 from Indiana. One hundred qualify- ing farms were drawn from.Michigan and 58 from Indiana. Schedule and Interviewing 1 was developed to be used in collecting farm.manage- A survey schedule ment and production information from the farmers. The main.data needed were resource inventories, production patterns and expenses. The questions were open-ended and arranged according to major resources. These data were col- lected by personal interview with the farm operators. The interviewing was done by this researcher and other Department of Agricultural Economics per- sonnel in the summer of 1961 for 1960 data. Schedules were completed and edited in the field. If a farmer were not at home or could not grant the lA copy of the schedule used in this study is included in Appendix C. 21 interview at that particular ttme, the interviewer was to make three return calls. If the schedule had not been completed by then, that farm would not be a part of the sample. Refusals had more effect on the sample in the Thumb area than in the South Central area because there was no procedure for replacing farmers in the Thumb area who refused to be interviewed. Also, a farmer who refused could affect responses from others in that two square miles sample segment. Since the farms were close to each other, the farmers who refused might talk to other farmers and influence their answers to ques- tions and/or their decision to cooperate with the survey. In the South Cen- tral sample, if a farmer refused to be interviewed, the next farmer on the list was interviewed. A refusal rate of approximately 5 percent was experienced in the Thumb sampling. In the South Central area, the refusal rate was.much lower but was not calculated. Coding, Tabulating, and Use of Computers After the schedules were completed and the surveying done, the data were coded and tabulated for IBM punch card operations. The resource invenp tory'infbrmation was used to derive resource restrictions for representative farms. The production patterns and.major enterprise information were used to classify farms by type. The production, inventory, investment and expense data will be used in performing functional analysis. The information on punch cards concerning major farm characteristics was compared in order to seek further stratification of farms. The linear programming computing was carried out on the Control Data Corporation 1604 computer at Minneapolis. CHAPTER III DEFINING REPRESENTATIVE FARM SITUATIONS This chapter presents justifications for using representative farms in this linear programming analysis which is followed by a discussion of variables used in delineating representative farms. In the next section, some cautions are indicated that should be helpful in setting up representa- tive farm situations. In the final section of this chapter, the representa- tive famms delineated in this study and their 1960 resource bases and enter- prises are presented. In carrying out the linear programming analysis in this study, it was necessary to define representative farm situations. The method of programm- ing representative farms was chosen because: (1) The cost of programming every farm would be prohibitive; (2) even though the solution to a represent- ative farm may not be applicable to a specific farm, the representative farm probably has characteristics that allow the solution to be an approximation for many farms; (3) it allows a questionable degree of aggregation of results; and (h) it can be used to estimate points on a supply relation which can be aggregated with others to furnish some information about the aggregate supply relation. ortant Variables when defining the representative farm situations, it was essential that the farms be grouped on the basis of the most crucial factors that affect adjustment. 22 23 A priori stratification of farms in this study was made on the basis of land area since the quantity of land was believed to restrict adjustment possibilities. The Thumb sample was classified by total acres of land operated in 1960 into the following size groups: 120 acres or less, 121 to 180 acres, and over 180 acres. The South Central sample was stratified by size of farm before sampling, also. The size of farm for this area was based on total acres operated in 1960, using the following breakdown: less than 100 acres, 100 to 200, and over 200 acres. The differences in the farm size categories for the Thumb and South Central areas stem from the institu- tional arrangement of 40, 80, etc., parcels of land in the Thumb and the Census classification of farm sizes used for the South Central area in developing the sampling procedure. Initial type of farm also restricts adjustment possibilities for farms since resources, skills and information are not perfectly substitutable from one enterprise to another. Several other variables are important when defining representative farms such as: age of operator, education, family labor force, operator off- farm job, not worth, etc. In addition to the above mentioned variables, credit, preference of the farmer, etc., are important. If one decided in advance of sampling that some other variables were more important, a more detailed classification than used in this study might permit more accurate estimation of responses. Nevertheless, the method of defining representa- tive farms would still have the problems of applicability and aggregation of the results. Orlan Bullerl in.his study of fruit farms in southwest and 1Orlan Buller, The Effects of Changes in Technology and Increasing wage Rates on the Organization of Tree Fruit Farms in Michigan, Ph.D. thesis in preparation, Dept. of Ag. Econ., Mich. State Univ., 1963. 24 western lower Michigan has used other variables than those used in this study to classify the farms. He stratified farms by age of operator, size of family labor force, and net worth as a major determinant of farm size in order to obtain representative farm situations. His central objective was to evalu- ate the effects of changes in technology and increasing wage rates on the organization of tree fruit farms. Using Representative Situations in Analyses Even though the use of the representative farms permits limited statistical aggregation and flexibility in application, there are many unrealistic aspects associated with its use. It becomes impossible to group farms such that no important factors vary significantly within the class. For example, consider a Large Cash Crop representative farm (classified by size and type). The farms making up this "statistical average" farm.may vary in such ways as (1) one farm.may have 100 acres of sugar beets and the necessary equipment and none of the other farms making up the representative farm has any, or (2) five farmers in the stratum may be over 65 years old and the others less than 30, or (3) two farmers may have 100 tons of silo capacity and the others have none, or (4) net worth may vary widely and, hence, ability to finance adjustment varies, etc.1 Unrealistic situations which result and response information may need careful interpretation. When essential variables that would have the greatest effect on responses are omitted while classifying farms by size and type alone, the answer or response given by the programs will be incorrect. Hence, the usefulness of such representative farms in analysis is limited for predicting agricultural 1In many cases, these situations can be removed or "averaged out” by increasing the sample size. 25 adjustment. Thus, such considerations must be taken into account when interpreting the programming results of this study. Re resentative Farms Delineated in This Stu The representative farm situations defined in this study are: Small, Medium and Large Livestock farms; Small, Medium and Large Cash Crop farms; and Small, Medium and Large Dairy farms. Farms (by U.S. Census classification) were grouped into the three types on the basis of the main enterprise or the enterprise contributing the largest percentage of gross income in 1960. In all other situations, if at least 50 percent of the 1960 gross income came from livestock or cash crops or dairy, the farm was clas- sified as that particular type. The above classification of farms by size and type outlines the representative farms in this study. Data from farms making up these classes (cells or strata) were used to determine the initial resource restrictions which define the representative farm situations. Thus, the representative farms delineated in this study are defined by size and type, while the resource restrictions are the statistical averages of the resources used by the farms falling in the size-type classification. Another defining character- istic used was the enterprises found on these farms in 1960. In the Thumb area, not enough observations were obtained on live- stock farms to have a class of such farms. Only four livestock farms occur- red in the sample. The dairy cells (size by type) had only seven farms each which was less than the specified miniumum of 10 (every representative farm stratum was supposed to contain at least 10 farms to be adequate to describe the agriculture for that group). With this being the case, the Small and Medium Dairy cells were grouped to form a representative farm situation. The 26 size-type classification for all qualifying farms is presented in Table l which follows below. TABLE l.--NUMBER OF FARMS IN EACH SIZE-TIPE-AREA CLASSIFICATION Type : Thumb-Saginaw Valley Area : South Central Area of : Size of Farm, Acres : Size of Farm, Acres Farm :120 or less:lZl-180:overl80: less than lOO:100-l99:200 and over Cash Crop 30 24 21 10 18 16 Livestock l l 2 12 17 18 Dairy' 7 7 7 10 27 30 .Many enterprises and farms were considered to be atypical and would not have any appreciable effects upon supply responses of hogs, beef cattle and feed grains. These were dropped from the analysis. The enterprises not considered were specialty crops, poultry, sheep, nursery crops and specialty livestock. Likewise, specialty farms were excluded. When inventories of specialty crops and livestock occurred on the qualifying farms, these were liquidated and their value was made available as cash for that farm in the programming analysis. Enterprises and Resources The enterprises on the various representative farms are related to the type of farm. There were differences with respect to crops grown in 1960 from.one type of farm to another. In the Thumb area, the largest crop acreages on cash crop farms were (in order): (1) dry beans, (2) wheat, (3) corn, (h) sugar beets and (5) small grains. The Dairy farms had higher proportions of their land in corn and hay than did the Cash Crop farms. A comparison of crop and livestock enterprises by representative farm situa- tions for the Thumb area is presented in Table 2. 27 TABLE 2.--ENTERPRISE LEVELS BY REPRESENTATIVE FARMS IN 1960 - THUMB AREA : Unit : Cash Crop : Dairy : : Small : Medium : Large : Medium : Large Crops Corn Acre 9 14 41 22 73 Sugar Beets Acre 6 13 18 1.5 10 Other Row Crops Acre O l 2 l O Soybeans Acre 4 3 6 4 0 Dry Beans Acre 39 64 91 7 53 Wheat Acre 15 22 39 ll 32 Small Grains Acre 6 l4 16 10 29 Hay & Rotation Meadow Acre 3 10 15 41 111 Livestock Dairy Cows Number 1 l 6 21 41 Sows Number 1 1 1 2 O Feeder Cattle Number 0 2 4 2 7 Beef Cows Number 0 O O O O Laying Hens Number 59 19 58 72 0 Land Rented In Acre 19 58 154 30 101 In the South Central area, the principal crops (measured in acres) on the Cash Crop farms were, in order: (1) corn, (2) soybeans, (3) wheat, (4) hay and (5) small grains. Again, the Dairy farms, as well as the Live- stock farms had higher proportions of their cropland in corn and hay than did the Cash Crop farms. The data for crop and livestock enterprises for the representative farms in the South Central area are presented in Table 3. The resource inventories on these representative farms are considered to be more important than their enterprises. It is not too difficult to shift from growing corn and hay to growing more soybeans, but it is difficult to convert dairy facilities to beef or hog facilities. Thus, the resource inventories are expected to have a substantial influence upon the extent and 28 aoH Nm HN oaH oN N HoH mm o oaoa nH ooeoom onoH mN 0N Hm ooH HN NH mom NNH Nm nonaaz meow moHaoH o o o H o H e a m nonasz £60 .38 a H o N o c we HH oH aonaaz oHaooo aooooa a m m N N H oH NH NH nonnaz anon mN «H NH N N H m N o noose: onoo auHoo x3333 Ho 3: NN a: oH n we Nm mH oao< noooox _§flfiéea£ on «H o NH HH o 5N mH N oaoa noHono HHnam nN mH m mN mN nH Nn «H a oaoa noon: H o o H m N m o o oaoa aaoooago n n m an NH nH HH n n oaoH nooooaom H o o H H a o N o oao< neoao non tango «a on mH aHH Nn nH aHH ma oN oaoa. . oaoo mmmmw o nag “ .eox " HHnam " o non " .ooz." HHnam u o nae " .ooz_a-HHo-m a a A fl] “ it a. one a 83538 a go Eon ”a 3m 08H 2H g4..— Efififlufi Hm g umgfillé an. 29 kind of adjustments which can be made. The resource situations, by representa- tive farms, are presented in Table 4 for the Thumb area and in Table 5 for the South Central area. . Both the quantity of a resource and when the resource is available are important. Thus, labor is broken down into periods 1 to 6 where: Period 1 - December, January, February and March Period 2 - April and May Period 3 - June and July Period 4 - August Period 5 - September to October 15 Period 6 - October 15 through November 30 This breakdown is based on the seasonal work pattern of farms growing cash crops. An attempt was made here to group the labor such that crucial and slack periods would be more distinct. Periods 2 and 3 are the planting, cultivating and wheat harvest times. Periods 5 and 6 make up the harvest season and fall planting time. Periods l and 4 are usually the slack periods. The levels of the resources in every case, except for hog and beef facilities in the Thumb area, are based on farm averages. In the cases of hog and beef facilities for the Thumb area, the restrictions were calculated on the basis of the buildings and facilities present on the farms, because in most all instances, there were no livestock (other than dairy) but there were always buildings and facilities. The annual cash restriction is the not available for farm operations. Appropriate charges have been deducted for living expenses, annual short term and long term debt payments, and real estate taxes. The labor res- trictions have been reduced by the amounts of labor used for overhead in 30 TABLE 4.-HRESOURCE RESTRICTIONS FOR REPRESENTATIVE FARMS - THUMB AREA : : Cash Crop Farms : Dairy Farms Resource Restrictions : Unit : Small : Med.‘ Large : Small- : Large ° : : ,- : Medium : Bean Acreage Limit Acre 31 44 52 38 121 Corn Acreage Limit Acre . 31 44 52 38 121 Permanent Pasture Acre . 2 3 16 8 ‘ 46 Sugar Beet Acreage Limit Acre ' 6 9 9 ' 2, 9 Wheat Acreage Limit Acre 14 15 17 ll 25 Annual Cash Account $ 272 2,237 8,228 2,393 7,837 Real Estate Mortgage $ 14,169 16,623 17,624 12,466 40,358 Chattel Mortgage g 2,272 2,605 4,685 4,472 10,707 Private Credit 2,300 2,100 5,300 2,300 3,800 Farm Labor Period 1 Man hrs. 1,053 1.252 1.646 1,348 1.969 Farm.Labor Period 2 " 514 608 795 609 891 Farm Labor Period 3 " 618 670 870 654 972 Farm.Labor Period.4 " 311 350 487 329 469 Farm Labor Period 5 " A 384 429 572 422 600 Farm Labor Period 6 " 375 ‘ 422 581 429 622 Operator Off-farm Work Hours 1,264 563 613 446 0 Family Off-farm.Wbrk " 201 683 1,556 340 934 Cropland Acre 62 89 105 76 242 Fewer & Tillage Capacity Acre Cap. 243 _ 278 427 282 411 Grain Harvest Capacity " 81 108 121 76 113 Corn Picking Capacity " _27 28 61 57 95 Silage Harvesting Capacity " 2 6 - 12 14 29 Hay Harvest Capacity " 13 29 29 71 100 Sugar Beet Harvest Capacity " 10 25 38 19 14 Sugar Beet Transport Capacity ” 9 16 23 10 27 Silo Capacity ' Tons 10 27 ' 64 103 242 High.Moisture Crop Capacity Tons 0 0 27 27 119 Beef Housing Animal 6 9 10 5 5 Beef Feeder Lomeechanization " 6 9 10 5 5 Beef Feeder High " " O O 0 O 0 Beef Cows Head 0 O 0 ' O 0 Milk Cows " l 1 10 22 41 Dairy Facilities Cow' 0 O 4 25 38 Central Farrow Sow 2 3 3 3 2 Portable Farrow’ Sow' 0 O 0 O O Confinement Finish \ Head 14 18 54 14 12’ Portable Finish . Head 4 4 8 0 0 Milking Labor .Man hrs. 1,253 1,418 1,868 1,442 ' 2,048 Managerial Labor Oper. hrs. 2,604 2,948 3,879 2,995 4,253 Land Rented In Limit Acre 19 58 154 30 101 31 o o o H o H o o o o o o m m o eaH b m m m o aH b m NOH mN aH 3N o o emH on N: an me o 50H Nm HN bmH bN N mOH mm on He no mm on He on no NN 0H mN b m b n 0 we no No NmH mm on we NN om NHH 50H on mam bHN HrH Nam NHN oaH mmH am an aoH OOH on man HeN o Heb arm mm: one man 3N0 one amm.H ema.H NNm arm awn ea: no: men eHm mos mmm was man man mam emN emN emu NmN me mam orb ONn web own New Nma arm mHm Heb bow on“ moe.H omH.H mmo.H HNa.H amo.H anH.H ooa.N ooH.N 000.: 00H.e ooa.N oom.N aHH.e mHm.N NeH.N amm.a omm.H mbH.H mom.ON mam.OH mmm.a mmH.mH bnm.eH oaN.oH ONa.N mmH.e mmm.H amH.a mma.n mom rH mH a nH mH mH we a: mN an on on ma ON m an mH 0H rm Nm ON on an 0N Nm Nm ON on an oN macaw ",wwmz " HHNsm omqu A .voz A Hanan magma hmmmmli or mm mm HHN HbH am an NH mNH mHH NHm maH NmN mom mam bmm NmN Hmm awn aNH coo Nmm owe 3am mN me no m: cm: amo.H ooa.N aNm.N NNo.HH oab.a mH an bN mm mm. .H .e .a .2 .NH manna mayo amen ON ON ON on b an aH 0 am an bmH no so: oao.H 0mm ONm mNN we: no: mam . coo.N mHH.H mom.m omN.e a mN mH o you A .voz " Hausa match xoopmo>dg " ono< mzoo moom coHpeNHcenooz amHm noooom Hoom :oHaeNHcenooz seq nooooh Hoom mchsom moom muHomdmo mono onspmHoz_anm auHoeaeo oHHm QHSHA ca been peer eHaHH mono :om hpdowmeo pmo>aem hem .dmo depmo>nNm omNHHm .mmo mconHm caoo .dmo emoehem cameo .mmo omNHHHa e hozom uceadoao rao3_enoa-eeo aHHeea madam rho: seemamwo nopeaodo = a a » ono< oaod oao< oao< oao< oHeo .- .man Caz o ooHaoa n eoHaom a eoHaoa n eoHaoa gonna Bush honed seem aonmq shah gonna Show N voHnom henna such H dodged aonoq anew pfiooeo opm>aam omemeao=.Hoeeeno owmmpaoz.oaeema Hdom vcdooo< Ammo Headed pagan omeoao< neon: panda cameo Harem oudvmem ecoaddhom eased omeoao< choc aHaHA oweouo< deem. 4| 0‘ )2. Clue coHveHupmom oonsomom HHdq each H :OHNOHHpmom condomom eoaeHreoo--.m agree 33 operating the farms (see Table 2 in Appendix A for the overhead labor require- ments). The initial resource restrictions for cash and different sources of credit were estimated as follows. The annual cash resource was composed of cash on hand, near cash assets, and feeder livestock and crop inventories valued at current prices. Value of breeding herds was excluded from this variable. Also, any debts against crop and feeder livestock inventories were subtracted from the annual cash resource. The initial amount of the real estate mortgage resource was estimated at 50 percent of the current value of land holdings minus any outstanding debts against such assets. If the farm.were owned outright, the model allowed real estate credit equal to 100 percent of the land holdings if only other real estate were purchased. The initial level of the chattel mortgage resource was defined as 60 percent of the current value of breeding livestock plus 50 percent of the current value of the machinery inventory less outstanding debts against such livestock and machinery. The private credit resource was defined as the funds that farm operators thought they could borrow from individuals, exclusive of public credit institutions "over and above" amounts that could be obtained from all public sources of credit. The initial level of this restriction was the simple average of the private credit that farmers thought they could acquire. The level of the restriction on land contract credit was determined by the value and characteristics of land for sale by land contract. A further explanation and the functioning of these credit resources will be presented in Chapter IV. CHAPTER IV THE LINEAR PROGRAMMING MODEL Farm adjustments involve changes in farm size, as well as changes in enterprises. Two general types of adjustments may occur: (1) intensive and (2) extensive, and a third may be more likely, which is a combination of both 1 and 2. The intensive adjustments involve investment and expansion in live- stock enterprises. These adjustments entail the use of capital for expanding the hog, dairy and beef cattle enterprises on existing land area. At the extensive margin, adjustment is made by expanding land operated or farm size. Farmers may increase farm size (land area) by renting additional land and/or by purchasing additional land. Whether or not a farmer can and will acquire additional land depends upon several economic and non- economic variables that surround the acquisition of land. Land may be unobtainable by a farmer. First, tracts must be reasonaly accessible to the farmer to farm and economic to acquire. Second, the mobility of land associated durable resources is also an important factor in farm expansion and contraction. There are many other important factors which influence changes in farm sizes. When one farm expands, another or other farms must be contracted or disappear. Thus, farm adjustment studies involve changes in farm size and farm.numbers. Adjustments along the intensive margin, where the land area per farm is fixed, are studiedin Phase 1. Phase 2 considers the same activities as Phase 1 plus additional ones dealing with varying the land area. The only essential difference between the two phases relates to the activities and 34 35 restrictions associated with acquisition and disposal of land and associated durable resources. This will become more apparent as this chapter progres- ass. This chapter continues with a discussion of price projections and products studied. Following that, activities, coefficients and resource requirements are presented and discussed (by major groups of activities) for each phase and each area. In each section of the chapter, some of the dele- tions and differences in the model for each phase are discussed by areas. Products and Prige Projectionsl The principal products being studied are corn, hogs and beef cattle. The prices of all products and inputs, except corn, hogs and beef cattle, are projected prices for the period 1963 to 1970, with 1966 the focal point. These projections were made on the basis of current trends. The prices for inputs and products are presented in Table 5 in Appendix A. The corn price was used as a basis in estimating hog and beef prices. On the basis of current feed grain supplies, the position of the Federal Government with respect to corn prices and the positions taken by various farm groups, it seemed unlikely that the corn price would rise above the 1961 support price level of $1.20 per bushel. The high corn price (average national price) was set at $1.20. The low corn price was set at $.80 per bushel; this is near the free market price projections contained in the Ellender Report, Senate Document No. 77.2 The middle price for corn was set 1J. N. Ferris of the Dept. of Agricultural Economics of Michigan State University was very helpful in the process of developing these pro- jected prices. 2Report from the U.S. Dept. of Agriculture and a Statement from the Land Grant Colleges, IRM 1 Advisory.Committee on Farm Price and Income Projecgigns, 1960-65, Senate Document, 77, 86th Congress, 2nd Session (Jan. 20, 19 0 . 36 halfaway between these two extremes, at $1. Using these national prices, prices for each studied geographic area were computed on the basis of the differentials. The 1961 price support for corn in the Thumb area was four cents above the national support price. Thus, the three assumed price levels for this area are $1.24, $1.04 and $.84 per bushel. The 1961 price support for the South Central area was two cents above the national support price which leads to prices of $1.22, $1.02 and $.82 per bushel for this area. Hog prices were derived by using the above projected corn prices times the 1955-60 average hogmcorn price ratio of 14.8 to 1 (based on Chicago prices for barrows and gilts). This period was chosen for two reasons: (1) The period reflects one complete cornuhog cycle and (2) the period reflects recent seasonal marketing and price patterns. The hog prices were then adjusted by seasonal, quality, class and geographic differences based on historical patterns. In addition, adjustments were made for marketing charges. The resulting prices were $16.57, $13.73 and $10.89 per cwt. for the Thumb area and $16.82, $13.98 and $11.14 per cwt. for the South Central area. The projected beef prices were derived by the same procedure with an average beef-corn ratio of 20.8 to 1 based on the 1950 to 1960 period. The national average corn price and the Chicago price for choice steers were used to calculate the ratio. Seasonal, class, marketing charges and geographic differentials were used to adjust the prices. The resulting prices were $24.31, $20.20 and $16.08 per cwt. for the Thumb area and $24.56, $20.45 and $16.33 per cwt. for the South Central area. Phase 1 of the Model Phase 1 of the model treats land and associated resources as fixed. The linear programming model used for the Thumb area differs from the one used 37 for the South Central area in the activities associated with crop production and the sale prices of corn, hogs and beef. The costs of renting land and hiring seasonal labor differ, also. Since this is the case, the model for the Thumb area (hereafter referred to as Thumb model) will be presented and only the differences in the model for the South Central area (hereafter referred to as South Central model) will be given. Thumb Area The model is presented by the major activity groups such as crops, etc. The activities, resource requirements and net revenues are discussed and presented by sections of the linear programming Tableau (the Model). These sections are presented as numbered tableaus throughout this chapter. All blanks in the tableaus refer to zero entries or coefficients. Crop Actiyitigg} The crop and crop transaction activities included in the Thumb model are dry beans, corn (which can be harvested for grain, as high moisture corn, or as silage), buy corn, sell corn, produce meadow (which can be grazed by livestock or harvested as hay), substitute hay for pasture, buy hay, sell hay, product oats, sugar beets, and wheat. The activities and their resource requirements and net revenues are presented in Tableau I. In all tableaus, negative signs in front of revenues indicate incomes and no signs indicate costs, while negative signs preceeding the coefficients within the tableaus refer to adding to the resource and no signs indicate using the resource. 1The crop enterprises and input-output coefficients were developed through seminars and consultations with K. T. Payne, M. H. Erdmann and S. C. Hildebrand of the Farm Crops Department and L. S. Robertson of the Soil Science Department, Michigan State University. 38 wm.m woos omenopm oedpmHox.anm Hm NH om.m aeoe AeHooooo oHHm om H H moNoH pHsHH doao 30m mm H H H mono< vcdeouo em mm.N .. A. w .Um om mo.m NN.m oo.N = = m .om 0N Omofl A. : .3 20m mm named 00!: H. = m Jam KN ow. mw.m mmoN = A. N .U& mum ii¥--l|\ = = H oUnH “N ow. mo.m NN.m mm.N mm.m HN.0H new so: poowH Hescc< :N mo.m mo.H mN.r 0N.r am.m no.0H mm.: A aaoo mH mo.m mo.H ma.a 0N.a NN.H no.0H em.s A HeoHoeo aH mono< HHEHH ammono< pwon3 MH moao< Homapooo poem Hewsm NH mono< HHSHH omeonod poo HH moor eHeHH aoHem ear OH woos mucon>Hdwm hem m H5 moeo< sooooz.onprom m monoe oadpmmm psonesnom m H 00H: .:m HHEHH moHNm :uoo o wHu mcoa ommHHm choc m on. om.a mm: mm: .930 pcoHe>Hdwm 2900 e H H H H: moao< Howmcdna choc mcHocmpm m H moao< pHsHH ommono< cnou N H moped pHBHH omeonod deem H ofim 35> 33> 3.: 8.: $6 mfifi omfim- w osco>om oao< A .sm A .sm A oao< A oao< A ouo< A oped, A oao< A A A A A A A A - A A A A A .02 sovmmzA mm A rm A mm AoudNMHozA mm A Nm A Hm A pHco A coHudHuomoQ A coHH coHpAenoo A enouA ommHHm A anm A :Hwao A :Aoo A mdwom A A A nodvm tepomAHHem A 55m A caoo pmo>hem AmcmmcopmA A A A 1“] «mad mzbma I H mmdmm mam mmHHH>Hao< momUII.H DHeoa arm a H H moao< soomoz cofigom m Ha NI moho< ondvmem unoceaaom m 0:: .dm HHEHH moHem Chou o mcoa owNHHm choc m 0N.mN- .pao menoHe>Haom neoo a moped pouncepa choc mcanNpm m mouod pHaHH omeoao¢ choc N moao< pHaHH omeono< deem H No.3- 49%? No.3 8.3.. OGON o 36 o A mpg oao< A oao< A oao< Awlmoa A :09 «A Adda A ouo< Ammmm¢ 7W1- A H, weal A .I A A JfllhlnwrvA NH A All A o A A A :OHH NHm A mmMAon A mHm A Mom A hm“ A ohsvmwm A mm A zovaoz A .525 A aofimfinomon A long names A ammdm A mono A HHom A hem A How arm A vmo>aem A onuc A A A boschcooII.H Dgom 530 AH NNN NN.N ANN NN.: a A BEEN been A been A teen A each use: A econ A teen A beef” boo A A A NNAA . Had A N1 d A oNd Nod A Sm A of A “Nd 3 A A . 62 N .Aed H .NAAA porno A N eoHaod H Noted A Noaeomon A 233d A NoHE. A flmm A one A eofidfloooo . no.3 3A «Hoe 4493A ioBJmHWMHNIIIIIA :8. A A {deem J3? A A. mean A A man—.9304 E40 Emil: pg 45 HNN- 3N- HA- HN.N.. SN. 8.9 He. 3.8 ooHdN noon mm Noon 933 noon Nm I N .8 I I I N.“ I H .2 I I g mm mm. “0. mm. mm. mm. I N .a I I I mm mm. no. no. mm. mm. .. H .26.; new! ASH an NN. no. no. no. no. .. N .8 NaneoN noon mm NN. no. no. NN. no. 3 H .2 NeHneoN Noon Nn emH NN. $.H no.H NN. . no.3 N Based on 23 NN. 93 mm. NN. .. no.3 m .8th N 8. cm. om. Hm. om. .. no.3 e conned NN NNH 8H NH so. 8H .. n3 n Benet NN emH NN. NNN emH NN. 8H NNN . no.3 N Noted NN Nna NNN Nnd 3N NON . no.3 H Noted mN NN.N NNA Nod NN.n NN.“ 8N NnN one on: no.3 3.3 ._N 8.3. mm. NN- 8.8.. H33. made. HES. HRS. « Anemone: Hopped NH » touts. 83am Hooe NH $.HN NN. NN NN.? NH.Nm 8.Nm NN.NN NeHN ». been NH NNHN NNNN 8.8 NH.Nn 8.Nm NN.NN NeHN N 338 .AH RH RH NNH NmN neon. nonoHopfiem 3 N H honed 053m Hang N. we... no... RN neon. oonHm 58 n NN m NN N omNH 8 NH to fleoHoeeeAm E8 in NNHH mmHH wNéN HnN HwN Ho... HeN e BEEN Neon A noon A soon A neon A Neon A Neon A neon m& A A Jig A “New A #E A AN? A A A .0: N Noted A H eoHnod .3 A AN eoNNAHnod H eoHnon A Seemed A eoH A one A 833.88g A non. oNNHHnooH noHHnlo .36 and» ASHE A 3 A 3 A A Team 6058...: . AH ugh Noon :8 noon 8 HH.... 3.... NN.HH. HHé. NH..H. NN.NH- NN.NH. NN.HH. ..to 81m noon N... H H H H Neon 858 noon NN NN. NN. NN. NN. NN. NN. .. N .E . . .. NN NN. NN. NN. NN. NN. NN. .. H .E .. .. NNHN NN I N .3 I I I M“ . H .8 .oen been 3 ..N N NN. NN NN. NN. NN .. N .8 esteem noon R N NN. NN NN. NN. NN Honda H .8 esteem noon NN no H 8. no H .N. NN. oN ... no.3 N .8th on NN 8. «N. NN. NN. oN ... .883 n earned «N 8 8. 8. NH. an. oN .. no.3 A. eeHnon NN NH H NN.H NHH NN. NN. NN.H .. no.3 n eaten NN no H NH. NNH 8H NH» HN. NN. NN.H . no.3 N 33 NN NN.N RH NNN No.N NN.H NN.H .. no.3 H eoHnom NN NN. N Anna N. N in AWN NN.N NH.N NeN 625: no.3 Hess: ..N No. NN. NN.NN. NN.NN: NN.NN: m omemenom H336 NH tomato: 33am 3 NH No. NN HN.NN NN.NN NN.HN NN.NN NHN NN. N NN.NH N 3 NH NN.NN HN.NN NN.NN NN.HN NN.NN NHN N. N NN.NH N. 3R8 H mm. HN. HN. NN. AN. 3. neon 381.55. 3 N N H mound gamed as; h HH.N HH.N NN.N neon oNeHHN eneo N NN.NH NN.NH NN.NN NN.HN NN.HN NN.NN NN.NN NN.NN ..to oneoHopfinm 58 A. NN.NH .NloNH NN.NN SN «HAN NHN NNN NN.NH N BEEN Noon A Felon A neon A Neon A soon A been A neon A Neon A Nmm A Nmm mmm A 3a A dd A NE A A 8:5 N eoHnoN. H eoHnoNA HHS AN eoHnod. H eoHnod. .eonnononA oneHmNedA eoH o HHneoH eoH. ANoHHmnN eNmHHneon ASHE. 33% 3 o Han boobed. 83338: HN . 1+7 H HI 30m abouoom S . och .vooh A NN.? NN.: .98 81m moon mm H H. Noon 8.58 noon NN .. N .8 .. .. ._ mm a H .8 a I a mm a N .Um .- s 3 Mn. .. H .8 6858: ASH Am a N .2 I ... MW H33. H .8 $598 noon NN .. n33 N 388 on .. n33 N 388 NN .. n33 AA NoHnom NN .. .833 N 3.28 NN .. n33 N .888 NN .. n33 H No.28 NN . ...Ann .8: .393 Hfiafi ..N 8.3 NN.NNNNNAAH N oNoNNno: H336 NH N oNoNunox 8.3mm Hoom NH NN.NN NN.NNNI NN.NNN N .38 NH NN.NN 84.8.. NN.NNN N H338 NH 88 figdngwm E m “.3904 0.553% ”wands—hum N. anon. omwdfim 500 n .....6 3815.3 58 AA o o NN.NN- NN.NN m wag 3A.... 15.553. 15533.. H33: :5» Ammo A Noon A 3.5 A Noon A A on . A R ANN AHm Aom ANMANN A A . .23 .uoohA Eamon A noun A «Hun. A flan“. A 10m A tom A ......ndb A noagmon A no.5 ..Aoo: NNHN A ..Aooz :3 A A HHoN AnoNooAAAnoNooNA naoN A noon A A 755 agnobfi A A am A A A A . gaggl/AP/ 48 Within each set, there are two levels of mechanization or feeding facilities; low and high, allowed in the model. Low mechanization corresponds to the conventional methods (by and large the ones found on surveyed farms in 1961) of feed handling used in conjunction with beef feeding enterprises (P65 through P79). High mechanization (activities P80 to P87) corresponds to metered feed handling and conveyor systems for distribution to the feedlot. The beef activities provide for the possibility of a beef cow-calf enterprise (P64) and several alternative methods of feeding out these calves and/or purchased feeder calves or yearlings. The various feeding systems include: (1) Calves fed on drylot; (2) calves fed on pasture; (3) calves fed on a deferred feeding system; (4) dairy calves on drylot; (5) dairy calves on pasture; and (6) two possible drylot yearling (beef steers and dairy steers) feeder systems that differ only by time of year the animals are fed out. In the model. the possibilities for the purchase of feeder calves is included (P90) and to sell raised feeder calves (activity 91) or these raised feeder calves can be fed out through one of the possible calf feeding systems. Activity P92 refers to the sale of a specific grade of beef (choice steers) marketed at a specific point in time within the year. Beef cow herd expansion and liquidation are handled by activities P88 and P89, respectively. Equation 59 is in effect an intermediate product equation for beef which accounts for the production of beef from all the alternative beef activities. In order for one equation and one activity to handle beef sales, the beef is measured in a standard unit. Price was used as the weight to convert the output of the various activities to the standard unit. In cases where feeder calves or yearlings are purchased. only the net gain put on the animal is counted as beef produced and for sale. However, the purchase price of the purchased feeder is included in the model since the opportunity costs of the capital must be taken into account. 49 Dairy Enterprisel Phase 1 includes dairy activities representing the (a) stanchion milk- ing system, currently most prevalent, (b) parlor-loose housing arrangement. (c) expansion and contraction of the dairy herd, and (d) investment in new capacity or facilities for both types of milking systems. The Grade A produc- tion alternatives, parlor and.stanchion.differ only with respect to labor and investment requirements. The dairy activities are presented in Tableau 5. Each unit (1 cow) of the Grade A production activity produces 11,500 pounds of milk (3.5 percent fat corrected milk), .#75 of a deacon, .225 of a cull heifer. .25 replacement heifer. and 300 pounds of a cull cow (a 95per- cent calf crop, 2.5 percent death loss on replacement heifers until first lactation, and a 25 percent culling rate for cows were assumed). The Grade A.stanchionand parlor systems were not alternatives in the same problem since in reality mixed facilities are not a common practice. Also, stanchion systems are not recommended for farmers going into dairying. In addition, it was agreed by the NC-54 Committee that dairying would not be treated in detail since the Lake States Dairy Study was in progress. If the representative farm had Grade A stanchion dairy facilities, it was allowed the choice of producing under a stanchion system and investing in more stanchions. If there were no Grade A facilities on the representative farm, the parlor alternative was the system introduced into the model. . One unit of the dairy production activity (P96) uses 38 cwt. of corn , lThe budgets for the dairy production activities were derived from the following sources: (1) H. J. Anne and L. M. Day. "Effects of Herd Size on Dairy Chore Labor," Bull. 449, Minn. Agri. EXpt. St., St. Paul, Minn.; (2) E. I. Fuller and H. R. Jensen, "Alternative Dairy Chore Systems in Loose Housing." Bull. 457, Minn. Agri. Expt. St., St. Paul, Minn., Feb. 1962; (3) K. T. wright, "Dairy Feed Costs and Returns." Agri. Econ. Mimeo. 874, Dept. of Agr'. Econ.. Mich. State Univ.. East Lansing, Mich., July, 1962; and (1+) consultations with K. T. wright and C. R. Hoglund of the Agr. Econ. Dept.. and L. D. Brown, D. Hillman and‘W. J. Thomas of the Dairy Dept. of M.S.U. 50 H H- H- H H zoo nunoooao anHon NN H H- H H Noon ozoo anz HN NN.N- NN.N- .Nso . moHAAN Noom mN NH.N NN.NH .mno no: noonq N Nonnon on NN.N NN.N .mno no: noouq N Nonnom NN NN.: NN.N .mnn no: nopoq : NoHnom NN NN.N NN.NH .mna no: nonoq m ooHnom NN NN.NH mN.NH .mna no: nooog N NoHnom NN NH.NN NN.HN .mno no: nonoH H NoHnom NN HN.NN NN.NN .mna on: nonoH Hoooo¢ :N NNH NN.HNN- N omompnoz Hopnooo NH NHN- NNN- N omomnnoz opopom HAoN NH NNH NNH Nam- NN.NNN NN.NNH- NN.NNH- N Nooo NH NNN NNN NNN- NN.NNN NN.NNH- NN.NNH- N HANHmoo NH NN.N NN.N woos mpnoHanHoom mom N gum tum No.34 onupmwm vqogom m oe.N o:.N moon oNAHnm onoo N NN NM .930 mpooHonAooN onoo a o mN.NN NNzNNNN pg Had A 300 A 300 A .300 . 300 300 300 _ A . .02 NH A HOH A ooH A NN N A mm A m A A A mono mammdmm A .Hoamwm AmogomopmA ._.-Hem A mam A .Hoamwm Amodwomwva 9.95 A nofimflhomoa Along .Howmnons A? A 300 haw-mo A NN.HN-an A A. A @8583. Han < mglnfi bags 51 equivalents. 5.4 tons silage, 2.77 acres permanent pasture, 3.28 tons hay equivalents. 79.27 man hours of labor (distributed by periods 1 through 6), one cow. and one unit of dairy capacity. One unit of the activity nets $396.33 and furnishes $198 which can be used for operating expenses (increases capital and cash by $198) and 3.55 cwt. of beef to be sold through the stan- dard unit beef activity. Activity (P97), parlor system. differs from (P96) in the labor requirements. Activities (P98) and (P99) provide the possibility for expansion or contraction of the dairy herd. The net revenue in these activities is the average annual depreciation of the cow, not including the young stock. The entries in the cash and capital equations in these activities include the requirements for the young stock as well as the cow. The investment in new stanchion or parlor facilities is provided for in activities (P100 and P101). These activities have not costs or revenues which are composed of annual charges, and the full cost per unit is given in the capital equation with only the down payment occurring in the cash equa- tion. Activity (P106) provides for the transfer of dairy housing, without additional costs. to beef housing when dairy housing is not used by the dairy production activities. Swine Enterprisel In the model, the hog activities include (1) different combinations (activities P108 through P119) of central and portable one-litter sow systems, I 1The budgets for the hog production activities were prepared from the following sources: (1) "Hog Coefficients," assembled and prepared by E. R. Swanson, Agr. Econ. Dept.. Univ. of 111.. Urbana. Ill.. 1962; (2) "Funda- mentals of Swine Nutrition." by J. A. Hoefer, Animal Husbandry Dept.. Mich. State Univ.. East Lansing, Mich., Feb. 1961: (3) K. T. wright, "Hog Feeding Costs and.Returns." Agr. Econ. Mimeo. 869. Dept. of Agr. Econ., Mich. St. Univ., E. Lansing. Mich., May 1962; and (4) R. A. Bailey and J. HA Sitterley, "Han Labor on the Commercial Hog Enterprise," Research Bull. 792, Ohio Agr. Expt. St.. Nboster, Ohio, Sept. 1957. Seminars and consultations with J. A. Heefer. J. N. Ferris.and K. T. wright of M.S.U. were very helpful in setting up these hog activities. as were farm.management personnel. 52 (2) activities for investment in different types of farrowing and finishing facilities (activities P120 to P125), (3) a hog sales activity (P124), and (4) a series of feeder pigs activities (P125 through P132) which provide for the alternatives of purchasing and feeding of feeder pigs separate from the farrowing phase of the enterprise. See Tableau 6 for the details of these activities. The production activities (P108 through P119) are stated as series of one-litter hog systems which include both the farrowing and finishing phases of the enterprise. The activities differ as to the time of the year that sows are farrowed and type of facilities and equipment used. The model permits the possibility of a continuous hog program.involving a maximum of four different farrowings within the year. The model permits complete flexi- bility as to the number of sows farrowed in any one quarter of the year (within the other restrictions). All farrowings occur at the middle of each quarter of the year. Both permanent and portable facilities are included in the model. Activities (P108 to P111) provide for quarterly hog production under a central farrowing and central finishing system. For example, one unit of (P108) uses 61.71 cwt. of corn equivalents, $50.27 capital and cash, 13.34 man hours labor (distributed by periods on the basis of farrowings occurr- ing at the midpoint of each quarter), one unit of confinement farrowing facilities,_and eight units of confinement finishing facilities in quarters one and two. The activity has a net revenue of $71.72 and contributes $33.57 chattel credit and 19.75 cwt. of hogs for sale per unit of the activity. The hogs fer sale include seven.hogs at 210 pounds each and a cull sow'weighing 400 pounds which are all sold through the hog sales activity in a standard unit (average of U.S. 1. 2 and 3 hogs). Activities (P112 through P 119) can be interpreted in a similar way. 53 NN.mHn mm.NHI mm.mHl mu.mHu Nm.mHu mm.mHI NN.NH: mm.mH| .pzo moHNm mom mm m m fldom 3.50 = = = HQ 0 m fidom n.00 = __ = om w w mem N.SO = : = mm m w Udom H.30 = = oHdehom mm m m Udom $.00 : = = mu m m mem M.SO = = = mm m m fidom Nodd = = = mu m m Uwom H.50 = .Uoom Hdnpcoo :5 .30m 0.50 = = = MN 30m m.dd = = = Nu .30m Nod? = = = HR 300 Hofld = .hmm OHDmvhom cm H H 30m 3.50 = = .0 mm H H 30m M.SO : = .0 mm H H 30m N.dO = = .0 mm H H 30m H50 .96 wagonamh .0 mm om.N mm.N mmoH dd. om.N NM.N WN.H dd. : = 0 fiOHAQm om NN. NN.N NN.N em. NN.. NN.N NN.N on. = = N NoHnom NN Nm. 0m.N omoH OO.H Nm. QW.N omoH OO.H = : 3 flOHMGm mN 03. mm. om.m OO.M $0. mm. om.m Ooom : : m fiOHHQm KN ON.N NN. NN.N NN.N 0N.N NN. NN.N NN.N = = N NoHnom NN om.© MN.¢ oo.N mm.m om.© mm.d OH.H 0m.“ = HODNH H UOHRQm mm 3m.MH MN.MH NN.:H wm.dH em.MH 3m.mH em.mH em.MH .mns no: nonoq Housed 3N NN.NN- NN.NN- NN.NN- NN.NN- NN.NN- NN.NN- NN.NN- NN.NN- N ommmpnoz Honooeo NH N omwmpnoz 33mm Hoom NH NN.HN NN.NN NH.oN NN.NN NN.NN NN.NN NN.NN NN.0N N Ammo NH NN.HN NN.NN NH.oN os.mo NN.NN NN.NN NN.ON NN.0N N Honnooo NH MH. MH. MH. MH. moped 300w02_G0Hpm#0m w m3.mw m#.mw HN.H© om.H® Hm.Hw Hm.H0 Huon HN.H© .930 mwconbHdvm £900 # ON.NN OW.NN- mm.ONl- wmaom NN.HN NN.HN - NN.HN NN.HN fi‘ HDZMDHM sow A 30m A 38 A son A1) A A A 30m w A A .m-al WHH A dHH A .MHH A NH A HHH A OHH A 00H A OH A A A 206$ .MO A m .mo A N .MO A H mmo A .MO A n .ma A N .MO A m .m@ A #HGD A SOHHQHhoon Alddww oHnmpnom AN .30.H.H.N.m HonpzooA HzonnmmlHanmoo A A A NNHNH>HNN< NoN-.N Namgmga 54 NN.NH- NN.NH- NN.NH- NN.NH- .920 moHAAN mom NN HI w w Udom 3.30 = = : Hm HI w m Ummm n.00 = = : om HI w w 600m NodO = = = 05 HI w w boom H.5O = = oHnopnom mm HI Umom 3.50 = = = mm HI 0003 n.50 : = = mm HI Umom N.dO : = : mu HI doom H.50 .dmo mchoom Hmnpsou on HI H 30m 3.50 = = = MN HI H 30% M.SO = = = Nu HI H 30m N.SO = = = Hm HI H 30m H.50 = .nmm oHompnom on HI 30m 3.50 = = .0 00 HI 30m M.SO = : .0 m0 HI 30m N.dO = = .0 no HI 30m H.50 .dmo mnHzonnNh .o No 3H.m mm.m mm.H do. .Nng so: = N oOHnom om NN. NN.N NN.N om. .Ane so: = N NoHnom NN mm. Nw.m om.H oo.H .Nnn 9N2 = d UOHnom mm Nd. mm. mo.m oo.m .Nnn do: = m oOHnom mm om.m mm. mw.m mm.m .mnz CNS = N NOHnom mm ow.m mm.: oo.N mm.w .Nnn 2N2 noomq H UOHnNm mm NN.MH mm.mH No.mH NN.:H .mne cm: Momma Hmdoc< 3N NN.HH- NNH- NN.NN- NN.NN- NN.NN- NN.NN- N oNANnnoz Hosnooo NH NN.NN- ON.ooN- N oNomnnoz oponm Home NH NN.N NH.OH NN NN.NN NN.HN NN.NN NH.0N No.0: N some NH NN.NH oa.oa NNH ON.NNN NN.HN NN.NN AH.0N os.os N HANAAAN AH NH. NH. NH. NH. moped Scones GOHprom m NN.NN NN.NN HN.HN NN.HN .930 mnooHA>AoeN onoo o w¢.N mw.m mmamm WWJ3N om.om ow.mu mm.om mw.oNI. w mbzm>mm Iflmom A.dflmon-AufimoN «LuzoWI A Bow A eouA,A. new A ASON A A . NNH « NNH A HNH A NNH A A _ A A A A A .02 .pnom A .phom_A .pnom.A .poom A mHHm A mHHm A N.HHAH A NHHm A szs A QOHumHnomoa A :OHH meschHm A .mcHSonnNm A o .59 A m .50 A N .do A H .50 A A A Imdvm NNHHHHHon cH pmo>qmv. AmCHnNHnMM|w mHzonnom-onowmom-A Nooonoooo-.N NANHNHN 55 $4.. m:.HI m¢.HI mm.a- 3N.HI wm.a- 3N.HI m:.HI H .pzo moHAm mom mm H H vwom 3.50 = = = Hm H H Udom m.fi0 = = = om H H 6303 N.§O = = = mm H H fldom H.flO = = OHQw#Hom 05 H H fidom d.fi0 = = = NB H H uaam n.5c = g = wm H H Udom N.§G = : = mm a H uaom H.sa .aao mnfiuoom fidupcoo a“ 30m 3.50 = = = MN 30m n.50 : = : NB 30m N.SG = = = Hm 30m H.50 = .ndm oHnmpnom on 30m 3.50 : = .0 mm 30m m.dd = : .0 mo 3bm N.dO : = .0 .mm .3om H.50 .mdu mnHzonnmh .0 we on. oH. om. mH. .mnn cw: = m vOHAom on 3. mm. 3. mm. .93 5: ._ m 823 mm 0H. 0H. mH. 0H. .mAn cm: = 3 UOHAom wN NN. mm. NN. mm. .mnn mm: = m voauom mN Ha. NN. H3. NN. .mnn cw: g N vOHnom 0N ma. om. 53. co. .mnn am: gonna H vOHnum mN mm. mm. mm. mm. mm. mm. mm. mm. .mnn.nwz_ gonna Hddqzd aN HN.¢I mm.m- wo.nI om.:. HN.:I mm.n- mo.m- oN.¢I A ommmpuozmaoppwnu NH m owmmpuozflopdpmm Hdom 0H no.0 mN.w mH.o Nm.m Hm.w NN.o NH.m on.o a swan MH 50.0 mm.o ma.o mu.m H5.m mm.o mH.o 05.0 A HAAAmao 3a mHo. mHo. mHo. mHo. mouo< .3oumozA20Hampom m ou.m mm.m Ho.m mm.m Hm.m Hw.m Hm.m Hw.n ..pso mp:oH«>stm anon : mm.m, mm.m w:.~ m:.~ om.m ow.“ om.N. ow.m .mm» A mmmmmmm . AN A .930 A A . N H A H H A o H A N A NNH A NH A mNH A wN A A A A .02 .m5. m .moA N .ch H ..HmoA .moA m .moA N .ch H ..HmwA dNHm A p.33 A cognanomon no.3 cfigmazwm oHnwpuom cHzchHh pcoeochcouIIIA mmom A A A stvm m Hm novoom :HAmHGHm cad omwnonsm A HHom A A A UOQGH¢QOUII.0 bndm A.v:mpm A Ihom A A A ‘H'II Hao< mOMUII.m DHsmm hem m Nu.m mono< ondpmum pmocdanem m 0:.nm .pso upcoHebadwm :aoo : HASH SAN- 8.3 and... A IIIIIAAAAAAEAHAA too A soc A .300 A [moo A H1 A AWQI A A A A A A nonasz moHvHHmmeh A :mww A wmww A wmwma A pHma . codpmahemon A meduudwm m .35 5 teen w nLIHHom A Adm . m ouaaw mflHaHbHHo<_HmHHHo< momhdm ham 5: H waged a .wmobhdm omdaflm w: H mono< = waaxofim choc m: a H: mouo< = 9mo>nam cfiono A: . H H: mowed .dmo omaaafia w nosed m: on.m md.e mm.a mm.H cm. 00.: cm. om.u .mnn .do Honda Hdfinowqqmz mm RH RH .93 5AA .. m 838 on Ra 09m 9. 9A.- .93 A3: .. n 328 mN NH. AH.I .mhn max. = d ooauom mu .mnn_cdz. A m ooanom mm om. 8... .93 no: .393 N ooauom wm om.m on.m mm.H mm.H ow. om.n om. om.p .mnn am: gonna Hmsaq< Am A 8.396 .833 NH mw.mH NH.N Ne.m oo.m « amen ma no.2 AHA. N36 83 A H338 AAH macs modem him 0H 989 Bncfisfium .83 a moped sooeoz.:oau¢pom w ooau .mm modem shoe 0 was much omaadm choc m on- ..to 333233 98... AA A H . meno< choc wzfiuadpm m min 84m. 89m 3 . 32% one“ once A once A A A my A A mt, A A A .0: bum A Hmum A hm A 34.5 A dofldanomon A coda :dpmobhum . . A . A o A A A :1: A omaadm anon A m=H30fim 3900 A puermwm madam A HHfia . A . . A wn 433 as? .. N Nam 38 $5584 HfiszoAAziéH D433. 71 H- NHI mH om.w .oz coup -25 macs huHoNdmo oHHm HI mouo< quHde poem nemdm H H: meao< .mmo pmobhwm poem gamma H mound g pmobhmm he: moped = pmo>nmm omNHHm moao< z maonHm :Aoo mono< = pmo>nmm cHNuo .- mono« ..dwo ommHHHe w nozom 0N.mu N om.Hu ow. Nm.N .mnn .do uonmq HdHaommcmz om.mn H mm.a .mp3 no: a o weaned H mm.| 0N. mm.m .mnm me: = m ooHnom .mhfi 5: A. 3 vouch om. ANA .93 A3: .. m 338 .mp3 no: noan N oOHnom 83- N RH- om. 33H .93 A82 3&3 H234 A 338.6 .838 0N.MN no.MH mH.MH A ammo ONAN 3.9 NHAH A H338 nu macs monm mom mu mace mpcoHd>Hdwm new H 3.34. A8932 coflapom .sm moHNm choc macs omeHm £300 ..to $333.35 980 moped choc ucmpm ma.wu NH.HH . « mozm>mm chow A once A A A and A mom A A . A HHom A ham A 9.95 A dogmflomoo A uaHHdn him . A A IIIIIIIIIIIIII, u gaggOOl'o HA ASA: 72 activities (P53) and(P54) and the hay baling activities (P57) and (P58) function very similarly to each other. For example. buying corn picking capacity (P53) costs the custom rate for harvesting plus the cost of hauling or a total of $7.17 per acre. One unit of this activity picks one acre of standing corn and adds 80 bushels of corn to corn equivalents and corn sales equations. uses $7.17 capital and cash, 1.38 hours of labor and 1.35 hours of managerial labor (this time is spent by the operator supervising, hauling and storing the picked corn). The corn picking sales activity (P52) has a net return (after operating expenses) of $3.02 and uses 1.35 hours of labor (annual, period 6 and.managerial labor) and reduces the corn picking capacity by one unit per acre. The corn silage harvesting activities and the hay baling activities function the same way as the corn picking activities. The silo building activity (P63) allows expansion of the silage capacity. One unit of the activity provides one ton of capacity at an annual cost of $2.23 and uses $16 capital (full purchase price), $4 cash (down pay- ment). and furnishes $12 dealer credit. This activity is the same for Phase 1 and Phase 2 except in Phase 1 silo construction was assumed to provide chattel credit instead of dealer credit. The initial supplies of these machinery resources were based on the farm.survey information on machinery inventories. The procedure used in developing the machinery restrictions for the representative farms is as follows: (1) Machines were inventoried and quantified as to size and condi- tion; (2) the individual machine capacities were estimated by using informa- tion obtained from the Agricultural Engineer's gandbggk; and (3) then the specific machine capacity was adjusted on the basis of the number of days available during the crop season to do its specific task under weather condi- tions assumed to equal the average of the 16 worst years out of 20.1 1J. H. Sitterley and Richard Bars. "The Effect of Weather on the Days Available to Do Selected Crop Operations," Mimeograph Bulletin A.E. 313, Department of Agricultural Economics. Ohio State University, August, 1960. 73 Livestock Enterprises The livestock activities in Phase 2 are the same activities included in Phase 1. Their only difference is that the Phase 2 activities use the managerial labor and/or the special milking labor resources. For the beef production activities and the hog production activities, the assumption was made that the manager or operator type labor must con- tribute 60 percent of the total labor required by the enterprises. The remain- ing portion of the labor required may be furnished by the operator or family or hired labor or any combination of these. Therefore. the coefficients for the hog and beef production activities in the managerial labor equation are .6 of the coefficients for the annual labor equation. The dairy production activities (P96 or stanchion dairy and P97 or parlor dairy) use both the managerial labor and the special milking labor. Activity (P96) uses 64.04 hours of managerial labor and 63.04 hours of the special milking labor per unit of the activity. Activity (P97) uses 46.8 hours of managerial and special milking labor perunit of the activity. The activities for hiring managerial and milking labor are stated in Tableau 9. Extended Phase 2 Model The extended Phase 2 model changes restrictions on buying and renting land. The restriction for buying land 2 was increased from 40 acres to #00 acres. The restriction on renting land 2 was increased from.#0 acres to 120 acres. These increases were introduced to see what other resources might become limiting and to see how various farm.situations would be adjusted or changed by increasing the levels of these restrictions. South Central Area Phase 2 of the model for the South Central area differs from Phase 1 Of the model in very much the same way as the Thumb Phase 2 varies from Thumb 74 Phase 1. Only the differences in the South Central Phase 2 are presented here. Reference must be made to the appropriate Tableau under the section on Phase 1 for the South Central area in order to view the major parts to many of the activities. Crop Activities The crop activities in Phase 2 for the South Central area are identi- cal to those for Phase 1; however, the activities now use the managerial labor resource and the machinery capacity restrictions where relevant. The soybean activity (P2) uses 3.2 hours of managerial labor. 1.7 units of power and tillage, and one unit of grain harvest capacity per acre produced. The standing corn (P2) uses 3.20 hours of managerial labor and 1.75 units of power and tillage per acre. Harvest corn for grain (P3) uses 1.2 hours of managerial labor and one unit of corn picking capacity per acre. Harvest corn silage (P5) uses 4.81 hours of managerial labor and one unit of silage harvest capacity per acre. Oat production (P15) uses one unit of power and tillage and 2.24 hours of managerial labor per acre. Wheat production (P17) uses 4.08 hours of managerial labor per acre. All other coefficients and activities remain unchanged from Phase 1. Credit Activities The credit activities included in Phase 2 for the South Central area are the same as the ones in Phase 1 plus the credit activities added to the Thumb model to compose the Phase 2 Thumb model. The initial supplies of these resources are different. Labor Activities The activities added to the South Central Phase 1 are the same as the ones added to the Thumb Phase 1 to make Phase 2. The only difference is in the net return per hour worked. Operators were assumed to receive 75 $1.99 per hour in the Thumb and $2.25 per hour in the South Central area. The family workers received a net of $1.58 per hour in the Thumb and $1.72 in the South Central area. These net returns are based on the wages received by people in the survey during 1960 projected to 1966 by using the national index for industrial wage rates (1947-1949 equals 100) corrected for the Michigan differential and adjusted by age and for traveling expenses. The differences in the wage rates from one area to the other is based on the dif- ferences in the wage rates received by workers in each area in 1960. The hiring of managerial labor (P38) was assumed to be the same as for the Phase 2 model for the Thumb. The hiring of milking labor (P107) for the dairy enterprise costs 5 cents more per hour. This price difference was based on the 1960 price differential for hiring milkers for the two areas. Lindaiallliiiii The land activities for the Phase 2 model are the same activities as for the Thumb Phase 2 model. but the coefficients are different. The main reason for the differences in the coefficients is the difference in the productivities of the soils. As a result. the crop yields are lower and the cropping program is more extensive in the South Central area than in the Thumb. The activity for land buying. selling and renting for the South Central area are presented in Tableau 12. These activities are interpreted the same way as the land activities in the Thumb Phase 2 model. \ flashinszztiatixitiaa The machinery activities. unique to the South Central Phase 2 model. are stated in Tableau 13. The power and tillage activities (P47) and (P48)' the hay baling activity and the silo construction activity. are the same as in the Thumb Phase 2 model. The grain harvesting (P49) and (P50). corn picking (P51) and (P52). and the corn silage harvesting (P53) and (P54) activities differ from the 76 H H moaoa pHaHH moHem useH N: H mono: pHaHH N ucaH 0H p000 H: H monoa .asm pouapcoo N esaH 0: H H mecca pHsHH N egaH ism 00 H manna .nsm poanpsoo H eceH mm H mono: pHaHH H 00am 0H seem an H H monoa pHaHH H ecmH asm 00 a0.- mm.- mm.- a0. a0.- 00. mm.- mm.- monoa sHsaH 0000 :00 mm H- 00.- 00.- H H- 00. 00.- 00.- monoa uHsHH eceHaono :0 : : : : : : .mt: .00 noan HmHnommca: mm Nn. Nm. N0. Nm. Nn. Nn. .mn: max = 0 eOHaom 00 00 00. 00 00. 00. 00. .20 as: .. m 00.080 mN N:. N: N:. N:. N:. N:. .mp0 as: g : eoHnom 0N 00. 00. 00. 00. 00. 00. .man as: = m eOHaom aN 00 00. 0m. 0m. 0m. 00. .man as: = N eoHaom 0N N0. N0. N0. N0. N0. N0. .man as: nonuH H 00Hnom mN 00.: 00.: 00.: 00.: 00.: 00.: .mnn as: noan Hesse: :N NAN- 0NN- 0 pHeono poeapcoo ecaH NN 05H- N:H- a sHesno ommmpaoz equ 0N N:H a owmmpnoz madame Hana 0H 00 05H 00H- am H:H 0 ammo 0H 0:0 0:0 00H- 00N 00N a HaaHaao :H NH.- 0H.- 0H.- NH. NH.- 0H. 0H.- 0H.- mecca pHaHH mesons: smog: 0H 00.- 0:.- 0:.- 00. 0m.- 0:. 0:.- 0:t- monoa anHH :Hanc HHaam HH 0H.- 0H.- 0H. 0H.- 0H.- moaoa oaspmam pconasucm N mm.- 0N.- 0N.- mm. mm.- 0N. 0N.- 0N.- manna pHsHH omeoaoa :noo N :m.- NN.- 5N.- :m. :m.- NN. NN.- NN.- moao< pHsHH omeoao< seem H .tas 0:.mw 0:.0 .mws .ums 00.N- : dwam -00.N 0 m0zm>mm chow u chad . . chow u chow , u Chow: u 090m « chow n 93.6 u u u u a a a u u a u u a .02 miHHm "covenwmgemewwmozu new a New “ 3m "powmmcoo. ommwmmoxa ads “ moflmdnomon n no.3 N omega ..Ho ammo « 0.50 “ mH " 9.03 a 3.3 do ammo “ u a 3.23m sham "I; u Bam- psom " HHom "in a " :05 392005000 - N 004mm m8 359304 93-12 0090; 7'7 MH mace hJHoedao oHHm cm H mono¢ = pmo>mem ommHHm m: H momo< = wcHxOHm cmoo m: H .H1 momo¢ .deo .pmo>hem :Hdmo 3: om.m om.m :0.H H mm. mw.l .man .do momma HeHmommcez mm 000 00A :0.H 0N.H 0N. me .02 as: .. 0 condom 0m mm. mm; .02 as: .0033 m 0028 0N om.m om.m do.H oN.H m0. mo.u .mmn cm: momma Hesqc< 2N 00.0H 00.0 00.: a 58 H no.0H no.0 om.¢ a HepHdco 3H om: .sm monm 2900 o mHu macs omeHHm cuoo m 0:3- 66 $032900 200 : H H moao< .maoo mmemepm m a4? w0.0-H :0.:- 00.0 0m.:- 0%.: H “00sz choc " once " snow once a show once u a a 3mm u mmm “ Nwm a me " 0mm “ 03m " a 0 .oz HHem « mdm " HHom a hem « HHom " arm n was: a :OdeHmomoQ “ moan Illlldmfllllllllfl, “ a u a u I emmwmmpmmmo « mcchHm-cnoo a pmebmdm cause a a a «sum SE4 ngmo mason .- N mam mom gag": HfiszoSTIEH Dang. 78 same activities in the Thumb Phase 2 because of the differences in yields, size of machines used. and weather conditions during harvest season. How- ever. the functioning of these activities is identical to the same activities in the Phase 2 model for the Thumb. The differences in harvesting machines for the two areas are as follows: (1) grain harvesting machine--10 ft. self-propelled combine for Thumb farms and a 7 ft. power take-off combine for the South Central farms and (2) corn picker--l-row corn picker for Thumb area and a 2-row mounted corn picker for the South Central area. The corn silage activities differ in that Thumb corn silage yield is assumed to be 18 tons per acre, while the South Central yield is set at 15 tons per acre. Livestgck Activities The livestock activities for Phase 2 are the same activities in Phase 1. but now they require managerial labor and milking labor where appropriate. The beef production activities and the hog production activities are identi- cal to those for the Thumb Phase 2 model. The Grade A stanchion and parlor dairy activities are the same for both areas. CHAPTER V OPTIMAL SOLUTIONS FOR THE REPRESENTATIVE FARMS This chapter presents the resulting optimal organizations of repre- sentative farms for selected price combinations. First, adjustments and organizations will be presented for Phase 1 (land restricted to the 1960 levels) by geographic area. Second, the resulting optimal organizations under Phase 2 (land variable for renting and purchasing) will be given pri- marily as they differ from Phase 1. Finally, a partial assessment of cer- tain changes in the model (Phase 1 and Phase 2) and of the results will be submitted. The optimal solutions or organizations for the representative farms presented in this chapter are based on projected product and input prices for the period 1963 to 1970. These prices may be viewed as the expected prices over this period. The prices assumed for corn, hogs and beef cattle are presented in Table 6 (the other prices can be found in Table 3 of Appen- dix A). The resource supplies of the farms programmed are based on survey data for the year 1960 as presented in Chapter 3, Tables 4 and 5. TABLE 6.--PRICE LEVELS* ASSUMED FOR THE STUDY AREAS Thumb Area : South Central Area Product Unit High (H3:W(M7:Low (L):High (MW : : Price a Price : Price : Price : Price : Price Corn Bu- 35 1.19 $ 99 $ .739 $ 1.17 $ .97 $ -77 Hogs th. 16.57 13.73 10.89 16.82 13.98 11.14 Beef Cattle th. 24.31 20.20 16.08 24.56 20.45 16.33 I"Adjustments have been made in the prices for transportation and marketing charges. 79 80 a tments Us n P ass 1 the Mode As was described in Chapter IV. Phase 1 of this analysis treats land. machinery and managerial labor constant at the 1960 levels for the representa- tive farms. No provisions are made for selling different kinds of family labor off the farm.or for selling durable resources. Therefore. the results from Phase 1 will not handle the questions concerning:' (1) farm expansion and contraction along the extensive margin: (2) farm consolidation: (3) off-farm employment; and (4) the economic levels for employment of durable resources. However. the resulting solutions. under Phase 1. do give some indications of the pressures to expand or contract the use of specific resources. These indicated pressures are revealed by the marginal value productivities (MVP's) of the type of resources inquestion.l But. these pressures do not tell hgg fgr_adjustments should be made or for ghgt_z§ngg,these MVP's hold. Thumb Areaz The resulting optimal solutions for the representative farm situations for the Thumb area differ considerably from the 1960 organization. The optimal solutions will be presented in this chapter by studying first the effects of size and type of farm. then the effects of price variations on farm.organization. 3 lThe linear programming MVP is not the same as the MVP from a con- tinuous function. In programming. the MVP of a resource is evaluated at the margin with no other resource restricting. Thus. resources which are not restricting are treated as free and can be combined with one more unit of the restricting resource to yield the MVP of that resource. This type MVP only holds for an additional unit of the resource and its behavior may be very "erratic" for further additional units. Its value may decrease or fall all the way to zero depending upon which other factors become restricting as output changes. The "erratic" behavior of the MVP's results from the characteristic of corner solutions of linear programs. i.e., the solutions hold for a specific range until other resources become limiting. then another organization becomes optimal and MVP's of resources change. 2The use of the term Thumb area in this thesis refers to the Thumb and Saginaw‘Valley areas (see Figure l). 81 Type and Size Effects As was stated in Chapter III, the quantity of resources and type of farm were believed to affect farm adjustment possibilities. Thus, farms were stratified or classified into size-type categories for analysis. These initial characteristics were expected to have significant effects upon the programmed optimal organizations. In 1960, the farms in the Thumb area were, by and large, cash crop farms. Dairying was the second most important enterprise. The existing organizations of the representative farms are compared with the optimal organizations in Table 7. The 1966 medium projected prices for corn, hogs and beef cattle are used for these comparisons. All other product and input prices for the optimal solutions are the 1966 projected prices. Table 7 presents the estimated gross incomes and proportions of income by enterprise for 1960 and for the optimal organization. Also, the enterprise levels are compared. The prices for 1960 are different from the 1966 projected prices. The beef cattle price in the optimal solutions is approximately $4 per cwt. lower than the 1960 price. The projected hog price is $3 per cwt. lower than the 1960 price.’ All other projected product prices are approximately the same as for 1960. The proportions of gross income coming from.the various enterprises are quite different for the 1960 and the optimal organization. In 1960, cash crop and feed grain sales contributed approximately 80 to 90 percent of the gross income to the Sma11,JMedium and Large Cash Crop representative farms in the Thumb area. In the optimal organization. none of these representative farms had sales of feed grains and only 22 to 28 percent of their gross income came from.cash crop sales. There are few differences in the proportions of gross income contributed from the dairy enterprises between the 1960 and opti- mal organization. The proportion of gross income coming from hog sales 82 om30m Home 0300 haw-do .oHfimo moon mo 0.8908: .Ho 03.03 a.“ xoopmoarHH one mouse .Ho 03.80. 5“ v0.0.3.0 one mdo.Ho\m m 0 00 H: H00 0 0NH 00 HmH NOH aann 00000 : N NN HN 00N N N: :N :0 N0 auH00.asH000-HH000 . 0H H .1: o no: x: 00H me mmH um mono Ammo owns-H 0 H 0 H aaN N H0 00H :0 0N 0000 0000 00H000 0 H H H 00H 0 :: :0 :0 0H 0000 0000 HH000 \mchbQH emeQmopmm m H 0 :N ma 00 0 0H NN 0 N HH:.00 am:.:m auHsa .masH m N H mm :0 00 0 NH HH 0 H 0H:.am H00.0H auHsn asHsmz-HHmsm : a m : 0H 00 N NN 00 0 0 0H:.am 500.HN 0000 0000 00000 H : m 0 N 00 : 0N N0 0 0 H00.mm 0:H.NH 0000 0000 asHeoz 0 0 N N : a0 0 NN 00 0 0 0NH.0N 0:0.a 0 0000 0000 HH000 Omflh MOPSH D 03603 HO #fiOOHOm . T0. 05.5.0000... 0000.00.00 :00: ESE a 2H an norm g4 mag and mgazm Hm 3802”.” 338 MO azmofimm 924 H505” mmom Ilé. mama. 83 increases over two times the 1960 percentages of income coming from such sales. The most significant adjustment for the Cash Crop farms is the large increase in beef cattle. In 1960 the beef cattle enterprise contributed from 0 to 4 percent of gross income but in the optimal solution beef cattle sales contrib- uted 69 to 80 percent. All of the Cash Crop representative farms in the Thumb area change to Livestock farms in the optimal solutions based on the criteria used in this study for defining farm type. The Dairy representative farms in the Thumb area also turn out in the optimal organization to be Livestock farms, but they have smaller proportions of their gross income coming from beef cattle sales than the reorganized Cash Crop farms. The proportion of income from cash crop and hog sales are about the same in 1960 and the optimal organization. The major change in the Dairy farms is the proportion of income from the dairy and beef cattle enterprises. In 1960 dairy made up 84 and 73 percent of the gross incomes for the Small- Medium and Large Dairy farms, and beef none, while in the optimal solution beef made up 53 and 60 percent and dairy added only 33 and 24 percent of gross income for the Sma11-Medium and Large Dairy farms, respectively. Farm size has a significant effect upon the extent of adjustments from the 1960 to the optimal organization. As is indicated in Table 7 (lower part of the table), the levels of the enterprises in the optimal solu- tions vary directly with the size of the farm. There is one exception. The level of the hog activity for (1) the Medium Cash Crop farm is less than for the Small Cash Crop farm and for (2) the Large Dairy farm is less than for the SmalléMedium.Dairy farm. The levels of the beef cattle enterprise in the optimal solution vary from 187 head for the Small Cash Crop farm to 691 for the Large Dairy farm. Adjustments in the crop enterprises are closely related to the shift from cash crop and dairying to beef cattle production. The shift away from 84 high forage consuming livestock to high concentrate consuming livestock, i.e., from dairy to beef and hogs, is consistent with the shift from hay crops to growing more feed grains, primarily corn since oats remain about constant at the 1960 level. The wheat and the sugar beet enterprises in the optimal organization are operated up to the acreage restrictions. The dry bean acre- ages on the Cash Crop representative farms in the optimal organization are approximately 40 percent less than they were in 1960. This land changes to corn production to supply feed to the livestock enterprises. However, the representative Dairy farms in the optimal solutions have increases in dry beans from 7 to 22 acres and 53 to 70 acres for the Small-Medium and Large Dairy farms, respectively. No corn is sold in the optimal organizations. The levels of the feed grain and cash crop enterprises for the 1960 and opti- mal organizations are presented in the lower half of Table 7. The levels of the dairy enterprise in the optimal solutions are approximately the same as those of 1960. The dairy enterprise increases from 21 to 22 cows on the Small-Medium.Dairy and decreases from 41 to 38 cows on the Large Dairy farms. . The levels of the beef cattle and hog enterprises in the optimal organizations increase many times over the 1960 levels. The beef cattle enterprise varies from 187 head of'yearlings for the Small Cash Crop farm to 691 head for the Large Dairy farms. In 1960 the representative farms had from 0 to 7 head of beef cattle per farm. The increase in sows farrowed varies from.2 to 16 times the existing level. The major increase in the hog enterprise occurs on the Cash Crop farms with the largest increase on the Large Cash Crop representative farm. The increase there is from 1 to 16 sows. The levels of the livestock activities for the existing and the opti- mal organization for the Thumb area are presented in the lower half of Table 7. The additional resources necessary to increase the activities to the 85 levels as indicated by the optimal solutions are presented by representative farms throughout this chapter. Effects offPrices on Organizatign_ Corn, hog and beef cattle prices were varied in this study. These prices were set at three levels (see Table 6 for specific prices) which are referred to as high, medium and low through this chapter. It is expected that representative farm organizations are affected by price changes. i.e., there are production responses to price changes. Some price changes may have more significant effects upon farm organization and production than others. This is the case with the results of this study. Hence, only the most significant effects of price changes will be presented in the text of this thesis. Since there are two phases. 14 representative farms, and 27 optimal solutions (one for each of 27 price combinations) for each representative farm in this study, only specific selected price combinations and representa- tive farm situations are presented. The reporting of the optimal solutions in this study is as follows: (1) Only solutions at the medium,price for corn are presented; (2) solutions to all three price levels for hogs and beef cattle are given; (3) for Phase 1. only the mggiumlsize representative farm situations will be presented in the text and the other representative farm results will be placed in Appendix B; (4) for Phase 2, only the results for the medium representative farms are presented in table form in this thesis; (5) it is assumed that the results of the linear programming, in total, will be presented elsewhere and at a later date; (6) all results for Phase 1 and Phase 2 have been summarized and are on file in the Department of Agricultural Economics, Michigan State University. Since changes in corn price had few significant effects upon farm organization in the optimal solutions, only the solutions with medium corn price are presented. Lowering the corn price resulted in less corn production 86 and more bean acreages. With the low corn price, slight increases in corn purchases and levels of corn using activities occurred. When corn price was high, with high beef and hog prices, the main effect was an increase in beef cattle production and a reduction of swine production to the point where the hog enterprise was only slightly dominant over the beef cattle enterprise. In all other respects, the optimal solutions for low and high corn prices were similar to those for the medium corn price. Cash Crop Farms The Small Cash Crop representative farm is typical of the 80 to 120 acre cash crop farms in the Thumb area. This farm is characterized by a labor force composed of the operator and a few family workers, usually the wife and/or small children. In 1960 the small cash crop farms grew dry beans, sugar beets, corn, oats and hay. There were very few dairy and livestock facilities even though all farms had adequate buildings and facilities to handle some livestock, 3 or 4 sows, and 20 to 30 head of steers. The optimal organizations for the Small Cash Crop farm for the medium corn price of $.99 per bushel and various hog and beef cattle prices are pre- sented in Table 1 of Appendix B. Moving from right to left in the table, the not incomes1 and levels of specific enterprises are stated for various beef prices. The solutions under alternative hog prices are revealed as one reads down the table. When both hog and beef cattle prices are low and with corn price medium, the Small Cash Crop farm becomes a Dairy farm with 26 grade A dairy 1The net incomes are the incomes left after subtracting operating expenses and annual costs of owning any new buildings and facilities. A deduction has been made in the initial level of the annual cash account to account for real estate taxes, but no deduction has been.made for annual depreciation expenses on buildings and facilities. The net income is the return to owned labor. capital, land, buildings and facilities. 87 cows. only 18 head of beef steers, and 2 sows. The farm becomes a 200 head beef cattle farm when hog prices are low and beef prices are medium and high. When the hog price is medium and beef is high, a 200 head beef farm also results. The farm becomes a hog farm when hog prices are medium or high with beef cattle prices at low or medium, respectively. At all other price combina- tions the resulting organization is a beef-hog or a hog-beef farm. For con- venience. henceforth, the letters H. M and L will be used to denote high, medium and low prices, and the order of these will be corn, hog and beef prices when they occur in a threesome. In order to obtain these optimal organizations, additional resources must be acquired. The amounts of specific resources acquired by the Small Cash Crop farm and marginal value productivities (MVP's) of specific resources are presented in Table 2 of Appendix B. In all cases in Table 2 of Appendix B except MML, MRI and MHM wheat and sugar beets were grown up to the acreage restrictions. Substantial quanti- ties of purchased corn and borrowed credit were necessary for the optimal solutions as indicated by Tables 1 and 2 in Appendix B. The Medium Cash Crop optimal organizations are very similar to that of the Small Cash Crop farm. These optimal solutions are presented in Table 8. The essential difference between the solutions for the Small and Medium Cash Crop farm is the activity levels which are greater for the Medium Cash Crop farm, There is another difference, the Medium Cash Crop farm is a dairy-beef farm at low livestock prices instead of a Dairy farm. The additional resource requirements and MVP's for specific resources are presented in Table 9 for the Medium Cash Crop farm. Since purchases of seasonal labor were allowed, labor will have an.MVP in the linear programming results when capital is restricting or some other resource limits the use of labor. Labor costs $2.02 per man hour in the Thumb model. Therefore, for it TABLE 8.--OPTIMAL ORGANIZATIONS FOR.MEDIUM CASH CROP FARM IN THE THUMB AREA - PHASE 1 Corn Price @ $.99/Bushel Unit Beef Pricesgper th. $16.08 : $20.20 7624.; W- Net income $ 12,457 16,361 21,164 Dry beans Acre 53 44 44 Corn Acre 45 53 53 Alfalfa Acre l3 l3 13 Sugar beets Acre 13 13 13 Wheat Acre 24 24 24 Real estate credit $ 18,744 18,878 18,878 Chattel and private credit $ 2.100 17,480 17,480 Yearlings fed. Pd. 1 Head 37 141 141 " Pd. 2 Head 37 142 142 Dairy Cow l3 Sows farrowed. Qu. 1 Sow l " Qu. 2 Sow " " Qu. 3 Sow " ” Qu. 4 Sow 2 2 co ©> l . th. Net income $ 14,353 16,500 21,210 Dry beans Acre 44 44 44 Corn Acre 53 53 53 Alfalfa Acre l3 13 13 Sugar beets Acre 13 13 13 Wheat Acre 24 24 24 Real estate credit $ 26,159 18,822 18,847 Chattel and private credit $ 13,628 17,480 17,480 Yearlings fed, Pd. 1 Head 138 140 ' Pd. 2 Head 138 140 Dairy Cow' 1 Sows farrowed.Qu.1Sow' 33 3 3 " Qu. 2' Sow 33 " ” Qu. 3 Sow 33 2 " ' Qu. 4 Sow 33 H Price @- 16. th. Net income $ 21,562 21,565 22,229 Dry beans Acre 44 44 44 Corn Acre 53 53 53 Alfalfa Acre l7 l7 7 Sugar beets Acre 13 13 13 Wheat Acre 20 20 25 Real estate credit $ 23,097 23.023 26.608 Chattel and private credit $ 15,087 15.309 17.480 Yearlings fed. Pd. 1 Head 5 56 " Pd.2 Head 56 Dairy Cow Sows farrowed. Qu. 1 Sow 35 34 24 Qu. 2 Sow' 35 34 24 " ' Qu. 3 Sow' 35 34 24 " ' Qu. 4 Sow 35 34 24 89 .uuonwuonna nondmvou ma wafihovno many .oedhn Moon o» andgp on» use .ooahm won on uncoom one .oeaum shoe onu.uo doped on» o» whomon oesosvom ens dd moaned panda any .hHobauoommou .moodum_3od usm.audvea .awfia o» uouou A use :H.m muovaoa once Momma ona\m 2.? area 3.3 2.? 86m no.8 86m 8.8 “min .. w 3:8 as: 3.8 mmém oméw Rune Exam «Emu mush mmém 8.8 98¢} - Badman adu dam «Nam HON HON and mmé $.N .. on .82 n ma 5.8- $4 adm am. pm. . ma 3.8 .. .fiom .— - Hun—Mg _ mm. 34.. dam mm H HON R4“ mm.~ an N 34“ .. a?» u 82. S. adm Quw Q. m HON HON $4... an N $.m .. an: ...:3 03*“ oh“: uench .055 .008 . “~33 mo mo. an. R 1:. 3 mm mm. .3. a .338 mm NM @0on MHuflé 8 mm hut—H fin. BOoNh .- c .I “dog 8 $ 2.6m 36m on an 923 on S 8.3 wean NN.? .. 3!: «388 noon human 34 a do. £58 23 co n 8.3 of: Exam .. . .. .... 28 once\« eased oweonoe seem u wadflflhflmgm 31> as :8 n8 Rm SN 8... in mm Rn ....B 5: .83 3038 won NR awn nan e8: 3:63 new on mm an .8. :8 undated mom NH - deem mace huden ma S 8 8 3 AN .. median conga: :3 ma 8 mm 8 mm AN 34 9:33 moon 3 . 325.28 3.6 we a H am am a 8 am 38. 38:23 be mafia 2.23 8a...." :3.“ km.“ Rafi mg.“ Rim .8 335.3 58 A ”3 ngggflfixfiaéfimfiuafixfifiofigfiaggfiflg Ed>§gesfl§§§§<8gfiu fl§m3§3.m§ t! 90 to be profitable to purchase more labor, the MVP of that labor must be greater than $2.02 plus 2.02 times the MVP for capital (the opportunity cost of the money to be spent for hired labor). In all cases, the MVP's of cropland and rental land were large enough that it would have been profitable to expand farm size had it been permitted. Credit was most often the limiting resource. August labor was seldom exhausted. The major purchases required were corn, beef cattle facilities. and hog facilities. The optimal organizations for the Large Cash Crop farm were very similar to those for the Medium Cash Crop farm. The levels of the activities are higher which is consistent with the larger resource base for the Large farms. The dairy enterprise is a little more competitive with beef and hogs than on the Medium Cash Crop farm. The solutions. resource acquisition. and IMVP's for the Large Cash Crop farm are presented in Tables 3 and 4 in Appendix B. Dairy Farms The Small-Medium Dairy farm has a 21 cow stanchion dairy and the Large Dairy farm.has a 41 cow stanchion dairy. The Dairy farms in the Thumb tend to have more family labor available for farm work than do the Cash Crop farms. The optimal organizations and net.incomes for the Small-Medium Dairy farm are presented in Table 10. At MLL prices, dairy remains the major enterprise. At MLM. MLH. MMM and MH, a combination of beef and dairy enter- prises was optimal. Combinations of hog and dairy enterprises result at MML, MHL and MHM prices. However, a general type farm becomes optimal at MHH prices. The amounts of specific resources acquired and MVP's for specific resources for the SmalléMedium.Dairy are shown in Table 11. Again. large quantities of corn purchases and investments in hog and beef facilities are indicated by the optimal solutions. The MVP's for cropland and land rental indicate possible expansion in farm size. The rental rate for land in the 91 TABLE lO.--OPTIMAL ORGANIZATIONS FOR SMALLAMEDIUM DAIRY FARM IN THE THUMB AREA - PHASE 1 : Beef Prices per th. Corn Price 0 $.99/Bushel Unit :1516008 : 2020 $230 1 W- Net income $ 14,300 17,360 22,043 Dry beans Acre 53 22 22 Corn " 22 53 53 Alfalfa " Sugar beets " 4 4 4 Wheat " 16 16 16 Real estate credit $ 14,334 14,305 Chattel and private credit $ 16.072 16,072 Yearlings fed. Pd. 1 Head 8 120 138 " Pd. 2 " 8 120 138 Dairy Cow 25 22 13 Sows farrowed, Qu. 1 Sow 2 I! N Qu. 2 II N I! Qu. 3 If II II Qu. 1+ n (22 Hog Price @'§13.23[th. Net income $ 15.155 17.448 22.076 Dry beans Acre 22 22 22 Corn " 53 53 53 Alfalfa " 5 Sugar beets " 4 4 4 Wheat " 16 16 16 Real estate credit $ 20,887 14,295 14,283 Chattel and private credit $ 5.777 16,072 16,072 Yearlings fed, Pd. 1 Head 118 138 " Pd. 2 " 118 138 Dairy Cow 25 22 13 Sows farrowed, Qu. l Sow 21 2 2 ” " .Qu. 2 " 21 " _" Qu. 3 " 21 2 u R Q11. 4 " 21 (3) Hog Price @’§16.§Z[th. Net income $ 21,686 21.916 23.060 Dry beans Acre 22 18 22 Corn " 53 53 53 Alfalfa " ll 15 6 Sugar beets " 4 4 4 Wheat " 16 16 16 Real estate credit $ 23,843 19,865 24,893 Chattel and private credit $ 13,356 16.072 16.072 Yearlings fed, Pd. 1 Head 2 41 “ Pd. 2 " 41 Dairy Cow 13 3.4 10 Sows farrowed. Qu. 1 Sow 34 34 28 " ' Qu. 2 " 34 34 28 u u Qu. 3 n 34 34 28 " " Qu. 4 " 34 34 28 .pdonwaounu bonfiopon ma mcauovao mane .oofiym moon on buds» ogu one .oodhm won op vnooom on» .ooaad choc map mo Ho>oH on» op whammy oocodwom on» ca popped pmnam one .haobflpoodmou .moOde 30H one asadoa .nman on hogan A use 2 .m unoppoa ommo nomad ons\m 92 3.0m :mdm mmfim no.3 Rt? 9.3 31% .313 $.13 .. cope?" 3.3 om.m¢ 58.3: ma.ms mm.am Hm.m: Hm.ma mu.mm mm.mn mo.m¢ opow\w eqmamouo mo.N mo.m mw.m on.N om.m on.m mm.N H0.N s on .>oz I ma .poo HH.N oo.m mo.m uo.~ om.~ om.m mo.~ = ma .»00 I .pmom = pmded wo.N Hm. aw.H om.N om.m mm.a mm.H Hw.m = had» I mash HH.N oo.m mo.m mo.m om.N om.N om.m 0m.N H©.N = he: w .hQ4 oh£\w .OOQ . .80: ..30h ..Gdh. "nonmq no. mo. mm. mm. 3H. 3H. NN. mm. mm. a Advance No.0: ow.m: mo.wH om.ha nm.o¢ mm.o¢ mm.nm mm.mm mo.~m = = : owes: Hm.wo ma.um mo.H: 00.3: mo.dm wo.dm dh.mm 3m.mm 0H.m: = = : poop nwmsm mm. Ho.NN mo.mm em.w am.w om.ma om.ma NN.HN onow\w : . :uoo wH.H ouom\fi pHEHH omeonam zoom "mmwpwbfipo:Uoum odam> Hdcfiwumz we own omm mom mm: mm: mmm :NN mam .mn: cm: honed Henommom mmn mm: mNm mm: boom mnflvoom mom ma am an nN 30m. msfisouhwm mom m m boom msoo hufida mm mm mm mm Hm = mcfivoom woufizanooa_zoq mm ow we no Headq< wcdmzon «com mm mm 0H ma = noposhpmnoo oadm ONH NNH mm mm wed mda moa OOH Hm , mace cemmnondm he: awn moe.o mmm.oa :mm.HH mmn.m mmm.n Hoa.o Hmm.m :ma.aa .em nomagonao coco "moawdmmm maopw an: n :2: “ sax; " mMmco «cagaoo oodfim gm: w“ u was: “ H mmdmm I «Had minus 2H zmHaoDDomm MDA<> HmHmo¢ OF QHMHDGMM mmmdeMDm 024 mezmszm>2HII.HH mqmse 93 Thumb model was estimated to be approximately $33 per acre. The.MVP's for sugar beet contract indicated the farm could pay from.$4l to $68 for another acre of sugar beet contract at the margin. The optimal organizations for the Large Dairy farm.were very similar to those for the SmallAMedium Dairy except the levels of the activities were higher. The resulting optimal organizations. resource acquisitions, and MVP's for the Large Dairy farm are presented in Tables 5 and 6 of Appendix B. The most significant difference between the organizations for the Medium and Large Dairy'farms is elimination of the dairy enterprise at MHL, MHM and MHH prices for the Large Dairy farm. The main effect of lowering corn price is more corn purchases and some substitution of dry beans for corn acreage at low livestock prices. South Central Area There are significant differences in the organizations of the representative farms between the existing and the programmed optimal organi- zations for the South Central area. The adjustments in organizations depend upon size of farm, type of farm. and prices. 2123 end gize Effects In 1960 firms in the South Central area were divided among livestock, cash grain. dairy and general type farms. Using the criteria employed in this study'the general type farms were reclassified into one of the other three types depending upon.which enterprise contributed the greatest percent to gross income. The resulting classification by type gave 30 percent livestock farms. 28 percent cash grain. and.42 percent dairy farms. These farms were. then classified by size. The size-type classification delineates the representative farm situations programmed. 94 The effects of size and type upon farm adjustments from the existing (1960) to the optimal organization are revealed in Table 12. The 1966 m projected prices for corn. hogs and beef cattle are used for the comparisons. All other prices used to obtain the optimal solutions are the 1966 projected prices. Table 12 shows the estimated gross incomes and proportions of income by enterprise for 1960 and for the optimal organization. Also. the optimal and 1960 enterprise levels are compared. It should be recalled at this time that the hog and beef cattle prices are about $3 and $4 per cwt. less. respectively. in the optimal solution than those used for estimating the 1960 gross income. See Table 6 in this chapter and Table A—3 in the Appendix A for the specific prices'used. In most representative farm situations the proportions of income derived from certain enterprises change considerably from the existing to the optimal organization. The most significant change for the Livestock farms is the two to two and one-half times increase in proportion of gross income coming from beef cattle sales. No feed grains are sold. livestock farms in 1960 had from 59 to 72 percent of their income from hog and beef cattle sales while in optimal organization the livestock sales contribute 82 to 89 percent of gross income. The most significant changes in income sources for the Cash Grain farms are the decreases in feed grain and cash crop sales and the large percentage increases in income from livestock sales. especially beef sales. The increase in proportion of income from beef cattle sales is from an average of 4 percent to over 70 percent of gross returns. No feed grains are sold; they are used by the livestock enterprises. r The Dairy farms change from dairy to dairy-livestock farms. Dairy sales contribution in 1960 was approximately 75 percent of gross income. 95 .mzom use msoo Auden .oappmo moon mo muonss: Mo mane» ca xoopmo>fia use Noyce mo memo» ma vopwpm one mdono\m N N NN NN NNN N NHH NN NN NNH NuHNa oNnaH 0H N NH NH NNH H HN NH NN HN NNHNQ asHeoz NH N NH NH NNH 0 NH NH NN NN NNHNQ HHNsN 0H N H N NNN 0H NNH 0N NNH HNH NHNNN Nmmo NNNNH NH N N N NNH o NN HN mN NN NHNNN emmu aNHNoz N H H H NNH N NH NN NN NH NHNNN emao HHNaN ON NH 0 N NNN NN NN NN NNH HNH xoopmo>HH NNNNH NN NH N N NON NN NN NH NN NN NoopmosHH aeHeoz ON NH N o NN NH NH NH N NN Noosmo>HH HHNaN \MNHo>oA N N N NN NN NN o N N o N NNN.NN NNN.NN NuHNa NNNNH N 0H N HN NN HN o N NH 0 N N0N.NN NNN.0H NNHNQ asHNmz N NN N NH NN NN o N HH 0 N NNN.0N HNN.N NNHNN HHNaN NH N N H N NN N NH NN o NN NNN.oN HNo.NH :HNNN ammo NNNNH N NH N N N NN N NH NN o NN NNN.NN NNN.N :HNNN emao aeHeoz N NH N N N NN N N NN 0 NH NNN.NH HNN.N cHNNN emao HHNaN NH OH on o N NN NN HH NH 0 N NNN.NN NNN.NN Neopmo>HH NNNNH NH NN NN N N NN NN 0H HH o N NNN.NN NNN.N NooemN>HH aeHeoz N HN 0N NH N HN NN N N o N NNN.NN oNN.N N Noopmo>HH HHNaN omdm Henna n oeoocH mo soapy ohm who imHasHp.."NN.H“HNSHN.ONo..H“HNaHN.ouo..H"HN3HN.o“o..HumNaHp.."o..HuHssHp..NN.NH“ NOHNNNHHN spam mp0 mlllllmmmm u huflma ” oapvmo moom" .omm ammo " mademo uwmmuoaoomH among" obfipepnomonmom «NNN HNNszo mHDom was 2H mzm4h mom mqm>mq mmHmmmmezu 92¢ mmHmmmwazm Hm EXOUZH mo Bzmommm Qz< QSOQZH mmomUII.NH manda 96 but in the optimal organization dairy sales contribute only 23 percent. There is a slight increase in the proportion of income received from hog sales from 7 to approximately 12 percent. The greatest change is from 0 percent of sales made up of beef cattle in 1960 to near 55 percent in the optimal organization. Again, no corn is sold. In the optimal organization, based on the type of farm criteria for this study, all farms become Livestock farms at medium projected prices. The changes in the levels of the enterprises are presented in the lower half of Table 12. The acreage of farms and quantities of resources already on hand affect farm adjustments, particularly the level of the activities. The level of all activities varies directly with farm size except the hog enterprises. The level of these activities is more dependent upon the quantities of hog farrowing and feeding facilities already on the farm (see Table 5 in Chapter III for quantities of these resources). The feed grain activities are approximately the same for the existing and the optimal organizations. Cash crops, mainly soybeans, increase in acreage. This land for the soybeans has been shifted from the hay crops. The wheat acreage is grown up to the acreage restriction. All other crops are approximately the same as the 1960 levels. No feed grains are sold. The changes in crop enterprise levels are presented in the lower half of Table 12. The optimal level of the dairy activity is about the same as in 1960. The main difference in the dairy activity levels occurs on the Small and Med- ium.Dairy farms where increases of 2 and 3 cows occurred. Changes in live- stock enterprises are shown in the lower part of Table 12. Beef cattle and hog enterprises experience many-fold increases for all representative farm situations. In the optimal organization,-the level 97 of the beef cattle enterprise ranges from 63 head on the Small Livestock farm to 499 on the Large Livestock farm. The hog enterprise increases from 12 sows (one to fourufarrowings) in.l960 to as high as 60 sows (single farrow- ings) on the Small Livestock farm.in the optimal organization. The additional resources required to change the activities to the levels indicated by the optimal reorganizations are presented by representa- tive farms in the following section to this chapter. Eiggcts of Priges on Organization The prices of corn, hogs and beef cattle were varied in the South Central model, also. Each price took three levels (high, medium and low) which lead to 27 different price combinations and 27 optimal solutions. Not all solutions were unique. On the average, there were usually from 6 to 12 significantly different solutions for each representative farm situation. The corn price had the least effect on organization of the three prices varied; therefore, only the solutions with corn at the medium price of $.97 per bushel are presented in the text of this thesis. Many of the solutions presented below may be identical, while the revenues may be difference since prices vary. A lower corn price resulted in greater corn purchases and a slight increase in the hog enterprise relative to the beef cattle enterprise. The effects of increasing the price of corn from medium to high were decreased corn purchases and a slight increase in beef production accompanied by a small reduction in the swine enterprise. Livestock Farms The Livestock farms delineated in this study have facilities for both hogs and beef cattle and grow cash grain crops, primarily wheat and soybeans. The Small Livestock farm is less than 100 acres in size, while the Medium and Large Livestock farms are 100 to 200 acres and over 200 acres, respectively. 98 The programmed optimal organizations for the Medium Livestock farm are presented in Table 13. The solutions for the medium corn price and vari- ous beef and hog prices are given in this table. Reading across the table, one can observe the effects of changing beef prices on organization. By reading down the table, the effects of varying hog prices are exhibited. At low livestock prices, the Medium Livestock representative farm becomes a general type farm producing cash crops, feeding 46 beef steers, farrowing l3 sows, and milking 16 grade A dairy cows. When prices are MIM, MLH and MMH the principal enterprise is beef cattle with droves ranging from 244 to 262 heads. The hog enterprise becomes the dominant enterprise at MML, MHL and.MHM prices. At MMM and MHH prices a combination of beef cattle and hog enterprises is optimal. Wheat is always grown up to the acreage restriction. The net incomes for the different organizations and the credit required are given in Table 13, also. Some of the other resources acquired to obtain the optimal organizations are stated in Table 14. Large corn pur- chases are required for medium or high livestock prices. Additional invest- ments are required in 38 to A 55 units of beef facilities and in swine facilities. Some seasonal labor is required. The marginal value productivities (MVP's) for selected resources are presented in the lower half of Table 14. As is exhibited by the MVP's of cropland and.land rented, it would be more profitable for the farm to become more intensive. The rental rate for land in the South Central area was estimated to be $20 per acre. In Phase 1, farm.size was not permitted to vary; therefore, cropland and presently rented land had to be forced into the solution. This should explain the lothVP's for land. The optimal organization of the Small Livestock farm includes the same activities as the Medium Livestock farm with only the levels different. TABLE 13.-HOPTIMAL ORGANIZATIONS FOR MEDIUM LIVESTOCK FARM IN THE SOUTH CENTRAL AREA - PHASE 1 Beef Prices per th. Corn Price @ $.97/Bushe1 Unit 2 $16,333 : $20045 : $2,056 Q) Hog Price @ $11.14/th. Net income $ 7,386 10,417 14,860 Soybeans Acre 31 31 31 Corn " 47 47 47 Alfalfa " 22 21 21 Wheat " 18 18 18 Real estate credit $ 9,411 13,073 12,526 Chattel credit $ 9.355 9.355 Private credit $ 2,400 2,400 2,400 Yearlings fed, Pd. 1 Head 46 126 131 " " Pd. 2 " 126 131 Dairy Cow l6 2 Sows farrowed, Qu. 1 Sow 10 H II Quo 2 II II II Q11. 3 I! II II Qu. 4 II 3 (2) Hog Price @ $13.98L'th. Net income $ 9,632 11,068 15,097 Soybeans Acre 31 31 31 Corn " 47 47 47 Alfalfa " 22 21 21 Wheat " 18 18 18 Real estate credit $ 16,514 12,683 12,374 Chattel credit $ 9.355 9.355 9.355 Private credit $ 2,400 2,400 2,400 Yearlings fed, Pd. 1 Head 104 122 " " Pd. 2 " 104 122 Dairy Cow 6 2 Sows farrowed, Qu. 1 Sow 31 13 11 I! " Qu. 2 I! 31 3 It I! QM.° 3 n 31 13 " " Qu. 4 " 31 3 2 (3) Hog Price @ $16.82flmt. Net income $ 17,010 17,010 17,362 Soybeans Acre 31 31 31 Corn " 47 47 47 Alfalfa " 13 13 17 Wheat " 18 18 18 Real estate credit $ 20,562 20,562 15,892 Chattel credit $ 9.355 9.355 9.355 Private credit $ 2,400 2,400 2,400 Yearlings fed, Pd. 1 Head 46 II II Pd. 2 II 14,6 Dairy Cow Sows farrowed, Qu. 1 Sow 36 36 25 " " Qu. 2 n 36 36 25 II II Qu. 3 II 36 36 25 II n Qu. 1+ II 36 36 25 .pdonmeAnp vocawpoh ma weanodho mane .ooanm moon op vnfinp onv use .ooaum won on vcooom can .ooaum :uoo on» no Ho>oH can ow whammy oonosvom can :a popped pmudm one .haobflpooamon .moouua 30H use adwvoa .nmwn op homey A one 2 .m whoppoa omwo nomad o£e\m 100 NN.: Hm.m mo.H mo.a Hm.a Hm.a mm. mm. moxa = deacon vcwq mo.ma m:.ma om.m om.m oa.m oa.m eo.m do.m om.m ceec\w . eccaaono H:.N mm.m Ho.m Ho.m mo.m m©.m mm.m mm.m Ho.m = on .>oz I ma .poo mm. = ma .eco I .eecm = pmsws¢ H:.N mm.m Ho.m Ho.m mo.m mm.m mo.m mm.m Ho.m = haze I mesa H:.m mm.m Ho.m Ho.m mm.m mm.m mm.m ma.m Ho.m c has I .ud< opHfiH\$ 0009 u 03 .090“ ...-MMH. agenda co. NH. mm. mm. ca. ea. mm. mm. mm. a Heeeceo oe.em oe.mm om.mm om.mm Ne.mm Ne.m~ ma.em Ne.mm on.mm e e e aces: hmium NW.mN 0N 3.3 owed: dw.Nm imemm awed: amid: ©Nc+3 .. .. a Shoo ouom\a pdEHH omwohow :wom "moapabfipodvon osae> awn. um: can man :0: :0: mm: ma: own ea: in: .mun sax honed Hanomdom man no: me: am eem cecm wcecccm mom ma mm mm NH 30m wsdnohndm mom :a a g - mzoo hufldn mm mm mm on been msavoom voeacwnooa.zoq mm mm mm om nudge .4 mceeecc eccm am e vaposhvmqoo oaam macs vomdnonsm awn Heo.a moe.oa mam.aa mmm.aa mmo.m cea.m mmm.m mma.m cem.oa .sm ccecccncm neco mmmmmmmmmlmmmmw 442 u as: a an: " Isms. " :2: u :4: u :4: n as: 9 mm: M van: M \MchHpmmanaoo madam H mmamm I «Qua qamyzmo meaom 2H seam uooamm>aq zeHnmz zo mmomaommm ameomqmm mom maHaH>Haoonomm _ 8.35 .2253 92 mzouafiHzaomo gee SEES. 8 858mm 83.5%.“ 8:. maszEzHauéa as 101 The optimal organization, additional resource requirements, and MVP‘s for the Small Livestock farm are presented in Tables 7 and 8 in Appendix B. The level of the beef cattle enterprise at MLH prices is 180 steers, whereas for the same price combination on the Medium farm there are 262 head of steers. At MMM and MMH prices for the Small farm farrows 58 and 15 sows, respectively, while the Medium farm farrows only 32 and 13 sows. The dairy enterprise is at a slightly higher level on the Small Livestock farm for MLM and MMM prices than on the Medium Livestock farm. In all other respects, the levels of the crop and livestock activities for the Medium Livestock farm are greater than the same activities on the Small Livestock farm. ' The MVP's for cropland and rented land is much higher on the Small Livestock farm than on the Medium Livestock farm. In all cases, the MVP's for cropland are greater than the rental rate of $20 per acre. It ranged from $26.61 to $35.86 per acre. . The optimal organizations for the Large Livestock farm were very simi- lar to those for the Medium Livestock farm. The levels of the activities were higher; for example, the beef cattle activity for MMH prices had 516 steers compared to 244 for the Medium Livestock farm. More resources were acquired on the Large Livestock farm. The optimal organizations, resource acquisi- tion. and MVP's for the Large Livestock farm are stated in Tables 9 and 10 in Appendix B. With respect to the MVP's, rented land had a negative MVP because the farm size was forced to remain constant, that is, rented land was forced into the optimal solutions. The MVP for cropland in the case of BED! prices should be negative instead of zero, but there was an error in one of the controls for the programming routine which allowed the farm to idle some of its own land until the MVP was zero. 102 Cash Grain Farms The Small. Medium and Large Cash Grain farms typify the less than 100 acres. 100 to 200 acre. and over 200 acre cash grain farms in the South Central area. In 1960. these farms had very few livestock or livestock facilities. Usually some muber of the family had an off-farm Job. In the programmed solutions all of these farms turn out to be livestock farms except. at low livestock prices. However. acreages of feed grains and cash grains were approximately the same for both the 1960 and optimal organization. Sole expansion in soybeans occurred at the expense of hay crops. The optimal organizations for the Medium Cash Grain representative farms are presented in Table 15. This table exhibits the effects on farm organization of varying hog and beef cattle prices. At MLL prices the Medium Cash Grain farm is a Dairy farm with 24 grade A dairy cows. When prices are MIM. MLH and MMH. the major enterprise is beef cattle. Hogs become the major enterprise at m. MEL. MHM and MRI! prices. MMM prices result in both hog and beef production. 'The size of the beef. enterprise ranges from 17 head at MLL prices to 224 head at MLH prices. Sow farrowings vary from 5 at MLL prices to 12+ at Mill. prices. Wheat is always grown to the wheat acreage restriction. The additional resources required to reach the optimal organizations and the MVP’s for selected resources are presented in Table 16. Again. large quantities of corn purchases are required and investments in beef and hog facilities are necessary to obtain the optimal. The MVP's for crop- land are low. It is characteristic throughout the results for the South Central area for the MVP to be lower on cropland as the farm size increases. The optimal organizations. resource acquisitions. and MVP's for the Shall and Large Cash Grain representative farms are presented in Tables 11. 12. 13 and 14 in Appendix B. The organizations are very similar to those 103 TABLE 15.--OPTIMAL ORGANIZATIONS FOR MEDIUM CASH GRAIN FARM IN THE SOUTH CENTRAL AREA - PHASE 1 Beef Prices_per th_. Corn Price @I$.97/Bushel Unit $16. 33 $200 457: $24i36 (12 Hog Price @r§1l.14[th. Net income $ 7,654 10,401 14,199 Soybeans Acre 18 41 41 Corn " 43 43 43 Alfalfa " 43 l9 17 Wheat " 22 22 22 Real estate credit $ 19.050 15.750 16.755 Chattel credit $ 7,624 7,624 Private credit $ 2,700 2,700 2,700 Iearlings fed, Pd. 1 Head 17 108 112 " Pd. 2 " 108 112 Dairy Cow 24 2 1 Sows farrowed, Qu. l Sow 1 I I! Que 2 '1 fl " Qu. 3 II II II Qu. Ll, II 1+ 2 Ho Price @> 1 . 8 th. Net income $ 9,511 10,645 14,288 Soybeans Acre 39 41 41 Corn " 43 43 43 Alfalfa " 22 19 17 Wheat " 22 22 22 Real estate credit $ 21,114 16,407 16,298 Chattel credit $ 7,624 7,624 7,624 Private credit $ 2,700 2,700 2,700 Iearlings fed, Pd. 1 Head 97 109 " Pd. 2 " 97 109 Dairy Cow 9 2 1 Sows farrowed, Qu. l Sow 24 4 l u " Qu. 2 u 24 4 " " Qu. 3 " 24 4 II II Qu. 1+ " 24 4 ’4 {:2} Hog Price @ $16.821th. Net income $ 15,800 15,814 15,902 Soybeans Acre 41 41 41 Corn " 43 43 43 Alfalfa " 12 12 11 Wheat " 22 22 22 Real estate credit $ 26,123 26,123 25,216 Chattel credit $ 7,624 7,624 7,624 Private credit $ 2,700 2,700 2,700 Yearlings fed, Pd. 1 Head 9 ' Pd. 2 " 9 Cow 1 1 1 Sows farrowed, Qu. l Sow 31 31 28 " Qu. 2 " 31 31 28 " " Qu. 3 " 31 31 28 " ' Qu. 4 " 31 31 28 .psonmdougp voodoaon ma maduovno wage .ooaum moon on vufigg can one .oodnm mo: 09 uncoom one .ooaum once on» me HoboH onp op whomou oocoonm one ca uopaoa pmuam one .haobflpoommon .mooaud 30H use adduoa .nman op homey A new a .m unopuoa omoo momma one\m 104 .ma.oa AA.N mo.H no.a m:.m mo.a nm.m mm.o mo.a = cannon undo Hm.- Ho.ma oo.m om.m om.m mm.m Ho.n do.“ oo.m oqu\» unmamono mm.~ Ho.m Ho.n Ho.m = on .poz I ma .poo mm. = ma .poo . .pmom = #mdm:< H¢.N mm.~ :w.~ so.~ mo.~ am.~ om.~ om. ¢Q.N = ease I onus mo.~ mn.~ Ho.n Ho.n mo.m om.m om.m mm.~ Ho.m = a«x_- .uo4 o£\$ .08 . 0H.“: .090“ ..55 . "hang mo. NH. mm. mm. ma. ma. on. on. mm.. « Hapfimmo wo.¢m om.mm am.m~ un.m~ Ho.mm um.m~ mm.a~ mn.m~ mn.mm . = ... axon: 5:.mm wa.mm mm.:: mm.:: Hm.:m mm.mm mo.¢¢ wo.:¢ no.3: = . =. ,3 shoe onoo\a pdada ommonoo zoom “mofigdbdgosvou odHo> Has no: mea saw and oma mma HNH mm no sea .un no: gonna Hasommom mam mm: mm: mm on: neon mcaeooc mom om mm mm mm .3om mcflsounam mom mm m a - mace hudon m am so no no exam madame“ eoufiqanooa sag m am so no no mafia: .< magmaom comm Hm g uoposnamcoo oaam woos vomonondm ham oam.m mam.m mum.m mooJo omo.m Nua.m mm:.m Hmm.m .am uumanonzm :uoo "gonad o oaopH gan. " as: u an: “ 2:: u 2:: u an: n man. " mg: n max. 9 pans " - 4mm: Apoqanaou ooanm « “ H mmdmm I «and AHHo=Qomm mDA<> AMHmo< ca QHmHDQmm mmm2HII.oH Hands 105 for the Medium Cash Grain farm; however, the levels of the activities vary directly with the size of farm and the initial resource base. For example, at MMH prices the Small farm has 122 head of yearlings and 8 sows farrowing, while the Large Cash Grain farm has 364 steers and 11 sows farrowing. All solutions have wheat at the level of the acreage restriction. The MVP's for rented land is above the rental rate for the Small farm and negative for the Large farm. Family labor (operator and family members) supply is seldom exhausted on the Small farm, but the Large farm buys additional labor under every solution. Dairy Farms The price effect from.varying livestock prices does not drive dairy out in the South Central area as it did on the Large Dairy farm at MHH prices in the Thumb. However, the level of the dairy enterprise decreases as live- stock prices increase from low to high. The dairy enterprise for the Small and Medium Dairy farms is an exception since it is made up of the grade A and grade B facilities on these farms; therefore, the resulting enterprise is a combination of A and B dairying. Since the resources are statistical averages of those making up the size-type strata, this situation needs to be explained. If the solution results in both grade A and grade B, then the following reasoning may EPPLY; There is no mixture of grade A and grade B production on an individual farm, but those farms that have grade A facil- ities would produce grade A and those that have grade B facilities would produce grade B. The Small Dairy farm had 7 units of grade A capacity and 5 units of grade B. The Medium Dairy farm had 10 units of grade A capacity and 8 units of grade B facilities. These farms, in optimal organization. produce up to the grade A capacity limit, and the remainder of the produc- tion is grade B. Any expansion that occurred was in grade B production because of the relatively inexpensive cost of grade B facilities. 106 The optimal solutions for the Medium Dairy farm are presented in Table 17. The effects of varying hog and beef prices are shown in this table by reading down and across the table. At low livestock prices the dairy enterprise is most important. When prices are MLM, MLH and MMH, the farm becomes a beef-dairy farm. A hog-dairy farm results when prices are MML. MHL, MHM and MHH. MMM prices give a beef-dairy-hog farm. The dairy herd ranges from 13 cows at MLH and MHM prices to 35 cows at MLL prices. The additional resource requirements and.MVP's for the Medium Dairy farm are given in Table 18. The MVP's for land indicates that it would not be profitable to expand farm size under the assumed price and output condi- tions. However, in almost every solution the MVP's for corn land and wheat land are above the rental rate. This indicates the farm would very likely find it profitable to expand these acreages ithhis type of land could be obtained. The optimal organizations for the Small and Large Dairy farms are very similar to the solutions for the Medium Dairy farm. The levels of the activities are the only essential differences. The effects of varying hog and beef cattle prices, optimal organizations, resource acquisitions. and JMVP's for the Small and Large Dairy farms are presented in Tables 15, 16, l? and 18 in Appendix B. thimal Organizations and Adjustments for Phase 2 Phase 2 of the analysis permits land, machinery and managerial labor to vary. The initial levels of these resources were the same as for Phase 1. As part of the survey, data were collected from the farmers concerning potential land rentals and land purchases. Farmers interviewed *were questioned as to the quantity, quality, location and term of acquisi- tion of land tracts available for purchase and/or for rent. Efforts were made to delete all double counting. This information was summarized and 107 TABLE 17.--OPTIMAL ORGANIZATIONS FOR MEDIUM DAIRY FARM IN THE SOUTH CENTRAL AREA - PHASE 1 - 2 Beef Prices er tha Corn Price @l$.97/Bushel : Unit *16.:‘_—2034_-_E%:24__6 ‘12 Hog Price @’§11.14[th. Net income $ 9,924 12,658 16,284 Soybeans Acre l3 6 Corn " 43 43 37 Alfalfa " 64 33 32 Wheat " l9 l9 17 Real estate credit $ 2,583 12,191 12,217 Chattel credit $ 8,959 8,959 Private credit $ 2,100 2,100 2,100 Yearlings fed, Pd. 1 Head 8 99 101 " Pd. 2 " 8 99 101 Dairy Cow 35 18 17 Sows farrowed, Qu. 1 Sow 2 u n Qu° 2 n u u Qu. 3 u II II Qu. [4, II 1 2 Ho Price @ l . 8 th. Net income $ 11,513 12,793 16,340 Soybeans Acre 13 12 7 Corn " 43 43 38 Alfalfa " 32 33 32 Wheat " l9 19 17 Real estate credit $ 15,056 12,058 12,183 Chattel credit $ 8.959 8.959 8.959 Private credit $ 2,100 2,100 2,100 Yearlings fed, Pd. 1 Head 92 99 " Pd. 2 " 92 99 Dairy Cow 18 18 17 Sows farrowed, Qu. l Sow 26 4 3 " Qu.2 " 26 1 II II Q11 3 II 26 )4, ” ” Qu. 4 " 26 1 (:22 Hog Price 6 $16.82l0wt. Net income $ 17,228 17,412 17,687 Soybeans Acre 41 37 12 Corn " 42 42 38 Alfalfa " 22 22 26 Wheat " 19 18 17 Real estate credit $ 20,816 20,977 20,380 Chattel credit $ 8.959 8.959 8.959 Private credit $ 2,100 2,100 2,100 Yearlings fed, Pd. 1 Head 8 " Pd. 2 ” Dairy Cow 13 l3 l7 Sows farrowed. Qu. 1 Bow 28 28 26 ' Qu. 2 " 28 28 26 " " Qu. 3 " 28 28 26 " " Qu. 4 " 28 28 26 ¥ 108 .psonmeonnp wondepon ma wndnoono mama .oodnd Hoop op when» one one .oodum won on uneven one .ooana deco one mo HoboH onp on mnemon oonodwom one cw noppoa pond“ one .hao>fipoodmon .moofihd.3oa one seamen .nmdn op nomon A one z_.m noppoa oeeo nomad oga\l em.o Ho.mm Ha.~ mo. mo. ea Hma 0N m: .qq: :N.H mm.eH mn.m mm.m mm.N NM.N :0 mw.mn ea.om mom «on em moo.m . 42: mm. mm.nm ma.me we: ma: 3N mmo.oH am: an. om.m~ mm.me mm: ma: em wm0.0H zmz mm. am.na Ho.m Ho.~ H©.N Hw.N ma. mo.Nm ma.mm awn N mm mm mmm.m ZZZ KWmnHoflI 33280. SE mm. mm.na H©.N Hm.N Hm.N H0.N ma. oo.mm ma.nm men n ow om :Ho.m 24: mo: om om Hoo.m Ilmmmlun ::.0H mm.N ow.N mw.m mm.N mm. NH.NN mo.ma mmm N on on emm.m xx: oo.m mm.m mm.m mm.m mm.~ Hm. oe.m~ ea.sa ma: non NN N Haw.m mm: onwe\w oh“\% 6 onoe\w .ss sex eeee row 2 oeom sense .s. = enoa .dm M eds: oopnon used oneadoau om .>oz I ma .poo ma .900 I .pdom pmsmn< has» I ease he: I .nd< coon gag: conch aogdho "honed Heeaeeo neon: a once pHaHH oweoeoe deem 2 = “moapfibdvoeoon oeHe> He: he: hoped Henomeom mnfiooom mom mnfizounem mom once huaea mndooom ooednenooa son mneonon moom ooponnpmnoo oafim oomenoudm hem oomenoadd neoo “wonfidmoe maopH H mmdmmI HHoDQomN - mbA<> A<2H0m42 924 monHmHmo< 09 QMMHbomm.mmmoH one oe enowon oononooe one nH noeeoH emnHm one .haobHeoodeon .mooHnd_3oH one anooa .ann oe nomon A one 2 ..m mnoeeoH omeo nomad oga\l 112 mm. oa.H oa.H es.H om.H mo.H mo.H mo.H .as\e sooeH HeHaoeesez Ho.mm os.mH se.om ee.oe HH.mH em.aH mo.om mo.o~ am.om a oseH ooesom oH.HH mm.mH oo.mm oo.m~ so.eH am.mH NH.HN NH.HN om.He oaoe\e - eseHooso aH.N Ha. Ho.~ Ho.m ma.H ea.H mm.H mo.H em.H a soneH mH .eoOI.eaom Hm. .nn\w honed emnwn< we. ac. om. om. OH. NH. HN. HN. mm. a HeeHaeo "eoHeHbHeonoon onHe> HenH he: Hoe NHo mHo mos seem meHooen mom mH an am am .2om eeHzoaaem mom HI HI HI HI HI HI HI HI HI = osoo auHeo om me am we mm mm eeoe meHoeoe .eeos_on om we so we no me eHse .sa esHeeos Hoom oH as me me me we . me me me a e manoHe seen me mHI moI moI ooI moI moI moI moI .oeo enoe .oHeoe sweeten sHeao ea c: es 0: 0: on on o: o: a oseH eooo smHs ease ._ oseH eooHao sense be we we we mm we we mm me me a \moseH ooesoe oe Hm ones eseH - mam mam me mm me we ame .ae .oo aooeH HeHaemeeex nee- mmoI meoI meoI meoI meoI meoI meoI meoI a aoneH aHHsea momI HomI onI OHHI HHHI monI emmI mamI eHnI seem aoneH aoeeaeoo ama Hoe woo woo one mam one awe meo.H .eae so: eoneH Hesoeeoe \muodom no ooaHn oe maoeH HHz. " Hz: a He: _" so: a 2:: a new “ eqz “ as: a me: xmmmoHeeansoo oonm N mmHHoDQQ¢m mods, gnaw: nze. mZOHedezfivmo Adamo E04 on. gonna gang 2 BEEN-....QN Era 113 operator and family labor occur, additional managerial labor is acquired; sales of grain harvesting and purchase of corn picking equipment are neces- sary to obtain the optimal organizations. In the lower part of Table 20, the MVP's of certain resources are presented for the Medium Cash Crop farm. In comparing the MVP's with those for the same resources in Phase 1, one finds them considerably smaller in most cases. This is to be expected when variation in restricting resources is allowed. The optimal organizations for the Small and Large Cash Crop farms vary from the optimal organizations for the Medium Cash Crop farm as they did in Phase 1. The most significant difference was the use of land contract credit under the MLM, NHL and MMM price situations, but the Large Cash Crop farm never uses this source of credit. The optimal organization, resource transactions, and MVP's for the Small and Large Cash Crop farms are not pre- sented in this thesis but are summarized and on file in the Department of Agricultural Economics. However, the optimal levels of specific resources for all representative farm situations at medium prices are compared in the last major section of this chapter (pages 128-140)- Extended Phase 2 Model The extended.model for Phase 2 results from increasing the resource restrictions for land 2 rental and land 2 buying. The Large Cash Crop representative farm.was used as an example to study the effect of further farm land area expansion on farm organization. The optimal organization for the Large Cash Crop farm at mggigm_prices using the extended.model is pre- sented in Table 19 in Appendix B. This table compares the original (1960), PhaSe l optimal, Phase 2 optimal, and the extended Phase 2 optimal organiza- tions of the Large Cash Crop farm for the Thumb area. The optimal organization at MMM prices differs very little from the organization using the Phase 2 model at the same prices. The farm rents 114 all the available land 2 and increases crop acreages. Dry beans acreages increase from 60 to 75 acres. Corn increases from 169 to 210 acres. Oats increase from 32 to 40 acres, sugar beets increase from 25 to 31 acres, and wheat increases from 52 to 64 acres. Thus, crops stay in about the same relationship to each other though total acreage increases. There are increases of 62 steers fed and 7 sows farrowed annually. The total credit used is expanded from $54,399 to $64,190. Some additional seasonal labor and managerial labor are hired. With the extended model, more beef cattle and fewer hogs are produced at high livestock prices and the medium corn price. When land is allowed to vary'and livestock prices are low, corn is sold and beef steers are reduced from 57 to 15 head. The effects of varying the price of corn when land is varied, as in the extended model, are as follows: (1) When increasing corn price from medium.to high. less corn is purchased and corn is sold at low livestock prices; (2) when corn price is low, more corn is bought and less grown, while dry beans take over the land that was used for corn production at medium and high corn prices. The main effects of allowing further expansion of farm size in the extended Phase 2 can be summarized as follows: (1) Increases in crop acreages occurred; (2) slight increases in livestock activities were indi- cated; and (3) more labor and machinery were acquired. Dairy'Farms When land and other resources are allowed to vary in the model, the effects of varying corn, hog and beef cattle prices are much more pronounced than in Phase 1. In Phase 1 dairying was hard to drive out of the organization, but in Phase 2 dairying is in the optimal organizations only with the MLL and MML price combinations. In reality this is what has 115 been happening in the Thumb area. Some of the main reasons why this happens are that the grade A dairy enterprise takes large quantities of labor. particularly managerial type labor and the return for labor from cash crop production is relatively high. The optimal organizations for the SmallHMedium Dairy farm are presented in Table 21. The main differences between the organizations in Phase 1 and Phase 2 for the Dairy farms are the increases in crop acreages and the substitu- tion of cash crops for hog production in the case of MML prices. The net revenues are greater and the levels of the livestock enterprises, in general, are above those in Phase 1. The resource transactions necessary to achieve the optimal organizations for the Small-Medium Dairy farm are presented in Table 22. This table also includes MVP's for selected resources. The MVP's for the resources are, in general, much less than their’MVP's in Phase 1 except for labor. and it is higher. The most striking difference is probably the reduction in the amount of seasonal labor hired. Compared to the Cash Crop farm solutions, the Dairy farms require more managerial and seasonal labor purchases. The optimal organizations, resource transactions, and.MVP's for the Large Dairy farm were very similar to the SmallHMedium Dairy farm except the levels of the activities were usually higher for the Large farm. The most interesting difference for the Large Dairy farm was the number of steers fed out in period 1 relative to the number fed out in period 2 for the MLM and MMM pricecombinations. For example, at MMM prices 491 steers in period 1 are fed out while only 331 are fed out in period 2. This can be explained in part by the fact that the period 1 beef activity's major use of labor comes in the winter months when the crop activities are not competing for labor. South Central Area From Phase 1, several indications were revealed about potential 116 TABLE 21.--OPTIMAL ORGANIZATIONS FOR SMALLHMEDIUM DAIRY FARM IN THUMB AREA - PHASE 2 Unit : Beef Prices_per Cit. Corn Price @ $.99/Bushel , $15.08 : $20.20 I $24. 31 m (12 Hog Price e $10.89Zth. 8, 21,04 26. 1 II}: has ..i. 1 13% 33 937 Corn ‘ " 40 93 93 Alfalfa " 6 Sugar beets " 11 10 10 Wheat " 3O 28 28 Land contract credit used $ All other credit used $ 10,943 30,442 31,600 Yearlings fed, Pd. 1 Head 20 171 174 " Pd. 2 " 171 174 Dairy Cow 19 Sows farrowed, Qu. 1 Sow II II Que 2 II II II Qua 3 II II II Qu. Ll, II 2 W- Net income $ 19,213 21,115 26,951 Dry beans Acre 110 37 3? Corn " 43 93 93 Alfalfa " 6 Sugar beets " 12 10 10 Wheat II I 32 28 28 Land contract credit used $ All other credit used $ 26,299 30,401 31,571 Yearlings fed, Pd. 1 Head 169 173 " Pd. 2 " 169 173 Dairy Cow' 21 Sows farrowed, Qu. 1 Sow 7 2 2 " Qu. 2 " 7 II II Qu. 3 II 7 2 II II Qu. 4 II 7 ‘3) Hog Price e $16.5ZZth. Net income $ 26,739 26 .739 27,578 Dry beans Acre 37 37 37 Corn " 93 93 93 Alfalfa " 19 19 12 Sugar beets " 10 10 10 Wheat " 28 28 28 Land contract credit used $ All other credit used $ 36,481 36,481 40,807 Iearlings fed, Pd. 1 Head 63 I Pd.2 " 53 Dairy Cow Sows farrowed, Qu.l Sow 41 41 29 " Qu.2 " 41 41 29 n u Qu. 3 " 41 41 29 n u Qu. 4 " 41 41 29 117 .ca mcdpcou mopmofiucfi swam 0: mafia: vac ucda mcducou mopaOHuca mango any no peony ca swam mange 4 .omdnondd mopaOfivGa swam on use onm momefivca thGo on» mo peony ca swam mscfiar< .pfionmzouna uodfldpon ma mcfiuovuo many \m \m ow vndnp on# use .oOHAQ won on unooom on» .ooaua cuoo on» no HoboH 03¢ 09 mnomou oonodvom 02¢ ca hoppofl pagan was .hHo>duoodmou .mooapd 30H odd finance .nmfiz on nomon A one 2 .m mpoppoa ommo pond: ona\m am.a mm.a as. mm.na ma.:a Ha. mo.ma mo.ma an. H H:.H mo.a mm Ha.mm NN.NH an am.am nN.mH 3H.m No.~ NA.H NA.H m~.m mm.a mo.~ mm.a ma.a mo. mo. am. 3N. 0H. Hm m:o m:o : mm mm m- H- mm. mm. mm- m moa mo om mm on mm mm: mm: mm: o: o: o: o: 0: on on on ca on om mm mom mam 00H cod mm 9%. 9a- 9a- 9a. 2a- 33 3% 8% 8i 3% Han mom 03m cam sou E " mm: a - . u 44: a 422 u am: A Em: a £22 “ mo.a NN.NH mm.ma NN.N 0H. NN- med ow on an: 0: on om osm- one. Hon 24: NN- mod mm mm mm- 0: on n: can- was. mom mg: n :w.a mm.ma mm.HN m:.m HN. NN- woa as on an: on on m: can- was. can m2: H:.H .nn\$ mm.om g ma.om whoa\» HN.H = 03 .2; am. 9 mm: exam mm sow NNI = wm doom wand .:< 0m .. mmI .mao ono< 03 = on = ouc¢ mom .2: .do Oifll : omiI Adam :Hm .mp3 max nonuH Haduomacd: odda vopcom ucaamono gonaa ma .poo-.udmm honaH pmdmad 1.396 1%. "moafidbfiuosuon odHe> He: has mcfivoom mom mcazonnum mom mzoo huadn mcavoom .noos.soq mcfimzon Moom mcwxoam :uoo pcosmddwo pmobhan sauna used pmoo swan gnom aqua condom swan ham uaaa umpcom O \I quad gonad Hawuomadmz honed hHHEam manna nopunodo gonna quomaom \muvaom no vommiwou mammm \Mmcofiucfinaoo 82m 1‘ A pass A N mmHBUDQomm mqu> AdZHummHmo< OB QHmHDOmm mmm2HII.NN Hands .oofind moon 118 expansion. The very low MVP'S on cropland and rented land indicated that expansion along the extensive margin (increasing land area) would not be profitable in the South Central area with bare land priced at $283 an acre. Also. the relative high MVP'S on capital indicated that if further sources of capital were made available at prevailing interest rates, it would be profitable for the farms to borrow such capital. The prices farmers reported they would have to pay for land.were prob- ably high with respect to what would actually have to be paid. In most cases the MVP'S for wheat acreage and additional corn land were above the cost of renting an acre of land. This indicates that it would be profitable to expand if only the corn or wheat acreages could be acquired without acquiring the other land on the farm or if less were to be paid for land. Also, this indicates that renters could pay more than the current rental rate for such land or landlords could charge higher rental rates for wheat and corn acreages. In Phase 2 where land, machinery, family labor (operator and family mambers), and managerial labor were all variable, the optimal organizations . of the representative farms for the South Central area were much different than for Phase 1. Only the optimal organizations for medium corn prices and magigm types of farms are presented in this thesis. The other solutions are summarized and are on file in the Department of Agricultural Economics. Livestock Farms The outstanding difference between the results for the Livestock farms for Phase 1 and Phase 2 is the reduction in farm size in Phase 2. Land rented in 1960 is usually not rented, and at many price combinations land is sold. The sale of this land provides capital for expanding the live- stock enterprises. However, when the corn price is $1.17 per bushel, the farms seldom sell land, especially the Large farms. Even at high corn prices, the optimal solution indicates less land rental than in 1960. 119 The optimal organizations for the Medium Livestock farm in Phase 2 are presented in Table 23. The main differences between these solutions and those for Phase 1 are: (l) the reduction in crop acreages and (2) the increase in livestock activity levels. For example, at MLM prices the beef cattle enterprise increased from 252 to 298 head. At the same price combina- tion, soybeans go from 31 acres to zero and corn goes from 47 acres down to 24. The net incomes are higher in Phase 2 than Phase 1 at any given price combination. The most significant changes from Phase 1 to Phase 2 are exhibited in Table 24. This table presents the changes in resources required to obtain the optimal organizations. The most important indications in this table are the sales of operator and family labor, the sale of land (as much as all of the owned cropland), very little renting of land, the machinery sales, and the MVP's. The optimal organizations for the Small and Large Livestock farms dif- fered much the same way from Phase 1 as did the Medium Livestock farm. There was one real difference for the Large Livestock farm. At high corn prices, land was never sold. Cash Grain Farms The Cash Grain farms also sell land and fail to rent as much land as they did in 1960. This tended to be the case for all representative farms for the South Central area in Phase 2. There was, in general, a reduc- tion in crop acreages and a decrease in the quantity of capital borrowed since the land sales furnished capital and resulted in paying off the real estate debts. On the Cash Grain farms, dairy is less competitive with other activities in Phase 2 than in Phase 1. The optimal solutions for the Medium Cash Grain representative farm are presented in Table 25. 120 TABLE 23.--OPTIMAL ORGANIZATIONS FOR MEDIUM LIVESTOCK FARM IN SOUTH CENTRAL AREA - PHASE 2 Beef Pricesgper th. Corn Price @ $.97/Bushel : Unit : $15022 : .2004 : 24. 5 (1) Hog Price @ $11.1uzcm. ' Net income $ 9.355 12.775 17.952 Soybeans Acre 5 Corn " 33 24 24 Alfalfa " 22 18 18 Oats II 5 Wheat " 13 9 9 Credit used $ 12.832 14,679 14,359 Yearlings fed, Pd. 1 Head 46 149 154 n n Pd. 2 n 149 154 Dairy Cow l6 Sows farrowed, Qu. l Sow 10 II II Qu o 2 II II II Qu o 3 II n n Qu. 4 u 3 (22 Hog Price @r§13.28[th. Net income $ 11,554 13,325 18,065 Soybeans Acre 16 Corn " 33 25 25 Alfalfa " 16 20 19 Oats n Wheat " 13 10 10 Credit used $ 25,453 17,709 14,142 Yearlings fed, Pd. 1 Head 124 145 " " Pd. 2 " 124 145 Dairy Cow Sows farrowed, Qu. 1 Sow 33 3 12 " " Qu. 2 " 33 10 II II Qu . 3 II 33 3 " " Qu. 4 " 33 10 2 (32 Hog Price @I§l6.82[th. Net income $ 19,749 19,749 20,112 Soybeans Acre Corn " 17 17 19 Alfalfa " 8 8 ll Oats " Wheat " 7 7 8 Credit used $ 29,697 29,697 24,140 Yearlings fed, Pd. 1 Head 46 " " Pd. 2 " 46 Dairy Cow Sows farrowed. Qu. 1 Sow’ 41 41 31 " " Qu. 2 " 41 41 31 n n Qu. 3 n 41 41 31 " " Qu. 4 " 41 41 31 .sa mswpcoa momeHdca swam o: oawnz #50 mama wsfipmon momeflvcw appso exp «0 psonm :H swam mscfls «\m .ommgondm mopmofiucd swam on use mamm mopeoduzfi hupco mnv Ho pdoam ca swam mamas «\m .psonmsonnp vocadpoa ma mnaaovno mags .ooaam moon on vafigp can use .oodnm won on vacuum one .ooapd choc can we ao>mH on» op whammy mocosvom 0gp ca hopped panda age .hHo>dvoodmma .moOfinm 30H use endows .nwan op names A use 2 .m mamapoa ommo nomad one\m 121 Ho. No.H No.H Ha. .nn\w honed Hmwnmwmcmz = vcma beacon mm.m Hm. 00.0N 00.0N Hm.wa om.mH 0:.HN 0:.HN mm.NN onom\» vcmadouo H:.N we. mw.H mw.H mm.H m©.H om. om. @3. = nonma on .>ozumH .poo .an\w honed pmdwd4 so. so. mm. mm. ma. ma. mm. mm. mm. a H.9Ha.o “mafipfi>fiposnmmm,osaw> Hmmmwnmz 3H: man mmm mmm vmom wsfivoom mom 0N wN mN ma mom quzonnmw mom ea m- N. N- m- N- N- N- m- emom mzoo snags an no on so = wnadoom .£008 309 Hm mm on :0 pass .:< wzumso: moom an. me. :5. 3a- ma- in. an- ea- ma- . = mcaxoaa choc wmI mmI NmI NmI own mm: wmn own HmI .dmo ono< .QAdvo pmo>aea cameo . used 9.00 swag scam = ecea eooaaa swan sum 0H 0H NH mN mm mm MN = \mfizea oopsom was mun sin ouu mun was was oao< snag .nn .do honed Hmfinowmcwz mum- mam: mam- mam- mam- mam- mam- mam- mam- = gonad aaaaaa mmdn mwal NmNI NmNI omen mwsI amen wosl owNI Adom honed aopwaodo mmH 00H me wwN NdN NON Nam mmN mNm .mun aw: hoped Hmsomeom . \muvaom no doafidmom mSmpH gas A 422 " qmz " 2m: :2: A sq: “ m4: " mzz " mm: a " Ixmmdmfimmmfinsoo modem " was: " N mm«mm I HH ZBHQMS zo mmomuommmnnmaomqum.lpm mmHawaHoDnomm m§> 3H3?! de monaimszog gmo End 2. Edam flag 92¢ EEEHII5N amde 122 TABLE 25.--OPTIMAL ORGANIZATIONS FOR MEDIUM CASH GRAIN FARM IN SOUTH CENTRAL AREAL - PHASE 2 4g ' : . Beef Prices per th. Corn Prices @I$.97/Bushel : Unit :_§16:33_?_§20.45 : $24.56* (1) Hog Price @>§11.14[th. Net income $ 11,226 13,764 18,109 Soybeans Acre 33 30 Corn " 33 3’+ 16 Alfalfa " 14 17 20 Oats " Wheat " 19 19 12 Credit used $ 3,174 26,755 13,798 Yearlings fed, Pd. 1 Head 9 117 136 n " Pd. 2 " 9 117 136 Dairy Cow' 9 1 l Sows farrowed, Qu. 1 Sow 4 II II Qu . 2 II II II Qu o 3 II II II On . 1+ II 1 2 Ho Price @. 1 . 8 th. Net income $ 12,327 13,923 18,150 Soybeans Acre 33 25 Corn " 34 31 16 Alfalfa " l4 18 20 Oats " Wheat " 19 18 12 Credit used $ 21,274 25,114 13,724 Yearlings fed, Pd. 1 Head 112 133 " " Pd. 2 " 112 133 Dairy Cow l 1 l Sows farrowed, Qu. l Sow 24 l 4 II II Qu . 2 II 214, 5 II II Q11 . 3 II 21+ 1 II II Q11 . 4 II 24 5 l (32 Hog Price @r§l6.82[th. Net income $ 19,312 19,325 19,415 Soybeans Acre Corn " 9 10 ll Alfalfa " 10 ll 12 Oats " Wheat " 10 10 11 Credit used 24,687 24,535 23,625 Yearlings fed, Pd. 1 Head 9 II II Pd . 2 II 9 Dairy Cow' 1 1 Sows farrowed, Qu. 1 Sow 36 36 34 II II Qu . 2 II 36 36 34 II II Qu . 3 II 36 36 314, II II Qu . 1+ II 36 36 31+ 123 Table 25 shows the effects of varying the prices of hogs and beef cattle with land and other major durable resources variable on the organiza- tions of the Medium Cash Grain farm. The main differences between the solu- tions under Phase 1 and Phase 2 are (l) a lower level of dairy activity at MLL prices, (2) decreases in the crop activity levels, and (3) slight increases in the beef and hog activities in Phase 2. The most significant decrease in crops is the decline in soybean acreages. For example, under MMH, NHL, MHM and MHH prices there were 41 acres of soybeans in Phase 1 but no acres in Phase 2. Table 26 shows the shows the quantities of resources bought or sold and MVP's for selected resources for the Medium Cash Grain farm. This table indicates that the farm operator's work off the farm from 645 to 1292 hours, while the family members work 347 hours per year off the farm. One hundred acres of cropland are sold under most price combinations and most of the grain harvesting and corn picking equipment are sold. The MVP's are lower for the resources than is the case for the Phase 2 solutions. Capital has an MVP ranging from 6 cents to 26 cents. The optimal organizations for the Small and Large Cash Grain farms are very similar to those for the Medium Cash Grain farm except the levels of the activities vary directly with the size of farm. For example, at the MMM prices the level of the beef cattle enterprise is 188, 224 and 386 for Small, Medimm and Large Cash Grain farms, respectively. The Medium and Large Cash Grain farms never sell land at the high corn price. All Cash Grain farms have some family members with off-farm employment, which is con- sistent with what cash grain farmers were doing in the South Central area in 1960. Dai Farms The Dairy representative farms were not as quick to sell land as were 124 .ca mcfipnou mopmofivcd swam on mafia: poo fined mcflacon mopmoavca.huuno one no pconm :H swam mamas «\m .omwnonsm momeHdcfi swam on use onm mopsoaoca zupqo one Ho pecan CH swam mdcfla «\m .psonwdongp oocdwpoh ma madnovno mane .moanm moon op undo» map one .ooaum mo: op uncoom esp .oofinm choc can no Hoboa any 0» whammy commodom any a“ hopped pmnam one .sz>dpoommou .mooand 30H use sowoos .awan op momma A use 2 .m unoppoa ammo Momma ona\m E: 5% _au§ .qu m2: mm. .hn\w honed Hmduowmmdz = used umpcom mm.o HH.N m3.ma me.ma no.0 mo.“ wN.mH mN.oH m:.wa onom\a I unwamono . 3:. mm. mm. :m. mm. = . honed om .>oz.I ma .aoo .nn\« nopmH pmomdd go. no. mm. mm. NH. NH. am. am. mm. a Hmpaowo "moand>wpoooou osaeb as he: :3 3n :3 8m 3% magma mom om mm mm on 30m mcfizonnsm mom a d. N- d. H- d. a- a- d. 3% m38 go no on mm Hm __ wcaooom .nooa_3QH no on mm 8 page .5. @328 .38 no: aw: omI mmI :QI do: mmI mmI me = = . mcHxOfim shoe in. in am I mm... mm- RI mm- was RI .98 83. .833 p823 5..on e ucma umoo mm“: paom . a used oceanm nwam ham 3 3 mm mm D” ._ \mocma eopcom ooaI ooHI HHI ooHI ooaI ooaI ono< mesa .nm .mo honed Hmdhommndx Sm- Sm- Sm- Sm- Sm- S? Sm- ST ST .. .893 3E...” woman who: 8N... amen was 0R... mi... .80: new: poem .8an 30.988 we a: mm 5 mm Ho .mnm comm gonna Hemomsom \muvaom uo.oohda om maopH as pfiam- a O O mmmmmmmmmmmmmmlmmwnm N mam I a: $8.28 58m 3 55 zone was same: .20 monologue macaw 8m @5888 was 38%: a: mzofiéegmo 35% SEE 8 game manage a: EEEEIH Ema 125 the Livestock and Cash Grain representative farms when product prices varied because of the higher value on pasture. At the high corn price none of the Dairy representative farms disposed of owned land. However, only at LLL, MLL and HLL prices do the Dairy farms remain dairy farms. In Phase 1, the ' dairy enterprise was always in the optimal organizations for the Dairy farms, but in Phase 2 the dairy enterprise tends to be left out of the optimal organization any time when either one or both of the livestock prices are high. The optimal organizations for the Medium Dairy farm are presented in Table 27. The solutions for the Medium Dairy farm differ from those in Phase 1 in several ways. The level of the dairy enterprise is reduced and the levels of the hog and beef activities are increased in Phase 2. Also, there is a reduction in the crop acreages since the size of the farm has been reduced by selling land and/or failing to rent land in. Less borrowed capital is acquired in Phase 2, for example, at MMM prices the Medium Dairy farms obtain $23,117 in Phase 1 and $18,995 in Phase 2. The reason for this decline in « the use of credit is the use of capital acquired by land sales and liquida- tion of the dairy herd. Table 28 reveals the quantities of resources bought and sold in order to reach the optimal organizations for various price combinations for the Medium Dairy farm in Phase 2. This table also indicates the MVP's of specific resources. Less seasonal labor is acquired and the MVP's of the resources are lower than in Phase 1 for the same farm. The family had off- farm jobs up to the limits of the restrictions, and usually the operator took off-farm employment up to the off-farm labor restriction limit. The operators were permitted to work off the farm approximately 700 hours annually, while the family members were permitted approximately 300 hours of off-farm employment. Again, as is the case for all the representative TABLE 27.--OPTIMAL ORGANIZATIONS FOR.MEDIUM DAIRY FARM IN SOUTH CENTRAL AREA - PHASE 2 g.— Corn Price @’$.97/Bushe1 ; Unit ; 1 Hggf:Pr:8ezierggg:56 ‘1) Hog Price @’§ll.14[th. Net income $ 12 I 047 11+ I 929 19 I 386 Soybeans Acre 37 6 Corn " 39 23 16 Alfalfa " 20 27 22 Oats " Wheat " 17 12 9 Credit used $ 2,100 19,063 11,951 Yearlings fed, Pd. 1 Head 18 116 143 " " Pd. 2 " 18 116 143 Dairy Cow 15 10 2 Sows farrowed, Qu. l Sow 2 II II Qu ° 2 II II II Qu e 3 II II II Qu . LI " l (2) Hog Price ow. Net income $ 13,444 15,032 19,416 Soybeans Acre 25 6 Corn " 32 23 16 Alfalfa " 22 27 22 Oats " Wheat " 15 12 9 Credit used $ 16,174 18,995 11,939 Yearlings fed, Pd. 1 Head 113 141 ' " " Pd. 2 " 113 141 Dairy Cow 10 10 2 Sows farrowed, Qu. l Sow 21 l 3 " " Qu. 2 " 21 2 II II Qu . 3 II 21 l " " Qu. 4 " 21 2 {32 Hog Price @>§L6.82[th. Net income $ 20,298 20,322 20,556 Soybeans Acre Corn " 9 9 10 Alfalfa " 13 13 14 Oats " Wheat " 7 7 Credit used $ 21,921 21,921 20,361 Yearlings fed, Pd. 1 Head 27 II II Pd . 2 II 27 Dairy Cow 8 8 1 Sows farrowed, Qu. 1 Sow 31 31 31 II II Qu . 2 II 31 31 31 II II Qu . 3 II 31 31 31 II II On a 1‘, II 31 31 31 .zfi wnduzon mopNOHocH swam o: oHfigz poo coma mcdwqon mopdoauCH amaze on» no pecan ad swam wands «\m .omemondm moJNOHUGH swam 0: use oflsw mendedund Nuuno egg mo poohw a“ swam msmfla <\m .vfionw50hgv docfimpon ma mcfinooho wane .oofinm moon cg oudnu on» odd .oodnm mom on uneven can .ooanm shoe onv Ho HoboH any cg whammy cocoovow can a“ popeoa pmuam any .Nflobdpoommon .moOHnm 30H use asdvos .mwfin on pouch A com 2 .m whoppoa omwo nomad oga\m 127 .ue\N nonuH HNHuomaqa: = enaH cannon N:.N NN.N NN.NH NN.NH NN.N NN. NN.NH NN.NH NN.NH .uo.\N ucaHoouo NN. Ne. N:.H N:.H an. an. HN.H = non.H ON .>oz - NH .ooo .An\» henna um5m54 no. no. NN. NN. NH. NH. NN. NN. NN. N HapHmmo NHN own mom NNH NN.: mcHe..N mom NH NN NN NN 30m NqHzoNnaN mom N- NH- NH- N- N- NH- NH- NH- = msoo ANHNQ m ow HN mm mm NH New: mnHeoam .eoos 30H N am HN we NA qus .cH NsHmson Noam WMI OJI mm! an! mil ®3l fin! MW! mml = = MCHXOHQ Shoo me- nm- mm- mm- on- om- NN- NN- mN- .omo oao< .oHsom pmo>pme quno = eaNH pmoo NNH: puma = uan NQOHNN nNHe Nam NH OH OH NN HN NH = \musmH Noncom NN- NN- NN- NN- NN- whoa made .ua .90 noan Hmwnommcmz HNN- HNN- HNN- HNN- HNN- HNN- HNN- HNN- HNN- = soan NHHENN NNN- NNN- NNN- NNN- NNH- HNN- NNN- NNQ- Nmo- Nsom NonNH Nopmnooo No NNH HN HN NNH NNH N: .mpe gm: sonaH Hacomaom \muoaom no ocean om maopH Adz u as: " aux u 2m: " 22: A 2H2 a ma: “ m:: H mm: A . II \MmQOHpmcHnfioo mafinm " pass " N mmdmm I HHoDnomm HDA<> AmHmo< Os QmmHDomm mmm2HII.mN mum2\m .N dam H momwnm mom mGOmHHNQEOO omega :H oanmo moon vex mmon .2200 90% com: mam moOHam sdHooa one\m dNH m o mmH mmH NN NN NNH OO NNN :NH mOH NNN.2 ONN.H NNH ONN.H NNN.2N N2N.2N N omwnmnH owwnm" :NH 2 d HmH HmH 222 22 22222 mmm.H :NH m m 0H 0H NN NN Hm HNH NNN NNH NOH NNN.N NNN NON NNN om H a: a: :2 N N N O O H HOH ON N HOH ON N NH >2 OH NH >2 NN NHH >2 NN NN >2 NOH NNN >2 NNN NN >2 mm NN >2 NN ONN.N >2 NNN.N NNO >2 No: HNN >2 NHN ONN NHN ON NNN.HH NO0.0N NON.ON NNH.2 “N ommzm.H.mmwnmw .mm H Eamm Mono ammo omeH " 82mm mono ammo BdHooz on om on ommm .omm MGHoomm mom N N N 30m .omw m2H30HHNH mom 0 H H omom msoo xHHz on Ho 0 z .omm .oomm Noam on Hm w HNSHQ< mchdos moom 2H >2 0 = = .Hdmn pooh Hawsm 3H >2 OH = .dfidwo .nwn poop medm mm >2 >N : .dedo MGHxOHm £900 on >2 Hm = .mfldwo .nws :Hmno NNH >2 mdN .mmo oao« .mHowo omNHHHp a uozom mm >2 0H = bouncy vcmHmouo mm >2 N0 oaod mezzo ocmHmono omm.H >2 dow.N .Hg .20 noan HNHHowmqmz HON >2 NNH = NHHSNH\2203 sumo-moo 03m \m>2 on H502 .2020 an xaoz BHNMIMHO 03m 0 3N .9: cm: bonds nonNH Hmcommom Nwm.am www.mN H:>.: » memo pHoono Hmpoe "N ommnme ommnmw bmmH m pHdD m condomom Bzmm dono mmmo HHNsm dmm< mzbma I mmzmHemA mombommm N mm2 NN OH >2 OH = 22.22H2N. N2HH2.2 2..2 2.Nsm NN >2 2H OH >2 NH = 22.22H2N. maHp..>2.2 p..2 2.Nsm NHN >2 NN NN >2 NN = . 22.22H2N. N2H20H2 22.0 NN >2 NHH NN >2 NN = 22.22H2N. N2H2..>2.2 2H.2O NHN >2 HHN HNN >2 NNN .2.0 .202 22.22H2O. .N.HHH2 2 2.3.2 HNH >2 HOH OHH >2 ON = 2.22.2 22.H2.2O NNN >2 NHN ON >2 NN .202 2.2:. O:.H2.2O NNN.N >2 NNN.2 NNN.N >2 NNN.N .22 .NO 2.2.H H.H2.N.2.2 NNN >2 NNN ONN >2 NNH = >HH2.2 >2 2202.22.2-220 0 >2 0 0:: >2 mom 2502 20922620 23 £203 EHNMIHMO NNN.N NHN.2 NON.H 2N2 NNN HON .22 2.2 0.2H2 202.H H.2o...m HHO.NN NNN.ON 2HN.NH Ho2.ON NNN.ON NNN.N 2 No.2 pHO.20 H.202 N ...22 H ...22 ONNH 2 N ...22- H ...22 O NH 5222 NMHNQ omumH emwm HS 53.2-22.2 pHGD oopdommm ooszHHGOOII.mN mqmda 132 In general, there are increases in corn picking equipment required and decreases in power and tillage and grain harvesting equipment. For all Cash Crop farms. there is an increase in beet hauling capacity but a decrease in beet harvesting capacity on the Medium and Large Cash Crop farms. The - solutions indicate that the Large Dairy farm would purchase some sugar beet harvesting capacity, while the Small-Medium Dairy farm sells some beet har- vesting capacity. At medium projected prices, dairy production remains in the optimal organizations of the Dairy farms for Phase 1 (land fixed) but is left completely out of the optimal organizations for Phase 2 (land variable). The solutions under Phase 1 are consistent with the results form the Lake. States Dairy Study for Michigan.1 However, the shift in the dairy enterprise that occurs when moving from Phase 1 to Phase 2 is more consistent with cur- rent trends for dairying in the Thumb area. In reality. when the farms in the Thumb area expand in land area and family members obtain off-farm employ- ment, dairying becomes less attractive and is usually reduced or sold out. The results of this study indicate that this trend will continue as cash crop acreages, feed grain acreages, beef production, and hog production expand on farms in the Thumb area. The tremendous increases in beef and hog production and use of credit indicated by the programmed solutions depend upon many factors not considered in the model. The risks associated with beef production were not taken into account in the model. In addition, in the real world farmers may not be aware of the supplies of institutional credit available to them.2 Also, when lDean E. McKee, op. cit. Since the Lake States Dairy Study considered dairying in more detail than this NC-54 study, the results from both studies should be considered to determine the comparative advantages of crops, beef, hogs and dairy. 20. I. Trant, op. cit. He found that many farmers were not aware of available institutional credit and the conditions surrounding the acquisition of such credit. 133 all farmers are bidding for resources, input prices are likely to increase while product prices are likely to decrease, tending to limit expansion.1 The pressure to expand farm size as indicated by the results of this study for the Thumb area leads to the conclusions that (1) land values will continue to increase in the Thumb area and (2) the price of $575 per acre used in this model was too low for land for farm uses, inasmuch as farm sizes in the Thumb area tend to be stable. Thus, as prices of land are bid up cash crops, feed grains, and livestock (beef and hogs) will become more and more attractive to this area since these enterprises have greater returns for resources than dairying. South Central Area The optimal organizations for both Phase 1 and Phase 2 for the repre- sentative farms in the South Central area indicate large increases in beef cattle and hog production, as well as increases of 8 to 18 times in the use of credit over what the representative farms were using in 1960. Since this difference in credit use is so great, it seems likely that farmers did not report all credit which they were using in 1960. It is possible that may short term credit contracts were overlooked. Also, the net worth of farmers may not be accurately estimated since real estate values may have been over- estimated. In Phase 1, the solutions for the South Central farms have MVP's for cropland, except for the Small farms, that indicate contraction in farm size (land area) might be profitable. This does not agree with present trends. Thus, the price of $283 per cropland acre used in the model may be 1The NC-54 Study, "Supply Response and Adjustments for Hog and Beef Cattle Production," plans to consider the aggregate effects of the optimal farm organizations. Harald Jensen_of the Univ. of Minn. is Chairman on the NC-54 Committee. 134 too high for farm use. However, the MVPIS for wheat acreage and corn land, in most cases, appear to be high enough to allow further expansion if these specific acreages can be obtained. Another important reason for holding land was not considered in this study. This was land value appreciation due to urbanization and inflation. The results of this study do not agree with Heady and Egbert'sl find- ings for this section of Michigan. This difference may be explained, in part, by two things: (1) Different input-output coefficients were used and (2) the two studies had different objectives and price assumptions. Never- theless, with beef cattle and hog expansion taking place in the South Central area, feed grains and wheat will continue to be attractive alternatives for this area at current prices. If wheat prices should fall to $1.10 per bushel (or feed grain price for wheat with corn at medium price) with other crop prices constant at current prices, wheat would likely leave the optimal organizations of farms. In Phase 1, expansion occurs in soybean acreages and reductions occur in hay crop production. The optimal use of specific resources for the representative farms are compared in Table 30 for the South Central area at ppdipp,prices. I Table 30 indicates the adjustments in the resource base of the repre- sentative farms from one resulting organization to another. Less seasonal labor is hired in Phase 2 than was hired in 1960 except on the Large Dairy, Large Livestock, and Medium Livestock farms which have increases in seasonal labor requirements. Less managerial labor is required except on the Large Livestock farm where there is an increase from 2118 to 2671 operator hours. lEarl O. Heady and Alvin C. Egbert, op. cit. 135 .H .mmsm mH Newb op ooonHm p0: mm3_ooadomoa mHzp monocmo >2\m .N pow H Newman 20% mcoanmmSoo omega cH .prmo moon New mwon .2200 now 20.5 .22 mooHam BdHoos .29\m NNN NNN NNN NNN NNN NHN NNN NNN ONN ...2 ...2 ....2 N02 HH HH HH NH NH NH NN NH . NH 3.. .0.H wcHSonnmm mom 0 o m o N N o N o v.62 .300 NHH: ONH NNH NN HN NN ON ON ON ON . ...2 ....2 2..m 0NH NNH NN Hm mm on ON ON ON HNEH£< mQHmdon moom NOH >2 NNH NN >2 NN HN >2 NN = 22.22H2N. monon caoo NN >2 NHH OH >2 NN N >2 NN = 22.22H2N. .amn GHmao ONH >2 NHN 2: >2 NHN NN >2 NNH .2.o .202 22.22H2N. .meHHp N 2.302 O >2 HNH NH >2 NN O >2 N = 2.22.2 .2.Hoo2o m:H >2 de 3m >2 mm mm >2 mm 0202 p.230 ocmHmoao HNN.N >2 NHH.N NHN.H >2 NNH.N HmH.H >2 mNo.N .22 .20 HOQNH Hprmmmcmz NNN >2 OOH NNN >2 ONN 2O. >2 NNN = >HH2.H \xaoz BHNHINHO Non >2 mom mm: >2 mm: NNN \m>2 omw 2:02 .2.20 ND 2203 anmmImmo com :NN.m NN: NHN Nm: om MH 0 NNH .22 cm: ooHHm HobNH Hmmomwom mNH.Nm mHN.Nm mom.> mom.NH wme.:N mNm.N Ho:.:H NNN.mH omo.H a vow: pHooao proa IIM ...22 2 H ...22 2 ON H 82mm xOOpmo>HH omamq N owmnm 2 H owmnm " cm H gawk xoopmo>HH ammooz N ...22 2 H ...22 . Ow H M HHcO 8222 xoopmo>HH HHNSm oohdomom 9 O O O to 09 0. e. 2222 Hamezmo NNOON - .mzmaa 2>H> -<>22222222 202 NH2>2H mo2OON22 N mmamm 202 HazHNNO 222 222 .H 22222 NON H22H>No 2 .ONNH mme-.ON mHmaa 136 O2 NO O2 NN OOH NN NH ON NH ...2 .022 msHO..N mom 2 2 2 2 2 2 N N N 00. .00. ..H300... .02 H H N H N N O H H O..O .300 2HH2 ONH NHH 2H NN NO O HO o2 O 2 .0.N .0..N N..m ONH wHH :H mm mm O HO 0: m HdaHQ< mnHmdon moom H: >2 wMH Hm >2 mm MH >2 on = .mfidwm mconwm choc NH >2 NHH ON >2 NOH NH >2 OO 2 .mst. ...: 2H.NO NN >2 N2N ON >2 OHN NN >2 o2H ...0 .002 .mst. ...HHH2 2 0.20. O >2 OOH O >2 ON NN >2 O 2 O.pc.n 2:.H2000 ON >2 NOH NO >2 OOH O >2 mm .002 0.230 0:.H2090 ONN.N >2 N2H.N ONN.H >2 OOO.N NOOnH >2 OON.N .02 .20 000.H H.H0.m.c.z HNO >2 o2m N2N >2 NON OO2 >2 ONN = >HHs.N\200: 2002-220 2OO >2 NHN NNN >2 NOH.H OO2.H >2 ONN.H 0002 02.20 2. 2.03 20.2-220 NHN OOO.H ONO N NNH 2OH O O N2 .02 2.2 0.9H2 Non.H H.¢0...m NNN.NN ONH.22 HON.2 2HH.ON HNN.ON ONO.N Om2.HH OON.OH OOO O 0... 2H0... H.202 N ommnmuH ommsm" o H “N mmmgmuH .mmnm” om H "N ommgmnH 0mmsm“ o mH u pHnD Eh. :HNuu 2mmo . NOH ”Sham cHwnw 20.0 ESHvosuahmm :kuw 2mmo HHwam " oondowom 0.02H2200--.ON OHm<> 137 O O HH NN OOH ONH NHH OoH 2N >2 N >2 O2 >2 O >2 HO >2 200.N >2 ONO >2 OHN >2 ONO ONO.N o2N.NN OO2.02 N ommnmnH 0.222" om H Emma >NHNQ mmnmq O2 O2 O2 2 2 2 OH OH OH HO OO O H. OO O ON >2 NO NH >2 NO HO >2 OHN O >2 NN NO >2 2. NOO.H >2 NOO.N HON >2 NOH NOO >2 2HN $H 3O H8 OO0.0H NHH.NN HNO.N 2N OH ON OH NO OOO.H O 2NO Ow OON.ON 2N0.0N £222 on Udmm : 30m NH v.02 O = o HNSHQ< N w = mm = H2H .mmo 0A0< HN 2 mm oho¢ NON.N .02 .20 o .. dN: .HHHom 20H ..2 0.2 OOO.N O .omm wndvmmm mom .owm mnHSONNNH won .300 xHH: .omh .Ooom Hmom madmson Mocm .mfiswo monowm choc .mHfiwo .hdn :Hdnw .msto omeHHp w 2.30m vopzon undeono 20:30 quHmono Noan Hthommcmx >HH2.N\200: 2222.220 .meo >5 2503 Hummummo vmhwa NonNH Hanommom O... 2H0.00 H.202 ”N owmnmuH wmmgm" ommH 82.2 >NHNQ Edeo: “NkmwmmmuH ...sm" ommH " 2 Spam thmn HHNam . 2H22 M mogowmm Umdsszooul.om mAm, ..T . L C . ." *These prices were adjusted by seasonal weights, geographic differences and for marketing charges to arrive at the prices used in the linear programm- ing model. 157 .mpoon semen one mcfioom use mcfieefigp mom Honda nmoamwe woman oudaoew no: moov maga\m .mnooh om we use whooh OH ammo: one son omoao>o one mos Homes wsfiesouwoad aeosfla one :2 opmowowmwooo honed one new eoedmmo :oevfimcoo nonvoos one .>H aopmono dd momfiadaopco mono one How meooabmp one ca 25000 20223 mpmofioammooo Hosea one o>fiaov on ..MMmldmm .oaom whoeoflm who AoHaoppOm .m .2 29 moaodoad meme mpflz.eoepoosmoo me come oaos mesoSoafldwoa Honda omona .meOpOesoo nonpeoz Hesse: no omoao>o mo meaop 2H vopopm one mucosoafidwoa Honda ooo29\m .mbaofih bee memosoafiseon peace How moose even now osom one on on meadows mos ofiga\m 582 stO sebOH snow stN seem stO snow seeOH stOH pseOH sepOH neHoH> OH.O O0.0 H0.0 O>.O 20.2 OO.> o2.N o2.O O0.0H O0.0 O0.0 \mO>.NH . \msebsH OO.H ON.N OH.O OO.N OH.N O Os. OO.H OH.O OO.N OO.H O0.0 s :eHapm Om. O>. OO.O >0.0 HO.N OO.2 ON.H OH.H OO.N O2.N OO.N OH.N mnsem zeHuaN mHDon 980mg OO OO OO OO OO ON OO ON om OO ON OO .bH enseea OO OO OO OO OO OO OO o2 OO OO o2 ONH .bH esesenesa OO OO OO OO ON O OO ON OO OO oH OO .OH semeseHz hoNHHHpaom OOH Na HH HH ON O OOH Na NH NH Om O.H .bH seem )0 . owoafimncaoawnmcoonn mmmem omeHOmNCOoswnmceom ”mpoom” mpoo " pom poogx pmogzn u now " n2omn Beam 2 n memo “ mom A mom " 2mm lawman" « mesmeH n 2200 a 2200“ "emammaLABOR REQUIREMENTS FOR HOG ACTIVITIES* : Hours of Labor Requiredgby Period Type of System : Dec. 2 April 3 June : : Sept. : Oct. 15-: T tal : Mar. 2 May :4July ;#Aug‘ : Oct.415,: Nov. 30 : o - «‘03:, 5 Central farrow & confinement W---” w- "Lynn. . s. . ~. ._ t I I finish: Quarter 1 5.30 3.25 3.00 1.00 .34 .44 13.30 Quarter 2 1.10 3.23 3.50 1.50 2.25 1.75 13.34 Quarter 3 4.23 .54 .99 2.56 2.64 2.37 13.34 Quarter 4 6.50 2.50 .46 .32 .65 2.90 13.34 Central farrow & portable finish: Quarter 1 6.35 3.25 3.00 1.00 .34 .44 14.38 Quarter 2 2.00 3.68 3.50 1.50 2.25 1.75 14.68 Quarter 3 4.23 .84 .99 2.56 2.64 2.37 13.63 Quarter 4 6.50 2.50 .46 .32 .65 2.90 13.34 Portable farrow and finish: Quarter 1 6.69 3.25 3.00 1.00 .34 .44 14.72 Quarter 2 2.00 3.83 3.69 1.50 2.25 1.75 15.02 Quarter 3 4.23 .84 .99 2.82 2.72 2.37 13.97 Quarter 4 6.60 2.50 .46 .32 .65 3.14 13.67 *For convenience, it was assumed that sows farrowed and feeders were purchased at the mid-point of the quarter. 159 TABLE A»8.«-FEED REQUIREMENTS FOR SOW AND EIGHT PIGSé/ Corn . Pasture System Equivalents : Protein : Animal Unit th. th. : Pastpyp_25y§___ Central farrow and confinement finish: All farrowings 59.25 11.96 0 Central farrow and portable finish: Quarter 1 59.36 11.86 20 Quarter 2 59.32 11.86 19 Quarter 3 62.78 12.30 13 Quarter 4 60.73 11.68 15 Portable farrow and finish: Quarter 1 59.36 11.86 20 Quarter 2 59.32 11.86 25 Quarter 3 62.78 12.30 19 Quarter 4 60.73 11.68 15 a/ These feed requirements are for feeding out seven 210 pound hogs, 1 gilt until farrowing, and l sow until 3 months after farrowing. The sources of these data were: D. A. Becker, "Balancing Swine Rations," Univ. of 111., Circular No. 811; "Your 1962 Hog Business," AS-377, Univ. of 111., Ext. Ser.; and Karl wright and J. A. Hoefer of Michigan State University. —_<.~F-‘n~q 4...... Beef Enterprise 160 The beef activities include a beef cowwcalf herd, two calf feeding systems, and two 6 months short-fed yearling systems. October and period 2 begins in April. Period 1 begins in TABLE A-9.~~HOURS OF LABOR REQUIRED FOR DIFFERENT BEEF CATTLE SYSTEMS :Beef-Cow : Labor Period : Calf ° Herd Total labor 20.00 Dec.mMar. 10,4h Apr.~May 3.86 June-July 1.04 August .62 Sept.-Oct. 15 1.32 Oct. 15-Nov. 30 2.72 :Dr lotsPas. 9.58 2.32 2.62 1.96 .90 .89 .89 Low Mechanizationé/ : 7.73 5.28 5.28 2.94 3.52 0 1.29 .22 1.54 1.03 O 1.76 .51 0 .90 .93 0 1.08 1.03 1.54 0 High MechanizatioE :Calf Systems: Yearlings :Calf Systems: Yearlings :Pd. 1:Pd. 2zDr lot:Pas. 6.42 1055 1°75 1.32 .60 .60 .60 5.18 1.97 .87 .69 .34 .62 .69 :Pd. 1:Pd. 2 3.54 3.54 2.36 0 .15 1.03 0 1.18 0 .60 0 .73 1.03 o E/These are based on lot sizes of 100 head. TABLE A~10.--TOTAL FEED REQUIREMENTS PER HEAD BY BEEF CATTLE SYSTEM Feed Requirements Cogggglf : 82:13: P::t::: Yearlings Corn equivalents (cwt.) 2.69 35.00 30.35 21.50 Protein (cwt.) .98 3.72 1.24 1.57 Hay equivalents (tons) 2.00 .94 .74 .21 Pasture (tons H.E.) 3.00 0 1.00 O e‘ .....ln-tk-Hi‘ p'-I 02:» 161 y DairyiEnterprises The dairy activities included in the model were of the stanchion and parlor types. The stanchion system included both grade A and grade B alternatives where appropriate. The labor requirements by system are pre- sented in Table A~ll. Fm TABLE A-11.--..HOURS OF LABOR REQUIRED PER DAIRY COW BY SYSTEMg-l a . Milking System I Labor Period : Stanchion : Parlor L Grade A : Grade B : Grade A l Dec. - Mar. 31.95 28.44 23.14 5" April - May 13.43 9.00 10.68 June 1 July 10.29 6.38 9.24 August 5.23 3.29 4.70_ Sept. ~ Oct. 15 7.69 5.23 6.92 Oct. 15 4 Nov. 30 10.68 9.08 8.13 é/These requirements are based on a herd size of 20 to 30 cows. Source. H. J. Aune and L. M. DayD "Effects of Herd Size on Dairy Chore Labor." Bulletin 4499 Minnesota Agricultural Experiment Station, St. Paulc Minn.. and E. I. Fuller and H. R. Jensen, "Alternative Dairy Chore Systems in Loose Housing." Bulletin 457, Minn. Agri- cultural Experiment Station. St. Paul, Minn. The grade A cow and replacements (.9 young stock per cow) had feed requirements of 37.98 cwt. corn equivalentsD 574 lbs. protein, and 7.85 tons hay equivalents. The grade B cow and replacements (.7 young stock per cow) consume 35.4 cwt. of corn equivalents. 200 lbs. of protein, and 6.72 tons of hay equivalents. It was assumed the grade A cow produces 11,500 lbs. milk (3.5% FCM basis) and the grade B cow produces 10,036 lbs. of milk (3.5% FCM basis) per lactation. APPENDIX B Appendix B includes tables depicting Phase 1 optimal organizations for the small and large size representative farms for the Thumb and South Central areas. The prices used were the medium price for corn and various prices for hogs and beef cattle. 162 163 TABLE B‘1.m-OPTIMAL ORGANIZATIONS FOR SMALL CASH CROP FARMS IN THUMB AREA - PHASE 1 Beef Prices per th. C°m Price @ $°9WBuShel gun“ : $16.08 :_$20.20 $24.31 (1) Hog Price @ $10.89[th. Net income $ 7.806 10.609 14,005 Dry beans Acre 24 20 20 Corn " 30 3h 34 Alfalfa " 3 3 3 Oats " Sugar beets " 7 7 7 ‘Wheat " 17 17 17 Real estate credit $ 22.345 15.982 15,785 Chattel and private credit $ 9,706 11.680 11.680 Yearlings fed. Pd. 1 Head 9 99 101 " " Pd. 2 _ " 9 99 101 Dairy Cow 26 1 Sows farrowed, Qu. 1 Sow 2 u n Qu. 2 n H II Q11.» 3 II n I! Qu. )4, n (2) Hog Price @ $13.731cm. Net income $ 9.317 10,753 14,060 Dry beans Acre 20 20 20 Corn " 34 34 34 Alfalfa " 6 3 3 Oats " Sugar beets " 7 7 7 Wheat " 13 17 17 Real estate credit $ 24.935 16.297 15,758 Chattel and private credit $ 10.138 11,680 11,680 Yearlings fed, Pd. 1 Head 93 99 n u Pd. 2 u 93 99 Dairy Cow 1 1 Sows farrowed. Qu. 1 Sow 26 2 2 " " Qu. 2 " 26 2 l n u Qu. 3 n 26 2 " " Qu. 4 " 26 2 (32 Hog Price M16.57/cm. Net income $ 14.948 14.948 15,264 Dry beans Acre 20 20 20 Corn " 34 34 34 Alfalfa " ll 11 3 Oats 11 Sugar beets " 7 7 7 Wheat " 9 9 17 Real estate credit $ 21.745 21.745 25.335 Chattel and private credit $ 11,680 11.680 11.680 ‘Yearlings fed. Pd. 1 Head ' 26 n n Pd. 2 n 26 Dairy Cow Sows farrowed. Qu. 1 Sow 27 27 21 u u Qu. 2 n 27 27 21 II II Qu. 3 " 27 27 21 " " Qu. 1» " 27 27 21 “'4 . ‘3'501" .4 .atrr.aallr a- T145! l . E11... I; .uconmuonnp uocfiepon ma mcdnouno many .ooanm moon op Unanv one use .oo«um won on vacuum can .coaum choc on» ma Hoboa on» on whammy cocoswom one ca nonpoH papa“ one .hHobduoommon .moodnm 30H use andvoa .nman on pouch A one x .m mnoppoa omco momma ona\m mo.Hm m3.mo m:.Nw Nu.mm 164 ma.mm ma.mm mm.ao m~.Hm ma.mo = cannon aqua so.me mm.mm mm.mm mm.so mm.mm mm.om mm.mm mm.mm so.mo ouoa\» unmamoao = on .>oz . ma .poo om. = ma .poo . .pamm = pmdms¢ .. him. I 05H. on. = has I .am< opH£\$ 0909 . 0H.“: @030.“ gag” u H093 mo. ma. 0:. 0:. ma. ma. an. an. mm. a Haeaamo aa.nm am.ma am.ma mo.m mo.m Hm.a = eased .mmmuom Smog: ma.aa am.aa Hm.mo am.mm as.oa 53.05 mo.oo mm.oo on.:o = poaupcoo pomp ammsm om.a sm.am sm.am mn.oa Nn.oa HA.NN HN.NN aa.mm = Snead ommopoa spoo ouom\w paEHH mmmouom :mom .mmmmmwmmesvonmvosam> qumwnmz .nn cm: Momma accommom son was was ea mmm 8.0m msaeoom mom am mm mm ma 30m mangoes.“ mom mm = mzoo mufiwa mm mm mm mm Ha 8.0m mqaeooo .noma sou mm mm mm mm Ha means .4 mcameoe comm OMH = “5&0de mcoo OHHW oma N mm on an mm HS .809 comaeonea mam son oaa.m oma.m oma.m maa.s nmm.s 0mm.a mma.s moo.m .sm eomaeossm choc NMmGOfiuccfinaoo oedum mmmnasmoe macpH H mmHBoDnomm MDA<> A<2HomMHmo< OB nmmHDomm mmm2Hlu.Nsm mnm4a TABLE B-3.~.OPTIMAL ORGANIZATIONS FOR LARGE CASH CROP FARM IN THE THUMB AREA - PHASE 1 165 Corn Price @'$.99/Bushel f Unit f (1) Hog Price @ $10.89/th. Net income Dry beans Corn Alfalfa Oats Sugar beets Wheat Real estate credit Chattel and private credit Yearlings fed. Pd. 1 " Pd. 2 Dairy Sows farrowed. Qu. 1 II II Qu. 2 II II Quo 3 n n Qu. 4 (2) Hog Price @ $13.73/th. Net income Dry beans Corn Alfalfa Oats Sugar beets Wheat Real estate credit Chattel and private credit Yearlings fed. Pd. 1 " Pd. 2 Dairy Sows farrowed. Qu. 1 II II Qu O 2 II II Qu o 3 u n Qu. 4 (2) Hog Price @I$l6.57/th. Net income Dry beans Corn Alfalfa Oats Sugar beets Wheat Real estate credit Chattel and private credit Yearlings fed. Pd. 1 " Pd. 2 Dairy Sows farrowed. Qu. l n n Qu. 2 II II Qu o 3 n n Qu. 4 20.777 129 46 24 20 20.421 5.300 36 20 29 22.438 129 24 20 40 30.089 25.860 12 52 52 52 52 34.478 46 129 27 20 37 28.770 26,103 57 57 57 57 Beef Prices oer th. 21.627 32.617 242 242 56 21.627 32.617 242 242 34.209 46 129 20 40 21,560 32, 617 238 238 35.748 1 7"“TA ‘—13 '34 '.I".~fl"a7 1' 5. .psonwsonnp uoqawvon ma mnaaovuo mane .ooaug moon on duds» any new .ooflnm won on uncoom onp .ooaum choc onu mo Heboa on» on muowou oozodvom can ca nopuoa 166 pagan ona .hHo>HpoommoA .mOOHuQ 30H one addvoa .nmfin op homey A one z..m whoppoa ommo nomad ona\m sn.am oa.~m oa.ns oa.ms mm.mm mm.mm s:.mm ss.mm Hm.mm g eopnou eqmq mm.HN wo.o~ mm.oo mm.ow NN.:N NN.:N mm.mm mm.m~ mw.mm opoa\w ucaamono sa.~ AH.N ao.m mo.~ om.m om.m om.~ mn.~ No.m = on .>oz . ma .poo 3H.N aa.~ aw.m ao.~ om.m om.m om.m mn.~ Nw.m = ma .ooo - meom Na. AH.~ = pmsmsa sa.~ AH.N ao.m ao.m om.m om.m mm.m mm.~ No.~ = sage . maze 3H.N AH.N ao.m mo.m om.m om.m mm.~ mm.~ Nw.~ = he: . .saa oHfl\$ .08 . ohm: ..QQrm ..th. "hoflwq mo. mo. mm. mm. 3H. 3H. mm. mm. on. » Hepaamo mm.an Ha.ms mm.o: mm.o: mm.mm mm.mm mH.Hm = paged ommouom smog: mm.ma om.oo ms.ms ms.ms mo.sm mo.sm Ho.ms Ho.ms mm.o¢ g pomupcoo poop newsm ms.s om.mm on.m~ sm.m sm.w sw.ma sm.ma Ho.m~ = eased mmmmuoa :uoo Qu.:a onom\a pHEHH mmmouom :mom "mmwvfibfiuosvoua osHm> Hmcfiwnmz 0mm mam.a mms.a Hom.a mmm.H mam.a mam.a mam.a msm.a .un sax uopma Hacomwom new mam cam Non eaom wcaeoom mom a: an on H mm ‘zom mcazopnae mom ma N : mSoo huwma ea add pea 53H med no coo: mcfidoom vouacwnooa.39H ea asa Asa Asa mad we muacsx<. mcamson “mom mm : fiovodhfimzoo 0H.—mm aoa an ad ma oaa mad mad naa Ho mace eommnonea sum smn.HH www.ma ans.ma cam.m mam.s mam.s nsm.n NmN.HH .em eommnouea shoe "vohfiddom mampH é til” .32“ 32 " dE " EE " EE " 2E " wan“ Ea " SE ”was" \Mmcoapm:HQEOO ooahm « u - H mmHHODQOmm HDA<> A<2HummHmo< 09 QHMHbomm mmm¢mombm Qz< mezmzpmm>2Hll.dlm mqmde 167 TABLE B-5.--OPTIMAL ORGANIZATIONS FOR LARGE DAIRY FARM.IN THE THUMB AREA - PHASE 1 Corn Price @’$.99/Bushel {12 Hog Price @’§10.82[th. Net income Dry beans Corn Alfalfa Oats Sugar beets Wheat Real estate credit Chattel and private credit Yearlings fed, Pd. 1 ” Pd. 2 Dairy Sows farrowed, Qu.1 " Qu. 2 II II on 3 u n Q11 . 1+ ‘22 Hog Price @>§l}.23[0wt. Net income Dry beans Corn Alfalfa Oats Sugar beets Wheat Real estate credit Chattel and private credit Yearlings fed, Pd. 1 " Pd. 2 Dairy Sows farrowed. Qu. l “ Qu. 2 n n Qu 3 n u Qu. )4, (:2) H03 Price @ $16.5ZZth. Net income Dry beans Corn Alfalfa Oats Sugar beets Wheat Real estate credit Chattel and rivate credit Yearlings f , Pd. 1 " " Pd. 2 Dairy Sows farrowed, Qu. l " Qu. 2 II II Qu II II Q1102 Acre Head II Cow Sow Acre 34,868 81 161 26 19 16 40 13,36# 3.800 29 29 29 29 52. 356 172 54.616 172 42 16 no 1.840 .607 155 2 70 7O . Sausages... 8:292 2 323.8 3.5 .Sea .33 av enanv can use .ooanm men on uneven one .ooanm shoe as» No amped 034 on enemas ooqeevee may ca hopped vegan may .hHo>apoommon .mooanm_zoa use seduce .gman on genes A use a .m escaped omeo nomad oga\m 168 oa.m~ mn.om we.mm aa.an «m.~n mn.~m mm.sm em.sn sm.nm . usages eneq No.ma oa.se me.mm om.mm me.s~ me.s~ ou.e~ oa.mm mo.m~ ouoe\a uzeaeono ea.~ mm. mo.H an. mm.H m~.H me.a . on .soz-- ma .poo sa.~ em. no.” em. m~.H ne.a ne.a = ma .poo . .saam sa.~ mm. no.a an. m~.H n~.H ms.a = pmgmsa sa.~ mm. mo.a an. mm.a m~.a ms.a = age» . case sH.N em. mo.H an. mm.a mm.a ms.a g aw: - .uaa .3; 68 :8: ta..." :53. "honeA mo. mo. am. we. 0H., ca. me. me. we. a Hepaaeo ea.~m e~.aa no.m an.“ ma.ns ma.ne mo.nm mo.mm am.sm = panda emaouoe neon: um a woenpcoo noon nemem ne.ma H6.Hm mmnmm ow.~m mm.mm mm.om NN.am ~m.am am. .e we in 8.0 86 $8 Rem Ram .. fie: $8.82. 58 NN.NH ouoe\a pdaHH omeohoe seem «mefipwb envoy cede» He: he: osa.m uoe.m mmo.n mmo.m mam.s mao.s nmm.m mom.n nae.m .ue ca: gonna Hanomeom ems mam.a nan.a mHH.H edge weaves“ mom mm mm mm mm new meazonuem mom .. e300 5Q me 8e HNN awe :3 3 Ram ego.“ Eggnog :3 Nb ONN HNN NHN 0.8 +3 3.3.54 madmaon moon = eopoenpmeoo oaam mo co m N «ma mma mm us much womenouem hem ems.a~ ems.am eem.ma mem.~a mme.:~ oma.sa Haa.em .em comeaouae auoo .1 “dmuflemoe maepH 82 u as u ea 52 n as 1 RE: \emmmwmmmmmmmmlmmage . “ augug H mmHHUDQomm . mags, dag: 92¢ mzoufigcmo go mafia”; 09 Edam agogm 92¢ mazgéHl... mum an. 169 TABLE B—7.--OPTIHAL ORGANIZATIONS FOR SMALL LIVESTOCK FARM IN THE SOUTH - CENTRAL AREA- PHASE 1 Beef r ces or Out. Corn Price e $.97/Busho1 ; Unit 4 .33 z 20. g . l e O» 1+ . Net income $ 5 o 098 7 v 290 10 0 2""? Soybeans Acre 9 8 Corn “ 28 28 28 Alfalfa ' 11 17 17 Wheat ” 8 5 8 Real estate credit $ 14.h17 12.047 10.54” Chattel credit $ 2.821 5.017 5.017 Private credit 3 2.600 2.600 2.600 Yearlings fed. Pd. 1 Read 31 75 90 " Pd. 2 " 31 75 90 Dairy Cow' 16 6 Sous farrowed. Qu. 1 Sow’ 9 Qu- 2 " II I Qu 3 II II n Q11 . 1+ :1 3 2 H Pr ce‘o Net income $ 7 o 670 8 0 301+ 10 v 553 Soybeans Acre 6 9 10 Corn " 28 28 28 Alfalfa ' 19 17 15 Wheat “ 8 8 8 Real estate credit $ 13.02“ 11.639 10.378 Chattel credit $ 5.017 5.017 5,017 Private credit t 2.600 2.600 2.600 Yearlings fed. Pd. 1 Head 31 80 " Pd. 2 " 31 80 Dairy Cow 8 6 Sous farrowed.Qu.1Sow 20 12 9 Qu. 2 ' 20 17 3 u u Q11 3 n 20 12 n n Q11 . LI " 20 17 3 ‘ WM- Net income $ 12.885 12.885 13.078 Soybeans Acre u h 4 Corn " 28 28 28 Alfalfa " 21 21 21 Wheat " 8 8 8 Real estate credit 3 15. 965 15.965 11.071 Chattel credit $ 5. 017 5.017 5.017 Private credit $ 2.600 2.600 2.600 Iearlings fed. Pd. 1 Head 31 " Pd. 2 ' 31 Dairy Cow Sous farrowed. Qu. 1 Saw 26 26 19 ' Qu. 2 " 26 26 19 ” " Qu. 3 " 26 26 19 " " Qu. 4 " 26 26 19 170 .pcocwdonnv vendepon ma mcfiuovno wage .ooaud moon on wean» can use .ooand won on vacuum on» .oodnm choc 069 no Hoboa egg cg «homey oocmsdom can ca hopped panda one .hHo>duoommon .moo«nm 30H ccw.a:Hvoa .nmdn on couch A use :H.m wnovpoa omdo momma ona\m [14' sm.m~ mn.om om.om om.om m¢.:m ma.ma mm.m~ mm.m~ mm.on = amazon “seq mm.mn aw.~m mm.am mm.am Hm.om Hw.om NN.Hm NN.Hm mm.am ouou\e uqaaqouo = on .>02 3 ma .900 = ma .poo . .pmwm = umsmnd os.a am. m:. as. mH.H oa.~ an. an. as. = aqua - onus MN. 3 h“: I. ooflg< e£\» .08. 00"“: .090.“ .05” "panda mew ma. mm. mm. om. . ma. an. an. mm. a Handgun 3:.mm mo.NH mm.m mm.m mw.oa mm.HH an.m Hm.m mm.m = pfiada owoouod neon: a~.m~ mm.mn 3:.mm ss.mm mo.a¢ ~n.os aa.am ma.am ss.mm = paged masons“ choc ouow\w pdada omaouod seem mm .mun as: henna Hdcomwom. and mmm mmm NOH maa seam maduoom mom n HH Ha N a sum measonnau mom ma m o w a when huddq mm mm mm uaom mzeuoom uoufiaunoos.sog am mm mm 334 madman moom 3m aa a topochumcoo OHHm an . macs vomanondm hum 3&2.N wmm.m Hmm.m Hmm.m mma.m mmo.: o:w.: mmm.m mm¢.m .sm vomwnoncm choc "coma: oa.maovH «MEGOdpqcans o ooflmmi H mama .. an: .255 58m 5 53 68% .35 ac $383 6988.0. 8a $395898 HS; 35%: a: mzofifiHfiumo $5.8 EH51 2. 9550mm manage a: BEEHEéA 39a 171 TABLE B-9.--OPTIMAL ORGANIZATIONS FOR LARGE LIVESTOCK FARM IN THE SOUTH CENTRAL AREA - PHASE 1 A : : Beef Prices er th. Corn Price @»$.97/Bushel : Unit : 1 .33 = 20. 5* : 2 ,5 (12 Hog Price @b$ll.;4/th. 26,340 Net income $ 10.518 17:185 Soybeans Acre 52 52 52 Corn " 153 153 153 Alfalfa " 57 37 37 Wheat " 44 44 44 Real estate credit $ 25.762 22.904 22.918 Chattel credit ,$ 26.001 26.001 Private credit $ 6.600 6.600 6.600 Yearlings fed. Pd. 1 Head 102 266 267 " " Pd. 2 " 102 266 26? Dairy Cow 22 Sows farrowed. Qu. 1 Sow 11 II n Qu. 2 I! II I. Qu. 3 II n n Qu. 4 n 3 {Zlfiog Price @'$13.98/th. Net income $ 13.616 17.758 26.422 Soybeans Acre 52 52 52 Corn " 153 153 153 Alfalfa " 57 57 37 Wheat " 44 44 44 Real estate credit $ 28.139 22.614 22.752 Chattel credit $ 7.695 26.001 26.001 Private credit $ 6.600 6.600 6.600 Yearlings fed. Pd. 1 Head 250 258 " " Pd. 2 " 250 258 Dairy Cow Sows farrowed. Qu. 1 Sow 51. 8 . 11 u u Qu. 2 on 51 6 n e Qu. 3 n 51 n n Qu. 4 n 51 6 3 {:22 Hog Price @ $16.821th. Net income ‘ $ 26.741 26.741 28.512 Soybeans Acre 52 52 52 Corn " 153 153 153 Alfalfa " 31 31 28 Wheat " 44 44 44 Real estate credit $ 30.728 30.728 35.421 Chattel credit $ 21.904 21.904 26.001 Private credit $' 6.600 6.600 6.600 Yearlings fed. Pd. 1 Head, ‘ 102 " " Pd. 2 " 102 Dairy Cow Sows farrowed. Qu. 1 Sow 63 63 46 " " Qu. 2 u 63 63 46 n n Qu. 3 ll 63 63 “6 " " Qu. 4 " 63 63 46 .pconmcohnp uocfieaoh ma mcanovuo mans .oodnd moon on updnv on» ace .ooanm mo: cu uneven on» .ooayg shoe esp mo Hoboa an» op whence oocosvom on» ca popped pmnam any .hHo>Hpoodmou .mooapm zed one scares Acme: op homey A use s cm muopvoa came home: ona\m 172 mn.m- ma.m- Ha.a- Ha.a- an.m. ca.ca cm.cu oo.au ao.a- . ecpccc eccq m:.m ma.~ ac.a ac.a mm.a ao.a no. em. cucc\u eccaacco mm. mo.H He.~ am.~ . on .>cz . ma .600 mm. mo.H Ho.~ am.~ c ma .»00 u .cacm mm. mo.H . H0.N mw.m a . pmde< mm. mo.a Ho.~ am.m = aace . once mm. mo.H Hw.~ am.m A ac: . .Aca c£\fi .OOQ :9“: ..30h ...Gdh... Aconcq mo. mo. mm. ow. Ha. ca. mm. mm. cm. A Hcpaaco cc.mm mo.mm ma.mm ma.w~ NN.Nm ca.mm oo.mm aw.mm ao.mm g pasfla cmccncc cams: mm.ma mw.mm Hm.:d Hm.:d no.0m mm.mm mm.H¢ NN.mm N:.o¢ pfiada omeonae £900 2 onoe\w pfiada omeonom seem Amadvfibfivoevond,esde> Hecflmwmz mao.m aom.m mom.m mmN.m cam.m Hmm.m mao.m mma.m cmn.m .cna cc: Acnca acccmccm mam Hem Hem nme eccm mcaecce mom 3 mm mm mm 3cm mfizchfl mom ma = mace huaea om moa boa HOH ween mcflcoom wouacmnooa seq mm Rod NOH HOH cpficp.<_ mcflmccn eccm g ecpccupmccc caam mace vomwnoudd hem mam.oa cmc.ma :mc.ma ama.m woa.m mam.a ems.m cmo.ma .cm ecmcccnca ccco AflmmmmnmmwAmmmnn L qqx. A as: A qmzliw, 2m: A :2: A gas A was A as: A mmzw A page \MmCOHpe2HQSoo cowhm A . . . H mmdmm I «Had AHA momHHoDQomm mqu> AdZHommHmO< 09 ammHDomm mmm2Hll.oanm mnmda 173 TABLE B-11.—-OPTIMAL ORGANIZATIONS FOR SMALL CASH GRAIN FARM IN THE SOUTH CENTRAL AREA - PHASE 1 Beef Pricesger th. “Corn Price©$-97/BUShel Unit $15.33 : $20.45 : $2Kj6 (1) Hog Price @ $11.14[th. Net income $ 4.807 6.180 8.543 Soybeans Acre Corn " 23 23 23 Alfalfa " 26 28 28 Wheat " 16 16 16 Real estate credit $ 16.997 11.641 11.371 Chattel credit $ 4,361 4.361 4.361 Private credit $ 2.800 2.800 2,800 Yearlings fed. Pd. 1 Head 8 67 70 u n Pd. 2 " 8 67 70 Dairy Cow 21 1 Sows farrowed. Qu. 1 Sow II " Qu. 2 I! II N Qu . 3 II I! ll Qu. 4 I! 2 Ho Price @. l . 8 th. Net income $ 5.674 6.232 8,543 Soybeans Acre Corn " 23 23 23 Alfalfa " 28 28 28 Wheat " 16 16 16 Real estate credit $ 16.812 11.604 11.371 Chattel credit $ 4, 361 4,361 4. 361 Private credit $ 2,800 2.800 2.800 Yearlings fed. Pd. 1 Head 61 70 " " Pd. 2 " 61 70 Dairy Cow 9 1 Sows farrowed. Qu. 1 Sow 12 1 n u Qu. 2 u 12 3 n u Qu. 3 n 12 n n Qu. 4 n 12 4 ‘22 Hog Price @'§16.82[th. Net income $ 9,576 9,576 9.658 Soybeans Acre Corn " 23 23 23 Alfalfa " 28 28 28 Wheat " 16 16 16 Real estate credit $ 19.536 19.536 19.890 Chattel credit $ 4.361 4.361 4.361 Private credit $ 2.800 2.800 2.800 Yearlings fed. Pd. 1 Head 8 n n Pd. 2 n 8 Dairy Cow Sows farrowed. Qu. l Sow 19 19 17 n n Qu. 2 n 19 19 17 n u Qu. 3 n 19 19 17 u n Qu. 4 n 19 19 17 174 .auonwsohnu confidaoh ma msduovao many .oOHnm moon 0» finanp onu and .ooanm we: on ucooow on“ .ooahm.:noo onv no Hobod can on agency oocodwom can 2H moaned pagan age .hHo>duoommoh .moodhm 3nd one finance .Awdn on pouch A_uqd z“.m unoppoa omeo gong: ona\m nn.m~ mw.om mm. mm. ma.mm ma.mm ma.an :m an ow.om ow.om a daemon been wmém amen 36m 3.3 No.8 No.3 3.8 8.9“ 9:3 23; EH88 .. on :62 .. ma ...Eo = ma .poo . .pgom .. Swami .3 .. .3. - .... a hH:_L .um< 02\” 008. .03 .090.“ aozdhu ..enaq mo. ma. 3. n3. ._..N . AN . 3m . an . an . » 3....an .onéa $1.3 Ra .RA . moi .mm.m ems 8.: 8a .. 35H omega... 9.25 3.3 .mian Scum 3...... fig mmén 8.3 3.3 Rafi .. 35 88.8. 58 onow\» pdaaa omwouow zoom "modpfipduoath odadb no: .9: can” adzomuom m2 mam a8 em in Ram 92608 mom 0 0H 0H :a mom wndzonudw mom cu m a mzoo huddn mm mm 3 3 38 made...“ .82. :3 mm on .3 3 95.5.4 . 9:23 .188 mg an m m _. 33588 Sun mm «cos vommnonsn him an... 3...; as.» 966 Ema Sim Hmma Hana Rio .3 89293.1 58 “ . H mmdmm I <fiM< AHHU=QOQN abq<> AdZHumdzqaz< mZOHHmHmU< 09 nmmeamm mmm2HuI.NHIm mqmga 175 TABLE B-13.--0PTIHAL ORGANIZATIONS FOR.LARGE CASH GRAIN FARM IN THE SOUTH CENTRAL AREA - PHASE 1 Corn Price e $.97/Bushel : Beef Pr ces r . “nit :‘El .'33 ":‘JT‘Ezo. 5:." "9f ‘EZE: £12 gag Price 0 $11.14Zth. Net income Soybeans Corn Alfalfa Wheat Real estate credit Chattel credit Private credit Yearlings fed. Pd. 1 " Pd. 2 Dairy Saws farrowed. Qu. 1 II n Qu. 2 n I Qu. 3 n I. Qu. u ‘22 Hog Price 6 $13.281m. Net income Soybeans Corn‘ Alfalfa Wheat Real estate credit Chattel credit Private credit Yearlings fed. Pd. 1 " Pd. 2 Dairy Saws farrowed. Qu. 1 " Qu. 2 a ll Qu. 3 II II Q11. 4 (:12 Egg Price @fi6z8210wt. Net income Soybeans Corn Alfalfa Wheat Real estate credit Chattel credit Private credit Yearlings fed. Pd. 1 " Pd. 2 Dairy Sows farrowed. Qu. 1 " Qu. 2 II I Q“. 3 n u Qu. 4 £009}: a 3"!“ Read It Cow Saw a. 0 H69 0 5' aggaaG-fifi-fl-a : :3 3' ’10} O ===§§=‘§““$=== 8.688 84 1.19 62 39 24.832 16.398 4.100 84 84 28 7 11.440 119 62 39 23.256 17.918 n.1oo 13.695 84 1.19 28 39 18.171 22.061 4.100. 190 190 1 20.154 84 119 28 39 18.171 22.061 4.100 190 190 1 20.210 119 28 18.139 22.061 4.100 188 188 21.333 84 119 27 39 22.739 22. 061 4.100 .poommsongp vendopou ma wmdnoono mama .ooaum moon op vafinu on» use .ooanm won on uneven can .ooaum choc new no Ho>oa can on uneven oooodvom emu ma nonpoa woman one .hHobapoommon .moOAan 36a noo_asdvoa .nwdn op homey A one z”.m mnoppoa omoo gong: ona\m 176 and- $6. 3.4. 85.. 2.5.. 8...“- m~.~.. 3.4.... “~42. .. 635.. 23 Raw 34 34“ 84.. $3 aim $5 $5 .84 23; EH85 miu Rs... 36 Sum .33 $.m 8...... mm.~ 86- _., on .32 .. D .68 $3 nm.~ 36 2a $.m $.N $.N an: 86 .. ma .poo .. 5.8m 34 3A 3a 8A . 6392 9am mm.~ Sum 35 $4“ gm $.N 3.... 8A .. .36 .. 23. $3.. “3.. odm SA $.N $4.. $.m $.m men .. has .. 5%. e£\”eo¢ae§= gepah neg” “.3an mo. 3”. R. R. D. 3. um. mm. mm. » 3&8 co.mm. «H.3n NN.:N um.¢~ mm.am mw.dm mw.om um.o~ :n.mm a panda owoonoe woos: $5." 9% ~22 «3.3 8.9 Scam . .82 Hmés $.91 .. flan 88.8w 58 onoo\w udaHH omoohoo zoom 3.3 Rim 3a; 23; 8o; Rm; mum; 3m; Roam ..3 5: ~33 1:88...” Hub Ham mmo ma mom doom wzfiooom mom on .3 3 mm sow maonfio mom mm s mace undue 3 :2 m3 m2 Q: S Ho: 233.“ .83 :3 S :3 m3 9: 8H 3 33.4 9:38: comm 3 .. Eofipaoo £8 mmoa vomononsm how 3.13 80.2 83: fins 38.: $0.: :8... $13 .5 Ragga E8 “3 ....IiIIIIIIII'IIII‘I. II" 94!. “ Hz: u an: « ; “Sing“aulguauaos“ ‘Kmmflodmmmaomou_ewdmm “ . . H flmHaoDQomm MDA<> AdzHum<= n24 monHMHmo< ca QHMHDOHM mmmdeMDm 924 mszmzamfi>2Hll.:Hlm mAm 3H3: 9,3 mona A<2HummHmo< ca odeaomz mmmdmombm 92¢ mazmgnmm>2HII.mHIm mqm On Hand 7 4:33». 1960* ' Sold. 1960 Dec. 31 1960 £!.1“ Y Be I e ‘ a. F “6e 0 W ‘ “a 1’ V * (a) 8m 1 « L h < (b) Boera l l j (c) Spring piga born in 195 I! 1 n4 1! , xx. xx xx r 1 v r— (d) Spring pige born in 1960 4 { i (a) tall piga born in 1959 ‘ xx & xx xx (0 Fall piga born in 1960 i { T + ‘ W W (1) What type of farrowing houae do you have? Central Portable None a (2) what it the uni-n meter of aove that could be farrowed at one tine in facilitiea now on thia fern? (3) Bow neny cove farrowed in each south in 1960? January nay fl September + a February ' June fi_ October March - W July W November April Auguet December (6) new are your hoge finiehed for market? Confinement 0n paeture (5) Bow Iany piga can be fed at one time on the farm? (6) number of littera farrowed - Spring Fall (7) Number of pige weaned per litter - Spring tall *Wr-“M-W‘r ' e . ‘ . e x . £3: no .3 3323. 3 3.. as.» .3333 35:3 8. .39: mo en: unauoaue no 3333!: 33.325 noun-Sauna unseen £33333. venue: on nee none.— uu 3333}. .32—on one eon-nausea .533 now-Bane on: venison}. Eb [Ly ’5- h ll) - I ll 1: «11‘ {l {I ’ 'L Li! ’ [’7 ' it! I’ll? .' {F ll} I Ll.- ? ' I ’Ib- ‘1 J! A. 41441. l 11 l (I1 1‘ 11111 J. 1 1 1| 1} € - - tnuwmfl nuou -r . Ill ' lLl [II F r F + h ' b F. ILL Anna nnou‘ L! l h P pP I D > V I». b 1i, i [“1 iii 14 l l {I 11 i 1 1 1 ll) 4 «Hi 191 .. J14 1‘ 1 W and» 1 l 43.... 4% -1 1 3:3: £4.24 A 1 anon lb' i w - r :0 w 3141.13.» 1......3_—_.u.1e r imam rug ...-:8 ._ Ham Jam.“ mine a3 we“: «mal: \moouunuuoeuo undone. uoeaeoeunu veuoeon .uu oueomm no anon. new seam gum o3 3.8: 532.8 no .8 no .2 :3. c B: courage-2.3» . 192 IX Da Bnte inc 1960 Purchaoeo. 831cc. and puntg of vain 95313 (2) mos: , (3) mnber (4) 0n and“ nought in 1960 -' Sold in 1960 Deco-oer 31, 1960 (0) Hilk cm lo. L Value Ho. Value Value (b) Dairy heifer-o; 1 yr 1 (c) 4 2 yr. ; i # . I } L (:1) Dairy calveo ‘ ‘ 1 J i Steers I Y ‘ ( 3 f in + xxw _ at? v (3) now no, can treeheosd in each sonth? January . my . . Septedaer February June October Hatch July November April August Dec-her (4) What was the average production of silk per cos (poundo) DJ. teat 1. (5) Did you cell dairy producte on a grade A___ grade B____ or crees market? I (6) In your dairy barn a stanchion or loose houoinq type? A. I? A SW MRI: 3. IF 10053 HOUSING: (7) lit-her of otanchiono - ;_ (13) square feet of loading shed (8) “or of eingle (14) type of silking perla': “1“" “M“ ‘3;333.3%:1:2:::::-—-—-:::----—--~ m "33,: my a, m “muggy“: :-- (d) Side opening,yea (e) Herringbone, yea —“ (t) No. can on side (11) 1519.11". 7““ no ._.- (15) No. of aingle silkins unite .. (16) No. of double silking unita (12) Bull: tank, 200* no --' (17) No. of nilkere per silking (18) Pipelino, yeo_____ no (19) Milk tank. yee_____ no (10) Mr or silken per silkinx ‘Qa I 11" ‘v. .u ” . Beef Cattle Ente 193 inc 1960 A. Did you have a beef breeding herd on thia farm in 1960? 1? YES: (1) Purchaeea, Salea, and Inventory of m: Catt-1e. 1960 Bou t n 1960 A‘__A Sold in 1960 21ml Ht. gVa u: No.4 Wt}; On Hand 12-31-6] ’Value NOJEWt. Value b i 1 T 9 .4 21 Beef cove (b) Beef heifera, 1 year. Q t A Ah } u u- ggfi . 1 _e (c) Lee! beware. 2 year 1 (9) Bee; calvea (e) a... bull J . . (f) §tocker cattle, 1 yr. G; over 1 $3) Pattening cattle, fern rained I ‘ where-null“: hum-I ~3... . i. . i." i ’2: u;_ .‘ '3’ . 5 i now many beef cattle can you house in present buildings? (2) How many beef calves were: (3) (a) horn on thin farm (b) Sold in 1960 at weaning age (c) Put in feedlot on thia tars after weaning (d) Carried over on thie fern (e) 1 Calf crop Cave Young atock Were any purchaaed feeder or atocker cattle aold tree this fats in 1960? Yea No If YES, obtain the following inforsetion for cattle handled between fall of 1959 and fall of 1960: Feeding System for jeeder Cattle ' (2) Long-Fed Mint (6) Stocker Cattle (5) Winter and Fed on Pea ture and ( 3) (4) wort-Fed Winter-ed Drylot and led on (1) Item (a) timber of ateera n no (1) in how many of the loot 1.0 yeara were cattle bought for: PatteninL g . A Other_l.ivestock 194 Purchases. Sales and Inventory. 1960 A Consued L1960 w a Bought 1960 Sold 1960 03 find, 121 0‘ lo. ‘Value ‘ No. Value No. Value No. ‘ Value wool an: fl lb. V W *— 13L!!!" meet " : w __ "001 xx lb. , {b} Lasba seat , j "' A I Q) Feeder lambs _ wool n lb. {d} Other shag; meat M L WW 9888 dos. {a} Laying hens seat. as: A mullet; lr Q1) Turkeys - 1 (1) Eggs per hen for year (1) Percent lasb crop 5;! . Capital Poe ition You have given so considerable information about your farm and your farming opera- tions last year and the changes that you have made in the last few years. bios I would like to ask you about your situation with respect to the use of investment capital and how it sight influence your decision about making further changes in your farsing operations. 1. Bow Inch vould you. estimate you had invented in your farm business on December 31, 1960, at current market values? (a) Real Estate (1») Machinery, equiplnnt and supplies (c) Livestock (d) Crops held for sale and feed inventories (e) Cash for operation (E) Total 2. Do you have any additional funds and nonfarm investments which you could trans- fer to tars use to increase your investment in your farm business? 1! YES, what is the total amount? Yea lo 8 195 3. Do you have any outstanding loans which were sade for the purchase or operation of your tars? Yes No 1? YES. in order to estimate how much farsers could expand production, we need to know some details on the kinds of loans you have: (For each loan). A A Property Mortgaged Repa‘ nt schedule Payment Rate “TE due each due date 1 pay date Amount Original Dal. Owed to Purpose L T La) Real Estate (b) Livestock T ,F . g g." JO- .3" i; '1‘ u i g :3 i 4 5 ii A A Pars machinery gel and guigent _ ‘ A a ,- fifi ‘ Rto a Hold. W084 - P 1 A f Do you owe any money for other purposes? If so, we need to know some details about this. r Currant Purpose Other “total credit Owed to L Int. rate m E El Pad ‘ - 4 Date due1 ill Repairsfi (h) Fertiliser Doctor 6- ii) hospital y n m ' Other é A (It) ‘1.“ w‘ \1 Do you have any other unsecured loans including promissory notes. etc.? Yes No How much? 8 Source? (Dank. individual. etc.) 196 (1) Do you think you could borrow additl onal funds from any private individual? . It so. how much? 3 . At what rate of interest? What kind of security would be required? $ Do you think there would be any restrictions on how you used this money? . If so. what restrictions? (m) List up to the four beet "land rental" opportunities in your neighborhood tor the next year. Acres Jrggality Relative to Present Pars Annual:f Kind 0; ‘ Duration Better Same Poorer Rent Contract of L335... 1. .2. - W s 3. ‘ 4. r (n) List up to the tour best "land buys" which you know of in your neighborhood for the next year. f '- S Ac _ A lity Relative to Present Farm Price Pinanciggfi rug. ‘ Bet 801' 1' par 'K'ind Down W3. P'erc‘ent ‘ 8"“ Poore Interest 4. n _ ‘CEC te r r l. ‘ ‘ - fl; 2- in g __ . L 1. . 197 I, x111. Annual Operating Expenses on all the gang Operated lapensa Amount Expense .umount Pnel a lubricant to: tractor, Taxes & interest on all truck a fans share of auto la ated a- Nachinary 5 equipment . repair uildi s Re rs Veterinary ~idicims Breeding fees eghggigg;g_: A Electricity A . ._.... 4. a {N_ 2'. y . Inventories Purchases and Sales of Cro s Peed and Seed é Crop molt» 1960 Inventory Purchases , :9 . an. 1. 1960 Dec. 31, 1960 I V ‘ ‘“ 1* L; or livestock Amount . M's-m wfi’- -—- “Jill Other crops ngeansd £939 W * Pergilicer . J . Limestone J . ‘Pibtsin gggplemants*;_ Peed Grain £22219” ‘ A - *Chemicala. Dairy supplies. th. . BIBLIOGRAPHY Bainer, Roy. Kepner, R. A.. and Barger, E. L. Principles of Farm Machineu. New York: John Paley and Sons. Inc., 1955. Bonnen, James T.. McKee. Dean E.. and Sundquist, W. B. "Equilibrium Analysis of Profitable Adjustments in Lake States Dairying. 1965." Technical Bulletin in Press at Univ. of Minn’. Brooke. David M. Marginal Productigties of Inputs on Cash Crgp Farms in the Thumb and Saginaw Valley; Area of Michigan. Unpublished Master's Thesis. Michigan State University. 1959. Buller, Orlan. The Effects of Changes in Technology and Increasing Wage Rates on the Qgganization of Tree Eruit Farms in Michigan. Ph.D. thesis in preparation. Michigan State University. 19 3. Day. Richard. "An Approach to Production Response. " Agricultural Economics Research. Vol. XIV. No. 1+. U. 8. Dept. of Agri.. Econ. Res. Serv., Oct. 1532, pp. ljlt-lLIrB. Dvorak. Frank E. Programming the Organization and Capital Use for a Cash- Crop Farm in the Saginaw Valley and Thumb Area of Michigan. Unpub- lished Master's thesis. Michigan State University. 1959. Edwards, Clark. Resource Fixity. ngit Availability and Agicultural Organi- zation. Unpublished Ph.D. thesis. Michigan State University. 1958. . Shortcomings in Programmed Solutions to Practical Farm Problems." Jg% of Farm Ecgngcs, Vol. 1«'3. May 1961. pp. 393-401. Heady, Earl 0.. and Candler. Wilfred. Linear Proggamming Methods. Ames: Iowa State University Press, 1958. .and Egbert.. Alvin C. "Programming Regional Adjustments in Grain Production to Eliminate Surpluses." Journal of Farm Economics, Vol. 41 NOV- 1959. PP- 718-733 Hildebrand. Peter E. Farm Organizatign ag Resource flgty: Modifications 21' the Linear Programming Ligdel. Unpublished Ph.D. thesis. Michigan State University. 1959. Johnson. Glenn L. "Supply FunctionuSome Facts and Notions." Agricultural Adjustment Problems in a GrglLigg Econom. Edited by E. O. Heady, et. al. Ames: Iowa State University Press. 1958. . “The State of Agricultural Supply Analysis," Journal of Earn Econgmics. Vol. 1+2. 1960. pp. Mil-#51. 198 199 McKee. Dean E. "Input-Output Data. Linear Programming Model and Optimal Organization of Representative Farm Situations in Lower Michigan," Dept. of Agri. Econ., Michigan State University. 1961. Report from the U.S. Dept. of Agri. and a Statement from the Land-Grant Colleges, IBM 1, Advisory Committee on Farm Price and Income Pro- jections, 1960-65, Senate Document 77. 86th Congress, 2nd Session (Jan. 20, 1960). Schuh, G. E. "Beef Coefficients for NC-54." Agri. Econ. Dept., Purdue University. 1962. Sitterley. J. H., and Bare. Richard. "The Effect of Weather on the Days Available to Do Selected Crop Operations," Mimeograph Bulletin.A.E. 313. Dept. of Agri. Econ.. Ohio State’Univ., Aug. 1960. Smith, V. E. "Perfect vs. Discontinuous Input Markets: A Linear Programm- ing Analysis," Journal of Farm Economics. Vol. 3?. Aug. 1955, p. 538. Swanson, E. R. "Programming Optimal Farm Plans: in Farm Size and Output Eesearch." Southern Reg. Coop. Series. Bulletin 56, June 1958. pp. 7-57- . "Hog Coefficients for NC-Sh." Ag. Econ. Dept., University of Illinois , 1962 . ‘ Trant. G. I. Institutional Credit and the Efficiengy of Selected Daigy- Farms. Unpublished Ph.D. thesis. Michigan State University. 1959. Negley. Robert Vance. Marginal Productigities of Igyestments and §§pendi- turesI Selected Ingham County FarmsI 125 . Unpublished Master's thesis. Michigan State College. 1953. Nhiteside. E. P., Schneider. I. F.. and Cook. R. L. Soils of’Mgchigan, Special Bulletin 403. Michigan Agricultural EXperiment Station. 1956. “right. K. T. "Cattle Feeding Economics." anrterly Bulletin. Vbl. #4, No. 4, Agrgcultural Experiment Station. Michigan State University. May 19 2. . "Dairy Feed Costs and Returns," Agri. Econ. Mimeo 874. Dept. of Ag. Econ., Mich. State Univ., July 1962. . "Hog Feeding Costs and.Returns," Agri. Econ. Mimeo 869, Dept. of Ag. Eoon., Mich. State Univ., May 1962. Young. Robert A. An Ecoggmic Stggy of the Eastern Beet Sugar Igdustgy. Ph.D. thesis in preparation. Mich. State Univ., 19 3. 1‘“ <.%:%Efiaw USE ontv 00M :3: 53%?