SIZE OF FARM
The size of the farm is another of those questions on which there is
endless debate and to which no general answer can be given. There are,
however, certain rather definite principles which may help in settling
an individual problem.
The size of the farm is related to the income per acre. If one's ideal
or purpose is a gross income of $1,000 or $3,000 or $5,000 a year, he
must consider how large a farm will be necessary to bring this return.
Assume, for the sake of discussion, it is desired to obtain a gross
income of $4,000. In the eastern United States 200 acres of tillable
land devoted to general farming may bring this amount. If the land is
especially adapted to potatoes, and this crop takes a prominent place
in the rotation, 100 acres might be sufficient to return the income
named. Likewise a 100-acre retail milk dairy farm may produce a
similar result. Forty acres devoted to truck farming or market
gardening may be sufficient.
There is another way that the size of the farm needed may be
estimated. There is a general relation between the gross income and
the amount invested. In 1900 the gross income of the farms of the
United States was 18 per cent of the total investment, which includes
land, buildings, tools, and live stock. The average gross income
varied for the different types of farming common to the northern
United States from 16 to 19 per cent. This represents, of course, a
great deal of very poor farming. The income of prosperous farmers must
be somewhat better than this. If we assume that by careful methods the
gross income is 25% of the total investment, then an investment of
$16,000 will be required to bring a gross income of $4,000. While it
is true that the gross income has no necessary relation to net income
or profit, yet it is well to remember that a gross income is a
necessary antecedent of a net income. The net profit from the
production of a bushel of wheat, a dozen of eggs, or a pound of butter
is of comparatively small consequence unless a sufficient quantity is
produced.
A recent investigation by the Cornell station appears to show that
with the type of farming now existing in Tompkins and Livingston
counties, New York, where the investigation chanced to be made, the
larger farms yielded the most profitable returns and that while
present conditions exist, the size of farms is likely to increase
rather than decrease. The fundamental reason seems to be the
substitution of horse-drawn machinery for hand labor.
The following table shows the labor income on 586 farms operated by
the owners, classified according to size:
Number Average
of size Labor
Acres farms (acres) income
30 or less 30 21 $168
31 to 60 108 49 254
61 to 100 214 83 373
101 to 150 143 124 436
151 to 200 57 177 635
over 200 34 261 946
---- ----
Average 103 $415
While the larger the farm, the more prosperous was the operating owner
or tenant, the size of the farm did not seem to affect the profit of
the landlord.
The amount of land one individual may own is unlimited; the size of
the farm unit is limited. After a farm unit has reached a certain
size, depending upon the type of farming, the general arrangement of
the farm and the skill in management, any further increase will
increase the cost of operation, and as the increase continues
eventually cause a decrease in profits. Assuming this to be true, it
follows as a mathematical necessity that as the farm increases in size
the total profits will increase as the farm increases up to a given
point and then the profits will decrease. The following table
illustrates this law:
Size of A B
farm Net profit Net profit Net Profit Net Profit
acres per acre per farm per acre per farm
160 $5.00 $800 $5.00 $800
200 4.50 900 4.75 950
240 4.00 960 4.50 1,080
280 3.50 980 4.25 1,190
320 3.00 960 4.00 1,280
360 2.50 900 3.75 1,350
400 2.00 800 3.50 1,400
440 1.50 660 3.25 1,430
480 1.00 480 3.00 1,440
520 .50 260 2.75 1,430
560 -- -- 2.50 1,400
In both case A and case B it is assumed that the greatest net profit
per acre is to be obtained with 160 acres, and that the net profit per
acre when the farm is of that size is $5. In case A it is assumed that
the net profit would decrease $1 for each 80 acres added, while in
case B the decrease is assumed to be only one-half as rapid. In the
first instance the net profit per farm increases until 280 acres are
reached, when the net profit per farm decreases, until at 560 acres no
profit would be obtained. In case B the net profit per farm increases
until 480 acres are reached. Everyone is cautioned not to accept these
figures as representing what would actually happen. All that can be
said is that as the farm unit increases in size there will come a
point at which the net profit per acre will decrease because of the
physical difficulty of managing a large area, and, therefore, there is
a limit to the size of a single farm. Fifteen thousand acres may lay
in one tract and be owned by one individual, firm or corporation, but
its economic management requires for purely physical reasons, not to
mention others, that it be managed in several units more or less
distinct from one another. Just what the size of this unit will be no
one knows and it will vary with the type of farming, the type of
farmer and many other circumstances. For example, a very common unit
for a tenant cotton farm is between 20 and 50 acres, both the product
and the farmer being a limiting factor.
Perhaps the most important lesson to be learned from a study of this
table is that it is wise for some men to operate a farm of 320 acres,
others of 160 acres and still others of 80 acres, because each size of
farm presents a task suited to different abilities. It would be as
futile for one fitted to operate only an 80-acre farm to attempt to
manage 320 acres as it would be unwise for the man capable of conducting
320 acres to confine his attention to 80 acres. Unfortunately while this
principle is not difficult to perceive and is easily stated, it is
practically impossible to make any application of it to an individual
case. Only time and the inexorable laws of competition will adjust men
to their several tasks.
It will be of interest to note what influence in actual practice the
type of farming has upon the size of the farm. The census reports the
average size of all farms in the United States as 147 acres, with the
different types as follows: Vegetables, 65 acres; fruits, 75 acres;
dairy products, 120 acres; hay and grain, 159 acres; and live stock,
227 acres. Speaking in a very general way, only about one-half the
land on these farms is in cultivated crops, while only 40% of the
income may be from the products which cause the farm to be thus
classified. The young farmer will do well to have these figures in
mind when he starts out in life, for while they are not to be followed
literally, they give him a measuring stick with which to compare his
operations.