Economic and Marketing Information
FOR INDIANA  FARMERS
Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana   
May 31, 1969
WHAT THE 1968 FARM RECORDS SHOW
&
by F. V. Smith, Agricultural Economics
.VERAGE FARM LABOR income (net farm income minus 5
per cent interest on the capital investment) for 341 Indiana farm
account cooperators was $7,935 in
1968 compared with $1,042 in 1967
(Table 1).
The higher farm labor incomes
in 1968, resulted mostly from an
increase in volume of business and
higher crop yields. The increase
in net cash farm income accounted
for about one-half of the increase
in earnings in 1968 and the increase in inventories accounted
for the other one-half. The index
of the prices of Indiana farm products averaged about the same for
the two years.
Livestock prices averaged
slightly higher in 1968 than in
1967, grain prices were lower, and
prices paid by farmers for production items purchased were
about 4 per cent higher. Yields
per acre of corn, oats and soybeans
in the northern and central areas
were significantly higher in 1968
than in 1967. Corn yields in the
southern area averaged 93 bushels
per acre in 1968, 22 bushels less
than the record high in 1967. Average labor income in the south
ern area in 1968 ($7,698) was
slightly lower than the $8,197 average in 1967. The 1968 averages
for the northern and central areas
were $8,805, and $7,555 compared
with $210, and -$1470 for the two
areas respectively in 1967. In
1967, drouth in these areas cut
grain yields substantially.
Cooperators' farm units average
larger than the average for all
farms in Indiana and are operated
somewhat more efficiently. Although data from cooperators'
farms reflect the trends in farm
earnings in the state, they should
not be considered representative
of all farms in the State.
Farms and Investments Larger
Average size of cooperators'
farm units (457 acres in 1968)
was about 60 acres larger than in
1965 and more than 100 acres
larger than the 1961-65 average.
Capital investment per farm unit
in 1968 ($229,483) was about
$60,000 larger than in 1965.
Real estate investment, estimated at 75 to 80 per cent of 1968
values, averaged $168,081 per farm
unit in 1968. Machinery and
equipment, at depreciated values,
averaged $20,743. The investment
in feed, grain and supplies and in
livestock, at market prices, averaged $19,275 and $20,839 respectively. Capital investment per man
increased to $124,470 in 1968—an
increase of $8,746 over 1967. The
number of men per farm unit in
1968 was about the same as in
1967—1.84 compared with 1.90.
Earnings Related to
Size and Efficiency
With relatively stable prices
and generally favorable yields in
1968, average labor incomes increased as the size of farms increased. The only exception to
this in 1968 was that the average
labor income for the medium size
farms in the southern area was
less than for the small farm group
(Table 2).
One of the most significant
facts obtained in the annual farm
business summaries is the wide
difference in average labor incomes between the most and least
profitable groups of farms of similar size in each area (Table 2).
For example, the average labor income of 72 large farms in central
Indiana was $9,549. However, the
average labor income for the 26
most profitable large farms was
Table   1.     Average investment, incomes, expenses and earnings of farm account cooperators in Indiana in
1968 compared with other years
1968
1967
1966
1965
1961-65        1955-59      1945-49      1935-39
Number of farms 341 437 470 481
Acres per farm unit 457 442 430 ^, ^ 398
Capital investment $229,483 $220,365 $202,748 $169,722
Cash income $ 63,920 $  59,169 $ 61,485 $  52,154
Cash expenses 47,983 46,889 45,391 37,950
Net cash income 15,937 12,280 16,094 4,204
Net inventory change 3,954 155 6,314 10,422
Net farm income* 19,410 12,060 21,937 24,209
Farm labor income** $    7,935 $     1,042 $11,799 $15,723
Rate earned on investment! 4.8% 1.9% 6.9% 9.5%
498
349
$133,511
$ 42,357
30,856
11,501
3,497
14,679
$    8,004
6.4%
518
279
$87,494
$26,729
19,960
6,769
827
7,356
$  3,001
4.3%
585
225
$42,092
$16,325
10,073
6,252
2,057
8,025
$ 5,921
15.1%
793
204
$19,973
$ 4,913
2,767
2,146
416
2,443
$   1,445
9.7%
* Net farm  income is net cash  income, plus   (or minus)   net  inventory change, minus the value of unpaid family  labor.
** Farm labor income is the return for labor and management tothe
owner-operator or to the owner and operator on rented land. It is net
farm income" minus 5 per cent interest on the total capital investment.
t Rate earned on investment is net farm income, minus the labor
charge for the operator ($320 per month in 1968), minus a management charge for both the operator and the landlord <8 per cent of their
respective shares of the value of farm production), divided by the total
capital investment.   No charge was made for management prior to 1957.