The Farming Business


AGRICULTURE is a mode of living, a business, or something for the politicians to talk about. If farming is to be regarded purely as a mode of living, it then becomes strictly an individual problem and the individual has a perfect right to choose that form of existence if he cares to, and there is no real farm problem as it affects the public welfare in this country. If farming is a business which is in distress, it is a matter which vitally concerns us all, since there are ten million people gainfully employed in farming and twentyeight million who are dependent on agriculture for their livelihood. Anything which reduces the purchasing power of this vast group vitally affects the prosperity of the entire country, since they normally consume large quantities of manufactured goods. Farming as a business is subject to the same economic laws as other types of business. If agriculture is sick it ought to be possible to determine what ails it and apply the necessary remedies.

In the early days of our national life farming was purely a mode of living. The farm produced all of the requirements of the farmer and his family in the form of food, shelter, clothing, and fuel. The industrial revolution of the past two hundred years, however, has created new conditions the like of which have never existed before. The industrial revolution was made possible because of the development of modern machinery whereby the manufacture of goods has been taken from the home of the farmer and artisan and concentrated in the city. The growth of the modern factory and the marked development in modern methods of transportation have permitted concentration of consumers of food products in large centres of population. The modern city is the result of this development and has had a marked influence upon farming conditions by offering a market for farm products.

As a result, farming has slowly evolved from a mode of living into a business proposition. It is no longer a self-sufficing unit. The farm supplies the farmer with some of his necessities, but many are purchased from outside sources. The farmer is, therefore, interested in markets, methods of transportation, interest rates, taxes, and the tariff as they affect his business. It is now a manufacturing industry in which the farmer uses raw materials from the soil and air and converts them into finished food products. In the evolution of farming from a mode of living to a business proposition, farming has also been markedly influenced by the growth and use of farm machinery. There has been greater development in the use of power machinery on the farm during the past fifty years than in all the previous history of the world. Farming as a business, however, still labors under serious handicaps. It is just now having severe growing pains. The farming industry lacks dignity in the eyes of most people. To many people the farmer is still a ‘hick’ and a ‘hayseed,’ as the cartoonist often depicts him. The banker looks askance upon requests for farm loans, as he is not sure of the stability of this investment. The banker feels that the risk is great, and consequently farm loans bear a high rate of interest. Farming is regarded as a gamble with very uncertain returns. Capital for the farm business is not available in such quantities and at such rates as it is available for almost every other type of industrial endeavor. The sale of share stock in farming enterprises is practically unknown. Without this device for raising capital in other industrial operations, they also would have been seriously handicapped and their growth retarded. The great growth of the Bell Telephone Company, the United States Steel Corporation, the Pennsylvania Railroad System, or any other industrial organization that might be mentioned, has been dependent upon the raising of large-volume capital in this manner by the sale of common and preferred stock and the issue of bonds. Owing to the lack of dignity, the great risk assumed to be present in the farm business, and the lack of management in farming enterprises, capital in this form for the growth and development of the farming industry is practically unknown. Farming is largely, therefore, a one-man affair where the individual farmer labors under serious handicap; while he is an excellent laborer himself, he frequently lacks capital and frequently is not a good manager.

A high executive in the General Motors Corporation recently said that efficient management was the rarest and most difficult form of labor to secure. It is therefore unreasonable to expect that the majority of the six and one-half million farmers in the United States are in possession of this rare attribute so necessary for success in any business proposition. Working under the direction of another or in someother occupation, they might be highly successful, but as managers of a business proposition they are woefully lacking.

Food is one of our most essential requirements. Its production affects the welfare of every single individual in the country. It is of vital importance to all that the production of this commodity be placed upon as stable and sound a basis as other industrial pursuits. There is no greater risk for capital invested in the farm under able management than there is in any other wellorganized business. There is just as great an opportunity for good returns for capital invested in this type of business if that investment is placed under as careful a management as it would be, for example, were it to be invested in the production of automobiles. Whenever, and as soon as, this fact is recognized by the financial interests of the country, there will become possible a real solution of the farm problem that now confronts us, and its solution will not be of a political nature at all, but will be found on a purely business basis.


Instances are abundant throughout the country of successful farming enterprises being carried on as business propositions. One such instance is that of the Campbell Farming Corporation in Montana.

When the United States entered the Great War in April 1917, Thomas B. Campbell, a graduate mechanical engineer, offered his services to his country. Secretary Lane of the Interior Department, knowing Campbell and recognizing his ability as a mechanical engineer, suggested to him that he could best serve his country and the cause of the Allies by using his mechanical ability in helping to increase the food supply for the Allied armies.

Campbell’s imagination was fired by the suggestion and it was at first thought desirable that the farming operations be established in northern Africa, in Algiers, but the difficulty of transporting farm machinery through the danger zone to that country was finally recognized as being so great as to prohibit the undertaking. Secretary Lane then suggested that Campbell endeavor to develop and use the unused land on the Indian reservations in the far West. A modest beginning was made on the Crow Indian Reservation in Montana in accordance with this suggestion. At first seven thousand acres were planted to wheat, and Campbell in various ways raised a million dollars in capital to finance the undertaking. During the war period he was successful in producing much wheat which contributed in a measure to the success of the Allied forces.

After the close of the war, Campbell was so interested in the proposition of wheat production as a business matter that he took over the holdings and formed the Campbell Farming Corporation. This corporation now farms ninety-five thousand acres of land, largely in Montana, with some small holdings in North Dakota and California. The corporation owns and operates one hundred and nine tractors, which develop five thousand horsepower and are capable of ploughing one thousand acres of land per day. Not a horse or a mule is present on this vast holding. A few chickens and pigs are found on the farm, but they are used purely as a means of producing eggs and pork for home consumption. They are regarded as a nuisance rather than a vital part of the equipment.

The Campbell Corporation owns one hundred planting machines capable of planting three thousand acres a day. It has eighty binders capable of cutting from fifteen hundred to two thousand acres per day. It has six combined harvesters which cut, thresh, and sack three hundred acres per day. The corporation also owns eleven threshing machines capable of threshing twenty thousand bushels of wheat a day. It owns and operates big fleets of cars and trucks for use in transportation of commodities to and from the farm. It has fireproof steel storage bins for holding the wheat until such time as it can be disposed of at the elevator or shipped to other points of consumption. It is reported that in 1927 the Campbell Corporation threshed a million bushels of wheat.

Twenty per cent of the stock of the Campbell Corporation has been distributed as a bonus to the skilled labor upon the farm. While the average farm laborer commands three dollars a day, the Campbell Corporation pays a minimum wage of six dollars a day with a bonus. This bonus consists of ten cents a mile for every mile which the worker’s machine travels per day. This makes the average wage paid by the corporation about eight dollars a day.

The Campbell Corporation is producing wheat in exactly the same manner that other large industrial corporations are producing other types of commodities and with equal success. It has now been a going concern for ten years, meeting with a larger measure of success each year.

When an inquirer expressed astonishment at the high wages Campbell was paying his farm laborers and suggested that in the event of a marked decline in the price of wheat Campbell would be forced to make a serious cut in wages, Campbell made a characteristic reply. ‘No,’he said, ‘we will raise wages and cut our operation costs.’ Thomas Campbell is a real captain of the farming industry.


The possibilities in farming, when it is conducted along the lines of a real business enterprise, are clearly demonstrated by the actual experience of two small farmers in a good farming section of Indiana. They arc neighbors, their farms being separated only by a fence. The soil is identical and their opportunity should be the same. They owned the same-size farms, eighty acres, had the same soil, rainfall, market prices, and other conditions. They differ only in their managerial ability. Yet at the end of the year one man, Earl Foster, found that his farm had paid him $1676, while the other, John Peterson, found that he was in debt $198! The difference in the returns of these two small farms, $1874, was due entirely to the exercise of good business management on the part of Foster, just as the success in any type of business enterprise is largely due to efficient management. When the records of the two farms were studied it was found that the same general type of farming was followed on both. Each had about the usual amount of live stock. Crop yields were about the same. The farms differed largely in the methods of feeding the live stock.

Foster’s live stock paid him $2.12 for each dollar’s worth of feed, while Peterson’s stock returned only $1.02 for each dollar’s worth of feed consumed. Peterson would have been better off had he sold his crops and not attempted to feed live stock. The two cents above the value of the feed did not go very far toward paying costs in connection with the live stock, such as labor, shelter, taxes, interest, and veterinary services. It would have been necessary for Peterson to receive at least $1.30 for every dollar’s worth of feed he fed his live stock to break even and, as he got only $1.02, he lost money. Foster, however, got $2.12 for each dollar’s worth of feed his stock consumed, so he made money on his business. Foster was enabled to do this simply because he used a balanced ration well supplied with protein. He used soy beans, tankage, and linseed meal as supplementary feed. Peterson did not use either one or the other.

By the exercise of good management Foster made money on his farm in 1924, while Peterson lost money because of lack of management and a desire to skimp along on what the farm produced alone as feed. The businesslike records kept for these farmers by aid of the Extension Service enabled them to detect the leaks in the farming enterprise, just as similar cost accounts in any other line of business enable the successful manager to detect leaks. There is not much of a farm problem for Foster, but I have no doubt that Peterson thinks there is something vitally wrong with things in general.

Perhaps seventy-five per cent of the farms of North Dakota are in favor of some form of government farm relief to get them out of their difficulties, and most of the local banks in North Dakota are in difficulty because they cannot realize on the commercial paper taken from these farmers.

John W. Scott of Gilby, North Dakota, however, is not concerned with the various proposals for farm relief. He owns nine hundred acres in the Red River Valley of North Dakota. While eleven bushels per acre is a good average yield of wheat for his neighborhood, Scott’s fields average twenty-one bushels per acre. Every year during the past seven years of agricultural distress, except one year when hail destroyed his crop, Scott has made good money in farming. In 1922, a most trying year for the farmers of the wheat belt, Scott made a good profit. In 1923 the total income from his farm was $6000. How does he do it?

He has a diversified farm, which includes live stock. Live stock in the wheat belt! Each year he has wool, barley, potatoes, live stock, and cream to sell. He keeps up the fertility of his soil by the abundant use of manure and also by ploughing under legumes and all crop residues. By the use of legumes, rotations, and live stock he has been able to make good money, while his neighbors, who have adhered to a onecrop system of farming, have been in serious distress and have been loud in their demands for farm relief.

Scott, has two well-defined systems of crop rotation. One runs for six years and consists of wheat, oats or barley, clover for pasture, and corn. The second rotation consists of clover or alfalfa, two crops of wheat, flax or other grain, and finally potatoes. The alfalfa is cut for hay, the clover is pastured, and the corn used for silage so as to have green succulent feed for his live stock during the winter.

He buys five hundred Western ewes each year from which he raises and feeds two carloads of lambs. The sheep furnish him two cash crops — wool and mutton. He clips his sheep once a year and ships direct to the woolen mills at top prices. He also ships his own potatoes, barley, wheat, and live stock. A surplus of the commodities does not concern him at all, as his individual cost of production is much lower than that of his neighbors because of his high yields, due to his efficient farm management.


Frank I. Mann has been farming in Illinois for nearly a half century. Mann is a college graduate, majoring in Greek. While at college he was on the staff of the college paper. Newspaper work became his first love, and after graduation he and his brother, Jim Mann of Congressional fame, started a weekly newspaper at Chenoa, Illinois. At the end of a year they were so badly in debt that Jim quit the newspaper and went to Chicago to study law and later became one of the outstanding leaders of Congress. Frank sold out his interest in the newspaper business and went back home, where he bought his father’s five-hundred-acre farm, Bois D’Arc, near Gilman, Illinois. The farm was badly in need of drainage and soil improvement, and as a result was not producing good crops.

Frank drained the farm the first year he owned it and planned a definite system of rotation, including clover, corn, wheat, and oats. Like Scott in North Dakota, Mann was a firm believer in the value of clover as a means of building up the productive capacity of his soil. He used it both for live-stock feed and as green manure for his soil.

During the first few years of life on the farm, Mann had a large number of live stock, including colts, hogs, and cows. At one time he had the second largest herd of pure-bred Holsteins in the State of Illinois. But when the price of pure-breds became so low that there was not much difference between them and grades, Mann sold out his herds. Since then he has had only a few cows, horses, and hogs and has produced wheat, oats, and corn for the market.

He follows a definite system of crop rotation, including corn, oats, wheat, and clover hay. He makes a liberal use of limestone and raw rock phosphate for improving the productive capacity of his soil. He constantly plans to return to the soil more plant food than his crops remove from the soil each year; he does this at a low cost of $2.50 per acre per year, and has more than doubled the crop yields of his farm. His average yields are fifty bushels of wheat per acre, seventy-five to eighty bushels of corn, eighty-five bushels of oats, and five to six tons of clover hay! His wheat yields have been increased from twenty-one bushels to fifty-four bushels per acre and the increased yield has cost him only seven and one-half cents per bushel!

A recent government survey in the wheat belt of Kansas, North and South Dakota, showed that it cost farmers of that district from $.85 to $8.40 per bushel to produce wheat. The reason for the high cost was the low yield of wheat per acre. How can the farmer in North Dakota who produces wheat with an average yield of eleven bushels per acre hope to compete with Frank I. Mann in Illinois who produces wheat with a yield of fifty-four bushels per acre?

Mann’s method of soil improvement is very simple. He has a definite rotation of corn, oats, wheat, and clover. He spreads from two to three tons of finely ground limestone over his entire field, leaving a check strip untreated so as to obtain information as to the effect of the treatment. One ton of finely ground rock phosphate is applied every four years to the treated soil. In addition he ploughs under clover and all crop residues. This simple treatment is his whole system.

During the first four years of experiment the untreated soil gave a yield of twenty-six bushels of wheat per acre, while the treated soil yielded thirty-four bushels of wheat per acre. During the second rotation period the check strip yielded twenty-five bushels per acre, while the treated soil gave a yield of forty-two bushels per acre. After the third application of the soil treatment the yield of wheat went to forty-eight bushels per acre, while the untreated soil yielded only twenty-one bushels. The treated soil is rapidly increasing in productivity, while the untreated soil is slowly decreasing in productivity and is approaching the normal yields obtained by a majority of the wheat growers of North Dakota.

One year his treated soil gave a yield of sixty-three bushels of wheat, for which he received a gold medal for producing the highest yield of wheat per acre ever recorded in Illinois.

He has also produced a yield of oats of one hundred and fifteen bushels per acre and of corn one hundred and six bushels per acre. The average yield of corn, oats, and wheat in Illinois is as follows: corn, thirty-four bushels per acre; oats, twenty-six and five tenths; wheat, eighteen bushels per acre.

The world’s average yield of wheat is ten and one-half bushels. Wheat will never sell high enough so that the farmer who produces only the worldaverage yield of wheat can make a profit. No agency on earth can do anything for such a farmer. He must do as John Scott in North Dakota or Frank Mann has done. He must plan a definite system of economic soil improvement whereby the yield of his crop must be increased so that a profitable return may be obtained. Frank I. Mann is an efficient farm manager; he is another real captain of the new farming industry.

Arthur J. Mason is another Illinois farmer who is making good money at farming by reduction of production costs on his farm at Flossmoor, Illinois. Mason also is a university graduate, his major being mechanical engineering. His method of approaching the problems of the farm was somewhat different from that of Mann. Like Mann, however, he believed thoroughly in improving the productive capacity of the soil. He does all that Mann does to increase the productivity capacity of his soil, but goes further in reducing production cost by the use of new and better farm equipment.

He believes also that clean cultivation of the soil, as practised in corn cutting, is wasteful of the soil, as the loss of the soil by erosion is too great. He prefers growing sod-producing crops such as alfalfa. He has solved the problem of successfully growing alfalfa in the humid regions by the perfection and development of special machinery and methods for harvesting alfalfa hay, whereby the costs of production are materially reduced and the element of human labor largely eliminated. He produces alfalfa on six hundred acres of land and he obtains from two thousand to three thousand tons of alfalfa hay per year. His average yield is about four and two tenths tons per acre. The average yield of alfalfa hay in Illinois is two and seventy-one hundredths tons per acre. Mason produces hay fifty-five per cent above the average of his neighborhood.

Mr. Mason does not follow the traditional method of harvesting hay. He has designed entirely new machinery for harvesting his hay crop. The special type of mower has an elevator attached which delivers the green cut alfalfa to trucks which accompany the mower. The green alfalfa is taken at once to a dryer, where it is dried by artificially heated gases, being mechanically unloaded on to a moving belt which transports the green material contrariwise to the current of hot gases produced from burning coal. Fortyfive minutes after the alfalfa is cut, it is dry, finished alfalfa meal, of very superior quality. It is very high protein, making it a high-quality stock feed which commands top prices in the markets of the country.

The cost of installing such a plant as Mr. Mason has devised for producing alfalfa meal is approximately $21,000, under Illinois conditions, for a sixhundred-acre alfalfa field. The cost of operating such a plant, including labor, coal, power, land rental, and maintenance, is $22,250 annually. With an annual average yield of hay of twentyfive hundred tons, the production cost is only nine dollars per ton. Alfalfa meal of this type finds a ready market on the Atlantic seaboard at thirtyeight dollars per ton. Even when the cost of marketing and transportation to the seaboard has been deducted from the sum, there is a good profit left for the producer.

Of course such a method of producing hay is not adapted to the traditional small farm in America. It requires at least six hundred acres. But money can be made in such an operation, and when this opportunity in the farming industry is fully realized capital will be attracted and become available for such farming just as it is available in other types of business operations.

In fact this process has been adopted by the Walker-Gordon Milk Farms of Plainsboro, New Jersey, which supply New York City and northern New Jersey points with high-grade certified milk. They have a sixteen-hundredcow dairy farm and require large amounts of concentrated feed. They formerly imported alfalfa hay from the West, but now produce it all on their own farms by the Mason process. Arthur J. Mason is a real pioneer in the new agriculture which is slowly evolving out of the present slough of depression.


Out in California an interesting plan has been perfected for making capital available for agricultural production under efficient management. Twentyeight professional men of San Francisco, Berkeley, and Reno who are interested in farming have banded themselves into an association for the production of olives. Each member of the association owns his own tract of land and may treat or sell just as he pleases. Their holdings are adjacent and the owners are associated to reduce the expense of cultivation, irrigation, and general care. The whole tract is operated as a single orchard under one management.

The Berkeley Olive Association thus controls five hundred and two acres of olives. The members of the association are by this means enabled to secure efficient management for their tracts and to have them cared for more economically than would otherwise be possible. In fact, it would be impossible for them to handle their individual tracts in any other manner. Assessments for the normal care of the orchards, such as irrigation, cultivation, and pruning, are made on an acre basis, distributed throughout the year, and are divided into twelve payments of two dollars and fifty cents per acre per month.

Out of these assessments the association has, during the fourteen years of its existence, constructed its own farm buildings, including a ranch house, barn, and machine sheds, and has also acquired teams, tractors, ploughs, cultivators, trucks, and other equipment necessary for the successful care of an orchard of this sort.

By such an arrangement the association has accomplished all of the objects ordinarily sought by industry in the issue of share stock. Capital is available for production and efficient management is obtained to direct the expenditure of the capital. The orchards of the Berkeley Olive Association are now valued at over one half million dollars. The association also processes and packs its finished product, the ripe olives, for the market. This is done by a subsidiary organization, the Wyandotte Canneries. Since this is a coöperative farm organization, it is enabled to take advantage of the provision of the Intermediate Credit Banking Acts, which provide for the loan of money to such groups on warehouse receipts at a low rate of interest. The successful effort of this group of men marks an important milepost in the development and growth of the new agriculture.


The few illustrations of successful farmers presented here are not isolated instances, but are typical of hundreds of thousands of similar successful farmers in every part of the United States. Farming is now a business enterprise, subject to the same economic laws that affect, other types of industry. When capital is available in sufficient quantity and able management can be obtained, the rewards in farming are comparable with those obtained in other, manufacturing lines. John Scott in North Dakota, who produces twice the yield of wheat obtained by his neighbors, and Frank Mann in Illinois, who also produces better than twice the yield of wheat produced by his neighbors, are not alarmed by the cry of surplus production.

They realize fully that we have produced a surplus of wheat every year during our national life, except in 1836. During all this time the farmer who produced wheat efficiently at a low production cost always made money. The bugaboo of surplus production has no terror for the efficient producer of farm products by good business methods.

With the increasing demands of a rapidly growing population, also, it will be only a few years until the surplus we now produce will be a thing of the past. A surplus of farm products is no more significant to the farming industry than is the surplus production in any other industry.

The efficient producer will become successful and make money, while the inefficient will fail and slowly disappear from the field of competition.