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Labor Efficiency
Important Factor
On Dairy Farms
Efficiency of farm labor is an important consideration in managing the farm business, says Robert K. Reynolds, agricultural economist at Virginia Polytechnic Institute. Ineffeciency in the use of farm labor increases labor costs, and lowers farm profits. t Figures from 101 Grade A ! dairy farms enrolled in the VPI ! Electronic Farm Account Program in 1961 show that about 20 percent of the total farm expense was attributed to labor. This did not include various “fringe benefits” such as a house to live in, a garden, medical expenses, milk, etc.
On these farms, almost 15 percent of the total farm receipts were spent as wages for hired labor. Labor cost per day of productive work averaged $7 on these. Grade A dairy farms. This is three times greater than it was 10 years ago, says Reynolds.
Labor cost is influenced greatly by the efficiency with which labor is used. Labor income is net farm income less a 5 percent charge on the average capital investment.
The 101 dairy farms were divided into high income, medium income, and low income farms. Labor income averaged $9,115 on high income farms $2,693 on medium income farms and a loss of $3,504 on the low income farms.
The more successful farms
80.9%