University of California 
 College of Agriculture 
 Agricultural Extension Service 
 
 A SURVEY OF THE COST OF PRODUCING POTATOES 
 IN THE SHAFTER- WASCO DISTRICT OF KERN COUNTY 
 
 By 
 
 Arthur Shultis 
 March, 1934 
 
 Contribution from the 
 Giannini Foundation of Agricultural Economics 
 Mimeographed Report No, 32 
 
A SURVEY OF THE COST OF PRODUCING POTATOES 
 IN THE SHAFTER- WASCO DISTRICT OF KERN COUNTY 
 
 By Arthur Shulti 
 
 This report is the result of a survey requested by potato growers in the 
 Shaf ter-Wasco area. The purpose of this survey v/as to discover as nearly as possible 
 the inputs of labor, material, and the overhead costs in the production of potatoes 
 so that growers would have data available to help in solving their management prob~ 
 leras* The costs shown in this report are computed in the same manner as in the 
 other enterprise efficiency studies carried on by the Agricultural Extension Service 
 in many counties and with many crops. The cost items are, therefore, comparable with 
 those shown by the studies on potatoes for this area in 1927 and 1928 and with those 
 shown by the study in the Chino area in 1933. 
 
 This report is submitted in two parts. The first part comprises the actual 
 costs for the 1933 crop, which are shown in detail in tables one to six. The second 
 part is the estimate of costs for 1934, shown in tables seven and eight. The costs 
 shown for 1933 were obtained by the survey method rather than by the monthly report 
 method by which most of the enterprise efficiency study records are secured. Indi- 
 vidual growers were interviewed and costs were obtained item by item, either from 
 the memory of the grower or from his records. All estimates v/ere checked to actual 
 records from other sources and found to be within the reasonable range of such items. 
 
 The estimate of costs for 1934 is based upon the actual labor and material 
 inputs for the 1933 crop computed at 1934 prices, with a few minor variations to 
 make this estimate a more representative average for the district. Such variations 
 are explained in Part II so that the reader may make further variations in computing 
 a cost estimate under slightly different conditions. The costs in table seven are 
 based on a yield of 200 sacks per acre which is about the average of the district, 
 while table 8 shows the costs with varsang yields. 
 
 Cost of production is an individual matter and varies v/idely from farm to 
 farm and year to year. With any probable price of potatoes some growers vdll be 
 able to make a profit and others will suffer a loss because of variations in their 
 cost of production. But the cost of production of a sack of potatoes does not 
 entirely determine the profitableness of the enterprise, since there is considerable 
 variation in the average price for the season obtained by different growers. The 
 price an individual receives is influenced by the quality of the product and the 
 time and channel of sale as well as the general level of potato prices for the 
 season. The object of the grower is to secure the greatest net return per acre of 
 potatoes planted. This is accomplished by the most favorable relationship of the 
 yield per acre, the average price per hundredweight, and the total cost per acre. 
 Yield times price determines the income and income less cost determines the profit. 
 Because of the time at which this survey v;as made, a study of prices and income 
 had to be omitted so in this particular report, the economy of production of a sack 
 of potatoes is taken as the best single measure of the efficiency of each individual 
 enterprise. 
 
 >^ Extension Specialist in Farm Management, Agricultural Extension Service, and 
 Associate in the Giannini Foundation, 
 
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Table 2, Labor Costs in Detail, 1933 
 
 
 Per Cent 
 Reporting 
 Operation 
 
 Cost 
 per 
 Acre 
 
 Cost 
 per 
 Cwt, 
 
 Preparing soil and planting cover crop 
 
 Irrigating cover crop or irrigating before planting 
 
 Applying barnyard manure, labor only 
 
 Plowing - once only, 82%; twice, 1Q% 
 
 Other tillage before planting 
 
 18% 
 36% 
 36% 
 all 
 all 
 
 .56 
 
 .84 
 1,96 
 2.56 
 2,02 
 
 
 Average total preparation for planting 
 
 all 
 
 5*52 
 
 
 Dipping seed, including material, average 8j^ per sack 
 Planting 
 
 Furrowing and cultivation 
 
 Hoeing 
 
 Irrigation 
 
 all 
 all 
 all 
 all 
 9% 
 all 
 1852 
 
 1.05 
 1.20 
 1.91 
 2.10 
 
 1.50 
 4.37 
 1«90 
 
 
 Average total cultural labor up to harvesting 
 
 all 
 
 16,44 
 
 ,06 
 
 Digging 
 
 Picking including supervision where furnished 
 Hauling and loading on cars 
 
 all 
 all 
 all 
 
 3.59 
 20.03 
 11.12 
 
 .01 
 
 ^07 
 .04 
 
 Avera/2:e total labor cost per acre 
 
 all 
 
 51.18 
 
 ,18 
 
 The above table shows the average labor cost for each operation where that 
 operation is reported. Since not all operations were performed on each planting, 
 the average totals shown are less than a sum of the separate operations* 
 
 The above labor costs are composed of the value of the operator's labor at 
 going wage rates, the cost of hired labor, and the cost or value of horse, tractor, 
 and truck work. For each operation the method used and the hours of man labor and 
 field power were first secured. The rate per hour actually paid was then applied 
 to compute the value of the man labor whether hired or performed by the farmer him- 
 self. Wage rates used for various operations varied from 20 to 40 cents an hour, 
 25 cents being about average. Dipping cost, which includes material, varied from 
 3^ to 15 cents a sack. Cutting averaged about 9 cents a sack with from 11 to 15 
 sacks per acre being used. 
 
 Tractor work was charged at a rate sufficient to cover operating, maintenance, 
 and overhead costs. The rate for each tractor was decided by the interviev/er and 
 operator after taking into account the make, size, cost, annual hours of. use, and a 
 schedule of average tractor operating costs. The rates varied from 70 cents to 
 |2.00 an hour. The hourly rate for horse labor was 10 cents an hour (20 cents for 
 a two-horse team) which seemed to fit computed costs in all cases. A rate for truck 
 work was determined as for tractor work, although most of the hauling was hired on 
 a contract basis. 
 
 -3- 
 
Table 3. Material Costs in 1933 
 
 
 Pf^r Csnt 
 
 Cost 
 
 Cost 
 
 
 RpnnTtlmy 
 
 per 
 
 per 
 
 
 Acre 
 
 Cwt, 
 
 Cover crop seed, where used 
 
 18% 
 
 .55 
 
 
 rjarnyaro. manure i average use o xoacts per acre 
 
 
 7 14 
 
 
 Power for pumping irrigation water 
 
 all 
 
 9.21 
 
 
 Seed, average 13 sacks per acre at $1,59 
 
 all 
 
 20.65 
 
 
 Sacks and twine, average 285 at 6.8j2^ 
 
 all 
 
 19.48 
 
 .07 
 
 Fertilizer, ammonium sulfate, av. at 1.44 cwt. 
 
 all 
 
 6.41 
 
 
 Average total material cost 
 
 
 57.95 
 
 ,20 
 
 The average cost of material v/here the use of that material took place is 
 shown in tatle 3, All plantings had expenditures for all the materials shown except 
 cover crop seed and manure. Where "barnyard manure was used there was slightly less 
 ammonium sulfate applied but in general the use of manure is additional to the regu- 
 lar application of commercial fertilizer rather than in place of it. The quantities 
 used, as well as unit prices, are shown above for everything except irrigation water. 
 The power cost for pumping was generally based on the season's average power cost 
 per acre for the pumping plant used, although in some cases potatoes might have re- 
 ceived more water than other crops such as cotton. 
 
 Table 4, Cash Overhead Costs 
 
 
 Per Cent 
 Reporting 
 
 Cost 
 
 per 
 
 Acre 
 
 Cost 
 
 per 
 
 Cwt, 
 
 General expense 
 
 all 
 
 5.46 
 
 
 County taxes, as paid by owners 
 
 44% 
 
 2.80 
 
 
 County taxes, as paid by renters 
 
 56% 
 
 ,26 
 
 
 Machinery repairs 
 
 91% 
 
 2.38 
 
 
 Compensation insurance 
 
 64% 
 
 .50 
 
 
 Rent, where land was rented 
 
 56% 
 
 24,93 
 
 
 Average total cash overhead costs 
 
 all 
 
 23.72 
 
 .08 
 
 Table 4 shows cash overhead costs in potato growing. The first item, general 
 expense, is computed at 5% of the total labor and material costs previously shown 
 and is included to cover miscellaneous small overhead costs. Among such costs 
 should be office expense, the use of the operator's personal automobile for the 
 potato enterprise, interest on operating capital, and, in case of larger enterprises, 
 some management expenses. Actual records have shown that 5% will about cover such 
 costs in the majority of such cases. 
 
 In these enterprises those renting land furnish all their own equipment even 
 to irrigation facilities so have taxes on equipment to pay as v/ell as rent and also 
 have considerable depreciation and interest on their investment. Those owning their 
 land have about |2.50 an acre more taxes and about |14 more interest on investment in 
 place of the |25 rent per acre, thus indicating it is cheaper to own land than to 
 rent it. 
 
 -4- 
 
Digitized by the Internet Archive 
 
 in 2014 
 
 https://archive.org/details/surveyofcostofpr32shul 
 
Table 5, Investment, Depreciation, and Interest on Investment per Acre 
 
 
 
 
 
 Interest 
 
 
 Original 
 
 Average 
 
 Deprecia- 
 
 on 
 
 
 Cost 
 
 Investment 
 
 tion 
 
 Tnvp e^'t'.Tnpn't 
 
 Duxj-CLxngs lor nousxng, iisxp, ecj^uxpiuenb, ott-* 
 
 
 6 45 
 
 . 53 
 
 ,38 
 
 Irrigation system, well, pipe* pumps, etc. 
 
 55,16 
 
 27, 58 
 
 3. o9 
 
 1, OD 
 
 Tillage equipment 
 
 4.68 
 
 S « 3^ 
 
 . 54 
 
 . 14 
 
 Planting and dipping equipment 
 
 5.74 
 
 2«87 
 
 .57 
 
 .17 
 
 Digging equipment 
 
 4.32 
 
 2.16 
 
 .62 
 
 o 13 
 
 Miscellaneous small tools and eauipment 
 
 1.08 
 
 .54 
 
 • 14 
 
 ,03 
 
 Sub-to tal 
 
 83.88 
 
 41.94 
 
 5.99 
 
 2.50 
 
 Land, where owned 
 
 400.00 
 
 230.00 
 
 
 13.80 
 
 Sub- to tal 
 
 483.88 
 
 271.94 
 
 5.99 
 
 16,30 
 
 Tractors, trucks, horses, and harness 
 
 7.28 
 
 3,64 
 
 2,38 
 
 ,22 
 
 Grand total 
 
 491.16 
 
 275.58 
 
 8.37 
 
 16,52 
 
 Table 5 is a summarization of the interest and depreciation involved in the 
 nine out of eleven records covered by this report upon which complete inventories 
 were secured. These figures are group summaries of many individual items upon which 
 the per acre investments and depreciation were figured separately. The average in- 
 vestment for all equipment and improvements upon which depreciation is charged was 
 taken as half of the reported original cost because over the life of each facility, 
 its value declines from cost to nothing. Depreciation is that part of a capital 
 outlay which is used up by or is chargeable to one year's business. It is as much 
 a cash cost as any material cost although such outlays are generally made years in 
 advance and reoccur only when facilities must be replaced. Interest on the average 
 investment shown was computed at 6% and is included as the cost of invested capital 
 part of which may be the operator's and part of which may be borrowed. 
 
 Table 6. Recapitulation of All Costs for 1933 
 
 
 Cost 
 
 Cost 
 
 
 per 
 
 per 
 
 
 Acre 
 
 Cwt. 
 
 Cultural labor 
 
 16.44 
 
 .06 
 
 Digging 
 
 3.59 
 
 .01 
 
 Picking and sewing sacks, including supervision 
 
 20.03 
 
 .07 
 
 Haulins and loading 
 
 11.12 
 
 .04 
 
 Total labor 
 
 51.18 
 
 .18 
 
 Total material 
 
 57 . 95 
 
 .20 
 
 Cash overhead cost 
 
 23.72 
 
 .08 
 
 Total cash costs 
 
 13^,65 
 
 ,4^ 
 
 Depreciation 
 
 5.28 
 
 .02 
 
 Sub- to tal - cash and depreciation 
 
 138.13 
 
 ,48 
 
 Interest on investment 
 
 9.20 
 
 .03 
 
 Total all costs 
 
 147.33 
 
 .51 
 
 Total all costs up to harvesting 
 
 93,11 
 
 .32 
 
 Digging 
 
 3,59 
 
 .01 
 
 Picking and sewing sacks 
 
 20,03 
 
 .07 
 
 Hauling 
 
 11.12 
 
 .04 
 
 Sacks and twine 
 
 19.48 
 
 .07 
 
 Total all costs 
 
 147.33 
 
 .51 
 
 The above table shows an average of costs in eleven potato enterprises for 
 
 1933, 
 
I 
 
PART II 
 
 AN ESTIMATE OF COSTS FOR X934 
 
 The year 1933 was a season during v/hich costs involved in 
 the growing of potatoes were lower than normal or usual. Wage rates, 
 fertilizer, seed, and sacks were all lower than those prevailing in 
 1934. There was expressed hy many of the growers a desire for a set 
 of costs based upon costs and prevailing conditions in 1934, Such a 
 set of costs is presented in table 7, It is not yet known what the 
 yields will bo so this table was based on 200 sacks per acre which 
 is close to the average for the district the last few years. Table 
 8, however, shows the variations in cost per acre and per hundred- 
 weight with varying yields. 
 
 The labor and materials used in computing the cost estimate 
 in table 7 are the same as shown by the 1933 records except where 
 changes had to be made to suit the estimate to a single unified 
 management system. In 1933 there was enough rainfall before plow- 
 ing so that little or no pre-planting irrigation was required. It 
 must be provided in 1934. Some of the growers used cover crops ajid 
 barnyard manure in 1933 and some have in 1934, but the estimate 
 omits all items not usually involved. Tractors used varied in size 
 and type. The tractor work rates and costs for the 1934 estimates 
 are those appearing with greatest frequency in 1933; namely, the 
 15 drawbar horsepower wheel tractor used about 800 hours a year on 
 about 100 acres, which would result in a total operation and over- 
 head cost of 90j^ an hour. 
 
 In many cases the wage rates being paid and estimated for 
 the balance of 1934 are higher than in 1933, so 30^ an hour was 
 used for tractor driving and 25^ for the balance of the labor, 
 with slightly higher contract rates for cutting, picking, hauling, 
 and loading than prevailed in 1933* 
 
 Table 7 shows with a 200- sack yield that about 120 hours 
 of man labor are involved in the production and harvesting of an 
 acre of potatoes. The cultural labor and digging would be very 
 little more if the yield were much greater although the picking 
 and hauling would increase with the yield. To show variations in 
 costs and labor requirements for varying yields, table 8 has been 
 prepared. It is based on the costs shown in table 7, except for 
 differences in harvesting and sack costs and in general expense. 
 
 -6 
 
Table 7. An Estimate of Costs for 1934 Conditions. 
 
 LaDor Costs 
 
 Hours per Acre* 
 
 Total 
 
 Cost 
 
 
 
 
 
 Cost 
 
 per 
 
 
 Man 
 
 Horse 
 
 tor 
 
 Truck 
 
 per AQr§ 
 
 Cwt. 
 
 Disk after previous crop or before plowing 
 
 .5 
 
 
 .5 
 
 
 .60 
 
 .003 
 
 Irrigate before plowing 
 
 4.0 
 
 
 
 
 1.00 
 
 .005 
 
 Plov/ 
 
 2.0 
 
 
 2.0 
 
 
 2.40 
 
 .012 
 
 Disk, harrow, and float 
 
 2.0 
 
 
 2.0 
 
 
 2,40 
 
 ,012 
 
 Total land preparation 
 
 8,5 
 
 
 4.5 
 
 
 
 «0^<J 
 
 Dipping - labor only 
 
 3.0 
 
 
 
 
 • lO 
 
 C\C\A. 
 
 Cutting - + 1^ supervision 13 sacks 
 
 5.0 
 
 
 
 
 
 . UUo 
 
 Hauling seed and fertilizer 
 
 1.0 
 
 2 
 
 
 
 , to 
 
 « UU<& 
 
 Planting seed and fertilizer 
 
 3.0 
 
 
 1.5 
 
 
 
 • 0x1 
 
 Furrow twice with cultivator 
 
 4.0 
 
 8 
 
 
 
 1. ou 
 
 
 ouixivai'e once 
 
 2.0 
 
 4 
 
 
 
 
 -005 
 
 irr igaT<e 
 
 18.0 
 
 
 
 
 4. 50 
 
 .023 
 
 ioxai cuixurai iaoor 
 
 44.5 
 
 14 
 
 6.0 
 
 
 
 
 Digging 
 
 6.0 
 
 
 2.5 
 
 
 4,05 
 
 .020 
 
 Picking 8p a sack and supervision a sack 
 
 55.0 
 
 
 
 
 17o00 
 
 ,085 
 
 Sewing sacks at 1^ a sack 
 
 4.0 
 
 
 
 
 2«00 
 
 .010 
 
 Hauling 10 tons at 75j^ 
 
 7.5 
 
 
 
 2.5 
 
 7.50 
 
 .038 
 
 Loading on cars 
 
 4.5 
 
 
 
 
 
 • uXX 
 
 
 
 
 
 
 1. 50 
 
 .007 
 
 ioxai narvesxms xaDor 
 
 77.0 
 
 
 2,5 
 
 2.5 
 
 
 .171 
 
 ioxai lauor cosx per acre 
 
 121.5 
 
 14 
 
 8,5 
 
 2.5 
 
 
 . 263 
 
 Maxeriai uosxs 
 
 Quantity 
 
 Unit 
 
 Price 
 
 
 
 irrigation power lor pumping 
 
 
 
 
 
 1 n no 
 
 050 
 
 # Www 
 
 oeeo. poxaxoes 
 
 13 sacks 
 
 $2* 25 
 
 29. 25 
 
 .146 
 
 
 
 
 .025 
 
 .33 
 
 .002 
 
 Fprtilizer. ^37.50 Der ton 
 
 500 
 
 lbs. 
 
 1. 
 
 875 
 
 9.38 
 
 .047 
 
 Sacks and twine 
 
 200 
 
 
 .11 
 
 22.00 
 
 .110 
 
 Total material cost 
 
 
 
 70.96 
 
 .355 
 
 Cash Overhead Cost 
 
 
 
 
 
 
 
 General expense, S% of labor and material (| 
 
 5123.61) 
 
 
 
 6.18 
 
 .031 
 
 County taxes on land, equipment, and improvements 
 
 
 
 2.00 
 
 .010 
 
 Machinery repairs 
 
 
 
 
 
 2.50 
 
 .012 
 
 Compensation insurance 
 
 
 
 
 
 .75 
 
 .004 
 
 Total cash overhead cost 
 
 11,43 
 
 .057 
 
 Total depreciation (based on Table 5) 
 
 6.00 
 
 .030 
 
 Sub-total all cash costs and depreciation 
 
 
 
 
 141,04 
 
 .705 
 
 Interest on investment, improvements, and equipment 
 
 
 
 2,50 
 
 .012 
 
 Interest on value of land ($230 an acre) 
 
 
 
 
 
 13.80 
 
 .069 
 
 Total all costs 
 
 157.34 
 
 .786 
 
 The above table presents an estimate of costs of producing potatoes in 1934. 
 This table is based upon the 1933 records insofar as possible as well as upon actual 
 1934 cost records for the early part of the 1934 season and estimates of growers 
 given the author of this report. 
 
 * Labor costs are based upon wages of man labor for tractor operation at 30 cents 
 an hour, other labor at 25 cents, horse labor at 10 cents a horse hour, and tractor 
 work at 90 cents an hour for a 15 drav/bar horsepower wheel tractor. Estimates of 
 costs of piece work and contract operations are shown in the table. 
 
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