DAIRY FARMERS' COSTS.

Auckland Star, Volume LXIII, Issue 290, 8 December 1932, Page 6

DAIRY FARMERS' COSTS.

VALUES AND PRODUCTION. _ (To the Editor.) A paragraph tinder the above heading appearing in your edition of the sth inst,, quoting costs submitted by a Mr. E. 0. Bond at a meeting of the Farmers' Union at Feild"-' in"- roused my interest, and as an accountant I could oniy.come to one conclusion, that the man who purchased the 60-acre farm in question at.i£7o per acre was an optimist of th© first water, with more money than sense, when he paid a deposit of £800 and took on a mort<*a"-e of £3400. The figures quoted included interest" £170 (£3400 at 5 per cent), but surely this should be £210, to allow of the farmer receiving 5 per cent on the capital he sank in the iniquitous deal. The remaining figures, with the exception of household expenses, we will take as read—£243. Then surely Mr. Cocky is entitled to return for his labour, say, £200 per annum, in addition to interest on capital. This will make total costs of £653 per annum. The figure for household expenses is absurdly high when one considers that }>y far the majority of, household requirements are supplied off the farm, e.g., milk, butter, e«gs, potatoes, vegetables, fruit in season, and for jam making, poultry and even bacon, not to speak of firing in most cases. In any case, as we are allowing Mr. Cocky wages as aijve, the remaining household expenses are surety his own funeral, not to be counted as costs. To proceed, if butterfat is only 9d per lb> then the 35 cows will have to average very, close to 5001b yield to pay the costs, or else, if 2801b is the best average, then butterfat would have to yield very close to 1/4 per lb to foot the bill. Which figures only prove how foolish the purchaser of the farm undoubtedly was, for he certainly bought without counting his costs'. With interest wiped out altogether the present. yield and price would not pay the outgoings, so that the mortgagee who ' was probably the vendor —should he made to reduce the mortgage principal to vanishing point, for no farm in the world was ever worth £70 per acre for butterfat production. It is to bolster, up such deals as this that the farmers and mortgagees are so keen on a high exchange or hutterfat premium," which is merely an alternative method of "robbing Peter to pay Paul's" creditors. .. „ -■ . ONE OF THE PETERS. I am told on authority that a 60-acre farm costing £70 per acre should carry a cow to the acre. If this is incorrect, then the farm is only worth £15 per acre instead ofi £70. Fancy paying £4200 for a farm to carry 35 cows. If a commercial man bought a business on such a basis he would be in the bankruptcy' court without sympathy. INQUISITIVE.