OF THE DELAWAR

I

LTV

Radio

Farm

Editor

"Doc" Webster

in- terviews a South Lebanon

member.

Engine maintenance was oneof23

FFA

demonstrationsgiven during the week.

State President Santz bids Miss Milk-

Window

displays carefullyconstructed by a score of Pennsylvania chapters tell

maid

welcome

from 9,500 members. ^{*ne public} about the FFA. These Future Farmers study a nearby

FHA

exhibit.

nflNITV HK5H

S^T

(Editor's note: Helpingyou plan your investment in farm machinery is the subject forour "Herebythe

Owl"

panel of advisors and a

USDA

specialist.)

'Here by the Owl

Mr. Advisor:

"Should

I

buy

all

the machinery

I

can when

^I first

go into farming or wait

^until

I

become better established?"

E.

Grady

Hendrix

FFA

Advisor Jasper,

Alabama

THERE'S

^{an old adage that says,}

"It takes

money

to

make

money."

But there is another adage that states,

"He who

flieshighest fallshardest."

Rarely, possibly never, would I rec-

ommend

that a Future

Farmer

go into farming by purchasing all the machin- ery that he could. In

many

cases, debts are easier to

make

than pay.

I believe

some

kind of purchase-pay index must be con- sideredbefore buying farm machinery. Analysis of thein- dividual, such as farm background, vo-ag units, business training,andotherareas,should bemade.Afterthis analysis.

1 think

some

criterion

may

beformulatedas tothe student's borrowing-pay backschedule.

Many

timesI seeyoungpeo- ple buy machinery and then

become

unable to meet the payments.

I'm fully aware that these sales personnel are an im- portant partof ourdistribution system, but nevertheless, a beginning farmer needs competent wise counsel for large investments such as machinery. It is

my

opinion that a young

man

going into farming must carry the philosophy

"Learning by Doing" as he grows into greater capabilities of production and management.

With

my

experience,I'd

recommend

growing and expand- ingas you go intofarming.

R.

W.

Guinther

FFA A

dvisor Si.Joe, Indiana

A ^YOUNG

^farmer

^who

^{is not fully}established in farm- ingshould buyonly the machinery he needsto main- tain his supervisedfarming program. If he is buying land, he should not buy a large

amount

of machinery that will tie up his workingcapital.

If theyoung farmer is renting land, he will be able to buy

more

machinery. Thiswould put him in debt further;

however, he would be able to use more of his

money

to pay for bettermachinery.

A

beginning farmer should also understand that the rate of interest on the

money

borrowed to purchase machinery wouldjeopardizehisworkingcapital. Also,he must under- stand thattheavailabilityof

money

will playan important partinhisinterest rate.

I feel that if finances allow, the young farmer should purchase

new

machinery to cut

down

the costly expenses thatarefaced

when

he hastorepairandreplace usedmach- inery parts. Going in debt is no great sin, as

some

feel.

If finances don't allow you to have ready cash forma- chinery,thenborrow

money

andbuyjustthemachinery you will need to continue the supervised farmingprogram you had in vo-ag.

32

£Y

^'

^YOU'RE PLANNING TO FARM!

Did you

know .^^

^that the average farmer's investment in farm equip-

^-^

_{ment has increased 10 times inthe} past 20 years?It i^

now

over$2,000per worker. Thisisanationwide average, but most Future Farmers

know

that it's not

uncommon

to have $10,000 invested in machinery and equipment on the family farm.

How

then can

we

reduce this investment to free capital for

more

profitableuses?

Mostofthis investment isin harvestingequipment since young farmers want timely crop harvests.

Our

research showsthe most

common method

ofkeeping machinery in- vestmentsto a

minimum

is throughcustomoperations. This has provenquite effective in reducing the costs of owning harvestingequipment.

Another method of loweringequipmentcosts hasbeen to share

work

and equipment with neighbors.

A

farmer

who owns

a corn picker, for example,can pick the corn on his

own

and the neighbor's farm.

The

neighbor, in turn, can use hiscombine toharvest the grain onboth farms. In this way, each has only toinvest in onelarge piece of harvest- ing equipment. Usually any differences in acreages are workedoutbylocalcustomrates.

A

third method of reducing investment costs is through cooperative ownership of equipment. This generally takes two forms: (1)

A

group of farmers purchase a piece of equipmentwith each individual payingin proportion to the usehe expectsto getoutof themachine;or(2) eachfarmer

may

agreeto useapiece ofequipment, which he owns, on another farm or permit other farmers in the group to use

itthemselves. However,thismethod has not always proven successful because several of the farmers

may

need the machine at thesametime.

Intheseexamples

—

hiringcustom work,tradingworkwith neighbors, or joint ownership

—

^{harvesting equipment is}

almostalwaysinvolvedbecauseitusuallyrequires the highest initial investmentandoperatingcostperacre.

Thisalsoappliestotherenting ofequipment.That is,you would rentonlyequipment thatyouwould needduring the important harvesting season. Recently, both farmers and machinerydealers have

shown

increased inteerst in renting.

And

it is likely that thistrend will continue to increase as the need for high-cost equipment increases. There are ad- vantages for both the farmer and the machinery dealer in rental agreements.

Ifyoung farmers havetheopportunityto rent apiece of equipment,thevwon't havetodepend onacustomoperator orshareequipment

when

itisinconvenient.

And

the dealer has the advantage of earning additional

money

from an otherwise vacant machine on his lot. Before

we

go any further,let'sexaminewhat

we

^needforageneralfarm.Sup- pose

we

haveadairyfarmwith

some

hogsontheside.

TheNational

FUTURE FARMER

Il\

Richard

T. Dailey

To

beginwith,theFuture

Farmer

willneedacompleteline oftillage equipment: tractor,plow, disc, and harrow. Next he will need planting equipment: planter, grain drill, grass seeder, and fertilizerspreader. Inadditiontotheseitems,he will need a sprayer, cultivator,

manure

spreader, and a

manure

loaderifhe hasaloose-housingsetup.

He

must

own

orhave accessto aline ofharvesting equipment consisting of abaler, combine, forage harvester, corn picker, wagons, elevators,andsilo-fillingequipment.

We

specialists suggest that young farmers

own

^{as few} items ofharvesting equipment as possible.

As

pointed out earlier, these are items with highoverhead and high annual costs. In other words, theirinitial costs areexpensive, their depreciation rate is high, and repaircosts on a per-hour or per-acrebasis aregenerally quite high.

On

theother hand, it's a good ideato purchase tillage, planting,andmiscellaneous itemssuchas a

manure

spreader, sprayer, and wagons. These items are used most often and haverelativelylowrepairrates.

They

aregenerally considered as basic investments on a good farm. Future Farmers can use theirvo-agshoptraining tohelp themin selectinggood usedequipment tokeepthe initial investment even lower.

For a good illustration of the costs involved in renting versusowning equipment, let's consideratypical dairy farm situation.

The

farm has 30 milk cows. 40 feeder hogs. 13 acres of corn, 5 acresof corn silage. 18 acres ofoats. 1

8

acres of wheat. 31 acres of rotation pasture, 23 acres of alfalfa-orchardgrass, and 15 acres ofpermanent pasture.

A

six-year rotation on the 108 acresof cropland is followed, and

we

canseethat thecost ofowning a completeline of harvestingequipment for thisfarmwouldbe very high.

The

two tables illustrate the differences in owning and renting harvestingequipment for this farm.

We

can assume thattheFuture

Farmer

already

owns

onetractor.Harvesting ratesvary from onearea toanother, of course.

We

canseefromthetables thattheannual savings in the farm situationdiscussed areabout $750 in favor ofrenting.

Furthermore,youngfarmers caninsure better quality crops

when

they havethe equipment on hand

when

needed. This

may

notalwaysbe the case

when

sharingitwith other farm- ers.

Atpresent, the practice of renting isnot widespread due to farm machinery manufacturers' being opposed to the rental idea in thepast. However,

many

dealers are settling with the manufacturer, then renting the equipment them- selves.

Many

times the dealerwillrentgoodusedmachinery takenona trade-in. Itisalsobecomingpossibletoleasevour entire lineofequipment from acommercialleasingorganiza- tion as

many

manufacturersdo.

Ifrentingfarm equipment seems likeagood

way

foryou to startoutinfarming, consider these factorsfirst. (1)

What

April-May, 1963

isyourlaborsituation.' (2)

How many

acreswillyouusethe equipment on? (3)

Can

you

make

satisfactoryarrangements with a dealer to get the machine

when

you need it?

From

theinformation given inour example, you can budget your

own

farmsituation after gettingtherentalchargesfrom your dealer.

Advantages of renting are no insurance or depreciation, littletimelostin maintenance, no^servicing, and nohousing required for the equipment.

And

the most important ad- vantage in renting your machinerv ^is the reduced capital investment.

A

farmer can use the

money

saved in

some

otherphase of his operation which

may

have a greater re- turn perdollar invested.

Rental Costs of llanesfing

Equipment

Item No.days Rentalcost Total

needed per day rental cost

Tractor 17 $34.00 $578.00

Baler 5 22.20 111.00

Combine 5 17.10 85.50

Forageharvester 4 21.00 84.00

Corn picker 3 16.30 48.90

Total $907.40

Annual

Cosis of

Equipment

Owned

Rented

Depreciation $1.104 ...

Intereston investment 442

Repairs and maintenance 220 110

Rental charges 907

Totals $1,766 $1,017

Difference $ 749

A

formula ol rental rates as aguide to dealers

who

rent equipmenthasbeenworkedoutby

The

NationalRetail

Farm

Equipment Association. These rates are computed on the basisof the delivered price ofa

new

machine.

I1) 1 percent of the

new

price for a 10-hourday.

(2) 5percent of the

new

price foraweek.

(3) 15percent onthe samebasis for a month.

(4) 25 percentfor atwo-monthperiod.

(5) 33'.i percentforthreemonths.

Under

the terms of rental contracts, the customer is re- sponsible forrentalcharges, deliverycoststo and from the dealer, lubrication, fuel, and repairs to the machine.

The

dealermust provide liabilityinsurance to cover anyone in- jured on theequipment and

make

sure the equipment is in

goodoperating order.

AuthorDaileyisan ageconomistwith the

USD A

andhas antlwredseveral booklets on planning investments.

33

THERE'S

^{gold in}

^them

^thar'

HENS!

This is the

way

you could

sum

up the tenth Fact Finding Conferencefor junior poultry-

men

held recently inKansasCity, Mis- souri.

The

gold was not only in the hens but also in the eggs, the broilers, the turkeys, and all the related career op- portunitiesinthepoultryindustry.

The

junior delegates were exposed to the dramaticchanges and challenges inthe production, processing, and marketing of poultry and eggs.

The

Junior Conference is a part of the regularPoultryand

Egg

Fact Find- ing Conference held each year by the Institute of American Poultry Indus- tries.

The

JuniorConference isjointly sponsored by theInstitute and the fol- lowing co-sponsors:Vocational Agricul- ture Branch, U.S. Office ofEducation (FFA);

The

National4-HService

Com-

mittee, Inc.: and the Cooperative Ex- tension Service.

USDA.

Representing 22 states,the72 junior delegates were selected in

many

differ- ent ways. Most juniors were on ex- pense-paid trips provided by firms or organizations in their

home

states. All of the delegates had demonstrated an interest inthepoultrybusiness.

For example. Delegate

Rod

Bruland, a Future

Farmer

fromEverson,

Wash-

ington, was the 1962 National

FFA

Foundation

Award

winner in poultry.

Rod, along with a 4-H representative, was sponsored by theWashington Jun- ior Poultry Exposition.

FutureFarmersGeorge Brown,

Lyon Young

and Larry

Kemp, members

of the poultry judging team from the Dardanelle, Arkansas,

FFA

Chapter, had their trippaid forby theArkansas Poultry Federation and Arkansas Val-

Symbol

ofthinking big, Sec. Freeman and Poultry Institute Board

Chairman

John Hargreaves breakgiantwishbone.

Finding Facts

about the Poultry Business

B\ Howard Carter

ley Industries,apoultry processingfirm.

Other Future Farmers were in attend- ance but greatly outnumbered by

4-H

delegates.

"The

FFA

ismissingabetin nottak- ing greateradvantage of the opportuni- tiesprovidedbythe junior conference."

saysHaroldDuis,programspecialistfor Vocational Agriculture, U.S. Officeof

Education, and a

member

of the steer- ing committeefor theconference. Mr.

Duis suggested that Future Farmers withaninterest inpoultryandtheirad- visors should look intothe possibilities of gettingupadelegation toattend the conference. If your state already has adelegation,perhapsitcanbe enlarged.

Inexplaining the purposes of the Jun- iorFact Finding Conference,

Rex

Par- sons,program director for the Institute of

American

Poultry Industries, em- phasized the revolution in the poultry business and the

many

career oppor- tunities foryoung people.

He

said the Institute hoped the Junior Conference wouldgive the delegatesabroader view of the poultry industry.

Of

particularinterest to thedelegates were the educational and commercial exhibits.

More

than150 companies had booths showing everything from

A

to

Z

inthe poultry business.

From A

for automation through

Z

for zygotes (fer- tilized eggs), the exhibit hall was a popularplace with thedelegates.

The

Juniors joined the adultfact find- ersforone morningsession tohear the Secretary of Agriculture, Orville Free- man. Secretary

Freeman

discussed

some

of the problems and challenges of the European

Common

Market.

In addition tothe

many

otherworth- while experiences, the delegatesalsohad achanceto apply for a$1,000 college scholarship sponsored by the Chicago Mercantile Exchange.

By

participating in clinics and dem- onstrations,viewing theexhibits,andat- tending the conference, the Junior Fact Finders didjust that . . . foundfacts.

Factsthat helped them realize there is

a real future in agriculture.

And

for them,thatfuturecould beinthepoultry and eu« business.

Rod

Bruland, FFA'er

who

operates a 28,000-layer enterprise, shows junior fact finders the marketing process on poultry.

One

of several demonstra- tions and panel discussions conducted by the delegates during the meeting.

'Afjfx? A0

/

***&&fe^

^{^r.-v}

1

'

%<>;'.:-

*

TheNational

FUTURE FARMER

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Name Address

Town

I

I

.State.