Farmers’ Costs

Dominion, Volume 26, Issue 98, 19 January 1933, Page 9

Farmers’ Costs

Sir, —Air. Bond’s balance-sheet will not stand up: it is built on a wrong foundation. Sixty acres carrying 35 cows, at £7O per acre: At no stage of the journey was it worth it. No experienced land valuer would have put in a Jiigher estimate four years ago than a 2501 b average per cow (no dairy factory in the Wellington province can show this high figure), and 1/3 for butterfat Ithis is 50 per cent, higher than pre-war). Mv firm had a formula thirty years ago (the Goat-herd in Chaldaea used it in 3000 B.C.)— a dairy farm must produce three rents, one for the ground, one for living and working expenses, and the third for interest on stock sinking fund, improvements, etc. Thirtylive cows (2501 b average), with butterfat at 1/3, equals £546; less 20 per cent depreciation on herd, £lO9, leaving £437. Rental value equals £146 and, capitalised at 6J per cent., values the farm at £2246, not £l2OO as paid by Air. Bond. The gentleman now complains that his interest bill is too high; it certainly is, but surely the remedy w’as in Mr. Bond s hands the day he bought the farm.—l am, pfp AGENT FOR LAND. Wanganui, January 16.