THE PRICE OF LAND.

New Zealand Herald, Volume LXV, Issue 20105, 16 November 1928, Page 16

THE PRICE OF LAND.

Sir, —With reference, to my formula for computing the value of dairying land that the carrying capacity in cows per 100 acres equals the value per acre in pounds sterling I would like to make it clear, for the information of several inquirers, that it is only meant to apply to made farms of good quality, conveniently situated, well watered, properly subdivided, with adequate buildings; i.e., good dairy farms. In this connection your correspondent "Interested" asks: (1) What should an average cow return 1 and (2) price per acre of (a) 100 acres carrying 50 cows; and (b) 200 acres carrying 50 cows. I take it he wants proven facts, not doctrinaire estimates. The economic, that is, the earning, value of a made dairy farm can be computed from actual results; its market value is influenced by various changing factors. In your columns two correspondents offer answers to "Interested's" questions. Mr. H. R. Jenkins, dealing with a 100-acfe. 50-cow farm, says that a farmer paying 6i per cent, on £SOOO, and working expenses would lose £1 17s per cow—if he milked £lO cows, averaging 1801b. per cow! Anyone who tries to make £SO land pay with 1801b. cows would not take very long to lose the farm. Mr. Jenkins concludes with the consoling assurance that "if the butter-fat, return could be increased to 390 the (net) profit for 50 cows-would be £465." plus "£IOO additional revenue" from by-products. This, of course, would be free of income tax, or house rent. Quite all right for the farmer—until he wakes. "Also Interested," a practical pioneer farmer, is much more helpful, up to a cert#in point. He answers onestion (1) thus: "My cows averaged 2621b. per cow ir a dry season. ... 50 cows » will return £BB4, with the usual by-prc* ducts, £1000." This £lO per acre.;* a good return, but not at. all out of the way for a good dairy farm carrying a cow to two acres. Unfortunately no figures whatever are given concerning expenditure. The opinion is offered that an average good dairy farm of 100 acres carrying 50 cows would not be "too sound buying at over £3B to £4O per acre." It would be interesting to know the details of the debit side of the balance-sheet on which this computation is based. Mr. Fawcett's average "maintenance cost," arrived at by analysis of over 200 actual returns, say £5 10s per cow, is almost exactly the sum total of the items of expenditure used in the calculation on which mv formula is based. My figures are the mean of a large number of actual returns. For 100 acres carrying 50 cows: Manure and seed. £135; repairs and depreciation, £SO; power and incidentals, £SO; rates, insurance, etc., £4O; total, £275—£5 10s per cow. Then we must allow another £IOO for interest on cows, etc., and replacements. Deducting £375 from £looo—my estimate of gross production—we get £625—£300 for interest on £SOOO, at 6 per cent., and for the farmer and his family, £325, free of income tax and house rent, with free milk and butter, and the many advantages which only those who lived on the land and by the land during the long lean pro-dairy factory years can fully realise. With regard to "Interested's'" 200 acres carrying 50 cows if this is the fully developed capacity it hardly comes into tho category of first-class dairying land which should carry at least 40 cows per 100 acres: if only partially developed it is evident <hat no definite rule can lie: used in estimating its value; each case must be judged on its merits. I have been asked by a correspondent how I can tell what the price oj butter-fat is going to be next year. I base my estimate on Is 4d per lb. If the price is better he will have a better income: if it falls, whicli is not at all likely; he must trv and improve his test. Hamilton. J. S. Browne. November 15, 1928.

Sir. —In reply to your correspondent of November 12, signed "Interested," I consider l.lio following would be' fair buying: 100 acres, to carry 50 cows in a good locality within 30 miles of Auckland (South line), with metal road to giiite, near the main highway, all in giiiss, fenced into suitable paddocks, well watered, with a fivo or six-roomed house, with fail conveniences; good concrete cowshed and yard, with milking machine installed, is worth £SO per acre. A 200 acre farm in or near the tamo locality, to carry 50 cows with the same conveniences, should ha worth about £3O per acre, as if tho land was at all workable a good farmer iu two or three years would make it carry another 25 cows with a few head of young stock extra. Of course, land in a poorer locality, further away, and roads not very good, is much cheaper. A good herd of 50 c"ws should average 2801b of butter-fat per cow. With a number of herds well managed the average is over 3001b. per cow, but u go<~>d number of herds run between 2401b. anfl 2701b. per cow. J estimate income from 50 cows averaging 2801b. per cow, 14,0001b. at Is 5d per lb., C 992; 20 yearling heifers, at £5. .C 100; 24 Bobby veal calves at 10s, £l2 (allow ing for six dead calves); pigs, a near estimate, is £75; total £1179. Hie cobts of milking 1 estimate on one-third shares on £1179 at £393; top-dressing, not less than £100; rates, taxes and insurances, about £4O; casual labour, about £3O; 6 per cent, interest on £SOOO, £300; total, £B6O. The above does not include price of cows, the cost of which is from £l2 to £l6 each at present; about two bulls inquired, cost about £4O; also two horses and some implements, costing about £IOO. Manubewa.