Agricultural Economics Series 9
MINIMUM OPEN LAND 
REQUIREMENTS
FOR
SPECIFIED FARM INCOMES
LIMESTONE VALLEY AREAS
ALABAMA
JUL
1t 'r,-
v,n h
AGRICULTURAL EXPERIMENT 
STATION
OF AUBURN UNIVERSITY
E. V. Smith, Director
Auburn, Alabama
In cooperation with
FARM PRODUCTION ECONOMICS 
DIVISION
ECONOMIC RESEARCH SERVICE
U. S. DEPARTMENT OF AGRICULTURE
May 1966
l't'
ti i, s '" ' 
?',

Acknowledgment
The study on which this publication is based is part of a Regional
Research Project S-42, "An Economic Appraisal of Farming Adjustment Oppor-
tunities in the Southern Region to Meet Changing 
Conditions." This
Regional Project is financed in part from Research and Marketing Act
funds. It is a cooperative effort of the Departments of Agricultural
Economics of the following State Agricultural Experiment Stations:
Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, North
Carolina, Oklahoma, South Carolina, Tennessee, Texas, and Virginia;
and the Farm Production Economics Division, Economic Research Service,
United States Department of Agriculture. Dr. John W. White, Vice-
president for Agriculture, University of Arkansas, is the administrative
advisor, and Dr. James H. White, University of Arkansas, is chairman
of the Regional Committee.
The Southern Farm Management Research Committee, sponsored by the
Farm Foundation and the Southern Agricultural Experiment Stations, was
helpful in the development of this Regional Project.
The overall purposes of this regional project are (1) to provide
guides to farmers when choosing among alternative production opportuni-
ties, especially as those opportunities are affected by changes in
prices and technology, and (2) to provide guides to persons engaged in
developing and administering public agricultural programs.
TABLE= OF CONTENTS
SUMMARY
INTRODUCTION
DESCRIPTION OF AREA
NETHOD OF ANALYSIS
BASIC ASSUMPTIONS .
Land
Capital.... . ..
Labor....
Enterprise Activities
Allotment -and Rotational
Prices.
Machinery........
Overhead Cost. ....
MINIMUM -OPEN LAND REQUIREM
Effect of Changing4. Land
Res trictions
TENTS
'Value
Effect of Changing Labor Price
Effect of Cotton Price and Allotment
Effect of: Increasing Income Target
ADJUSTMENT IN FARM NUMBERS
IPLICATIONS,;
LITERATURE CITED
APPENDICES......... ..
e 
"
Level
s-:~ts
",
31
ic
5
6
8
9
9
12
12
13
. .. . 14
14
.15
. , , 15
15
. .'. 16
. __ 
" S 
18
18
19
0'''0 0 22
.27
30
SUMMARY
The objectives of this study were to determine 
the minimum acreage
of open land that would be required 
for specified levels of labor and
management income under various price and allotment 
levels. It was also
planned to determine the level of adjustment 
that would be required in
the number of farms in the area if all farms 
were increased to a size
that would yield the specified incomes.
The area to which the study applies i i the Tennessee Valley 
of
Alabama plus irregular strips of valley and flood plain 
soils in several
other northeastern Alabama counties. The soils 
of the area are above
average in natural fertility and are capable of producing 
good crop
yields if improved management practices are used. Cotton 
is the major
cash crop.
The procedure for the study was: (1) to determine the open land
acreage in the area; (2) to develop enterprise 
budgets for various crops
and livestock activities; (3) to determine the minimum 
open land
requirement and the optimum enterprise organization 
for various price,
allotment, and enterprise considerations, 
for a $5,000-operator labor
and management return; (4) to determine as 
in objective 3 for selected
comparisons at a $7,000-return; and (5) to 
determine the reduction in
number of farms required if all farms were 
large enough to yield the
desired income level.
Crop budgets were developed for cotton, corn, 
oats, wheat, soybeans,
grain sorghum, alfalfa hay, and lespedeza hay. 
Livestock budgets were
developed for hogs, cow-calf, and steer feeding 
enterprises. Minimum
open land requirements for a $5,000-net return 
were determined with
2
(1) all the activities considered and (2) hogs and steers not considered.
With all activities considered, the minimum requirements were determined
for five land value levels, twelve cotton price and allotment combinations
and three labor prices. With hogs and steers not considered, the minimum
requirements were determined for four land value levels. Minimum require-
ments for a $7,000-income were determined with all activities considered
for two cotton prices, two cotton allotment levels and two land values.
The minimum open land required to yield a $5,000-return to operator
labor and management ranged from 85 acres to 175 acres. The 85 acres
were associated with the situation where all enterprises were considered
and no return to land was charged. The 175 acres were associated with
the situation where hogs and steers were not considered and the return
to land was based on a value of $400 per acre. For the base situation
(1963 level for all prices and allotments and all activities considered)
the minimum open land requirement to obtain the $5,000-income was 98.2
acres.
With all activities considered, increasing the land charge from no
interest to interest on a value of $400 per acre (double the current
value) increased the minimum requirement from 85 acres to 117 acres.
Since very little hired labor was required to operate this size farm,
doubling the wage rate only increased the minimum requirement by 2
acres. No cotton entered the optimum organization at prices of 20.8
and 26 cents per pound of lint. At 31.2 cents per pound, cotton was 
in
the optimum organization. With cotton in the organization, increasing
the allotment level or the price level decreased the minimum requirement
to obtain the income level.
For a $7,000-income, the minimum open land required for the base
situation was 130.3 acres, an increase of 32 acres over the requirement
for $5,000 for the same situation. Changing the cotton allotment level,
cotton price or land value appeared to have the same affect at the
$7,000-level as at the $5,000-level.
With all activities considered, enterprises in the optimum organi-
zations were oats, corn, cotton, beef cows, and hogs with cotton not
entering the organization at low cotton prices. When hogs were excluded
from consideration, alfalfa hay replaced the corn and hog enterprises.
Using a farm size distribution determined from 1959 Census of
Agriculture and other data, it was estimated that over 78 per cent of
the farms in the study area had fewer than the 85 acres of open land
which was the minimum required for any of the situations. For the
largest requirement determined (175 acres), over 92 per cent of the
farms in the area has fewer acres than the minimum required.
If all the land in the area were adjusted into farms of the 85-acre
size required to yield a $5,000-income, the minimum reduction in farm
numbers would be 13 per cent. However, if only those farms below 85
acres made adjustments and those above this size remain at their current
level, the minimum reduction in farm numbers would be 48 per cent. For
the 175-acre farm, the minimum reduction in farm numbers if all land
were adjusted into farms of this size would be 58 per cent. If only
those farms below 175 acres made adjustments, the minimum reduction
required would be 69 per cent.

MINIMUM OPEN LAND REQUIREMENTS FOR SPECIFIED FARM INCOMES,
LIMESTONE VALLEY AREAS, ALABAMA
P. Leo Strickland, Jr.* and Earl J. Partenheimer**
In studying farming adjustment alternatives, one consideration is
whether to farm or go into nonfarm employment. In a full employment
economy, there is competition for labor. The income to persons of a
given skill and training in nonfarm employment could be considered the
"opportunity cost" of farming. Thus with all things equal, a farmer
should desire a return to his labor equal to the wages paid for similar
labor in nonfarm employment. However, the farmer may have some compen-
sating benefits that would entice him to accept a lower return than
obtainable in nonfarm employment.
In making economic decisions along these lines, individual farmers
can use information about the quantities of open land and other resources
needed to yield a specified operator labor and management return. Like-
wise, farmers and farm leaders are interested in the effect such adjust-
ments in farm size and resource use could have on the number of farms
and farm people.
*Agricultural Economist, Farm Production Economics Division,
Economic Research Service, U. S. Department of Agriculture, formerly
stationed at Auburn University, Auburn, Alabama, now stationed at
Oklahoma State University, Stillwater, Oklahoma.
**Formerly Associate Professor, Department of Agricultural
Economics and Rural Sociology, Auburn University, Auburn, Alabama,
now Agricultural Economist, Farm Production Economics Division,
Economic Research Service, stationed at Pennsylvania State University,
University Park, Pennsylvania.
The purposes of the study upon which this report is based were:
(1) To determine the minimum open land requirements to obtain
a $5,000 return to operator's labor and management using advanced
technology and specified cotton price and allotment levels;
(2) To determine the minimum open land requirements to obtain a
$7,000-income for certain assumptions for comparison with the
$5,000 results;
(3) To determine the optimum combination of enterprises consistent
with the assumptions and minimum land requirements;
(4) To determine the amounts of other resources (labor and capital)
required by these enterprise organizations; and,
(5) To determine the number of farms currently below the minimum
size and the number of farms that could exist in the area if
these farms were reorganized into farms of the minimum size.
Description of the Area
The farming area designated in this study as the Limestone Valleys
consists of the Tennessee Valley Area plus irregular strips of valleys
and flood plains in several other northeastern Alabama counties, Figure
1. The soils of these areas are of limestone origin or have characteris-
tics similar to the limestone soils. They are above average in natural
fertility as compared to other soils in the State. The nearly level to
gently rolling topography of the Limestone Valley soils is quite adaptable
to mechanization. A large percentage of the land is open and cultivation
is intensive.
The area receives an annual rainfall ranging from 50 to 56 inches.
However, this rainfall is usually distributed so that it is relatively
dry in the late spring and early fall. The growing season for the area
ranged from 200 to 220 days ()o
iNumber in parenthesis refers to reference cited. See list at end
of this report.
Limes tone ValleysM
Fig. 1. Area of-study, Limestone Valleys
Cotton, the leading cash crop for the State, is also the most
important crop in the area. Forty-seven per cent of Alabama's cotton
production, or 2.2 per cent of the U. S. cotton production in 1962 was
produced in theLimestone Valleys. Other major crops in the area include
corn and hay crops.
Method of Analysis
Linear programming was used to determine the optimum combination
of enterprises that would require the least amount of open land to obtain
the $5,000-operator's labor and management return. The programming
technique also indicated the quantity of labor and capital which would
berequired to operate this combination of enterprises.
The decision to determine the minimum open land required to yield
the income was made because scarcity of open land is usually the most
limiting factor on small farms. Land is the major capital item on most
farms, therefore, the result when land is minimized would be almost the
same as would be obtained if capital were minimized. Also, land prices
are very-flexible. In land transactions, factors other than economic
value often play a role in determining the selling price. Minimizing the
land requirement places less pressure on determining an accurate land
price.
Census data on farm size distributions by acres of cropland 
harvested
and by total acres of land were used to determine a farm size distribution
by open land acreage. From these data, a cumulative distribution of open
land by percentage and size of farm was determined. This distribution
was used to determine the number of farms with fewer acres than the
minimum required to yield a specified income and the acreage of open
land on these farms. This open land acreage was divided by the acreage
required to produce the desired number of farms of the minimum size
which could be reorganized on this acreage. The difference between the
number of farms now in the area below the required size for the specified
income
-
and the number of the minimum size which could be reorganized on
this acreage is the adjustment gap in farm numbers required to raise all
farm operator's labor and management return to $5,000.
Basic Assumptions
Input-output budgets used in this study were based on improved
management practices, which assume the use of the best technology avail-
able and a high level of managerial ability. These budgets were developed
by modifying cost and return budgets previously published for the area
to meet thespecific assumptions of this study (3, 5). The assumed
yields represent the output that might be expected under the assumed
level of management practices and average weather conditions, Table 1.
Land
The acreages of land and their use capabilities as used in this
study were based on Soil Conservation Service Data (1). Only open land
from which crops or pasture could be harvested was considered in the
analysis. The assumption was made that all land in capability classes I
through IV, which was being used for cropland or pasture in 1961, could
be adjusted to its best alternative use. Therefore, all land in these
categories was defined as open land, Table 2. Class I and II landwas
considered as suitable for row crops year after year. Classes Ille and
11lw were considered suitable for row crops one year out of two. Therefore,
10
Table 1. Assumed Crop Yields Per Acre, Limestone Valley Areas, Alabama
Crop Unit Limestone Valley Areas
Cotton, lint Lb. 700.0
Corn Bu. 65.0
Oats Bu. 70.0
Grain sorghum Bu. 45.0
Alfalfa Ton 4.5
Lespedeza Ton 2.0
Soybeans Bu. 22.0
Corn silage Ton 12.0
total available row cropland was all class I and class II cropland and
pasture and one-half of class IIIe and IIIw cropland and pasture. The
remaining one-half of the class IIIe and IIIw land was considered as
plowable land not suitable for row crops. All of the class IV land was
designated as nonplowable land suitable only for permanent sod crops.
There were 1,607,890 acres in the Limestone Valleys which met the
definition for open land. Of this, 69 per cent could be classified as
row cropland, 21 per cent plowable land not suitable for row crops and
10 per cent as suitable only for permanent sod crops. Of this acreage,
43,765 were in enterprises not considered for adjustment possibilities
in the study. These acreages were excluded from the adjustment base,
leaving a total of 1,564,125 acres of open land for consideration in
this study.
11
Table 2. Soil Base Acreage, by Current 
Use and Capability Class, Soil
Classification Used in This Study, Limestone Valleys, Alabama*
Class 
Current use
Cropland Pasture
Acre
.1 .
lHe..
11w
IIIe
IS
111w .. ...
We ... ..
IVw 0 0 0 0 0 0
114 ,925
. .. .543 ,67 3
40, 859
. .. . 239 ,097
. . ." . . .42, 511
. . .. . 156,467
50, 526
27,667
Total
1,215,725
26,898
104,022
8,593
93,734
.20,168
63,559
43,518
31,673
392,1,65
for Studyr
Open land
Plowable land
Row cropland
Definition
Class I through IV cropland
and pasture
Class I, II and IIIIcropland
and pasture
Class I, II and 1/2 Class tIle
and 111w cropland and pasture
Excluded acreage
Dairy farms
nuts
Nonfarm rural residences
Total excluded acreages
Open land considered for adjustment
Acreage
1,607,890
1,454,506
1,115,397
27,500
7,000
9, 265
43,765
1,564,125
*Based on estimates from: State Soil Conservation Committee, Alabama
Soil and Water Conservation Needs Inventory,. Alabama 1961.
12
Capital
Interest, at 6 per cent, was charged on all operating capital and
investment capital, dther than land, required in the farm organizations.
Operating capital was expenditures which would be recovered in less than
1 year. Interest on this capital was charged for the time between the
actual expenditure and the sale of some product to recover the expenditure.
No interest was charged for expenditures that could be recovered in less
than 30 days.
Investment capital included all expenditures that would be invested
more than 1 year, such as breeding herds, buildings, fences, and feeders.
Interest on this capital was charged on the average value over its 
life
rather than the new cost.
To determine a return to operator labor and management, a return 
to
land of 5 per cent of its agricultural value was charged. With informa-
tion obtained from surveys in the area, the base value of a typical
acre of open land was set at $200 per acre. For specified situations,
the value of an acre of open land was varied from a free or no charge
situation to a value of $400 per acre.
Labor
The operator was assumed to be available for 2,817 
hours of productive
labor each year. The total hours were determined by considering length
of days, normal rainfall patterns, holidays, and other factors. These
hours were distributed by time periods. Any other seasonal labor required
by any of the enterprises was hired at a base rate of 60 cents per hour.
If any organization had required it, other full-time resident 
labor could
have been hired at a base rate of $1 per hour.
13
To evaluate the possible effect of increasing wage rates for hired
labor, situations were specified with the wage rate at 50 per cent and 100
per cent above the base rate.
Enterprise Activities
The enterprises used in the programming model are all land-based
activities. Land based means that the enterprise would require the use
of some quantity of open land as defined in this study for the production
of the commodity. Cotton, corn, soybeans, wheat, oats, grain sorghum,
lespedeza hay, and alfalfa hay were crop enterprises considered. Steer
feeding, a sow-pig operation, and a cow-calf enterprise were the live-
stock activities considered.
Several possible enterprises were not considered for various reasons.
Production of vegetables, fruits, or nuts is possible in the area studied.
However, the specialized management, labor, and equipment required and
market uncertainties limit the consideration of these enterprises. Grade
A milk production can be very profitable in the area. However, the over-
all supply and marketing situation is such that limited opportunity for
entrance into Grade A milk production exists. Poultry production now
exists in the area. However, poultry production does not require exten-
sive use of open land and the use of poultry enterprises would be deter-
mined by markets as well as available labor and capital rather than land.
All of these excluded activities, and probably others not mentioned,
could be profitable adjustment alternatives for individual farmers.
However, because of their limited adjustment possibilities, they cannot
be considered as possibilities for wide-scale area adjustments.
14
Allotment and Rotational Restrictions
Cotton was the only enterprise for which acreage allotments were con-
sidered. The 1963 acreage allotment converted to a percentage of the
open land on the farm was considered the base allotment level. For
specified situations the allotment level was set at 55, 85, 100, and 115
per cent of the base level.
Wheat allotments were not used but the production was limited to 15
acres per farm. The acreage allotment program in 1963 permitted this
acreage on any farm without an allotment. Alfalfa hay production was not
restricted, but the land was required to be in fallow one year in five to
allow for establishment.
Prices
Input prices used in the study were determined from a survey of farm
supply and equipment dealers in the Limestone Valleys,;Appendix A, Table
2. Product prices, except for cotton, were assumed as current prices
adjusted for trend and cycle, Appendix A, Table 1. They were determined
from 5-year (1958-1962) monthly averages taken from Alabama Agricultural
Statistics (2). The cotton price was varied from 20.8 cents to 36.4 cents
per pound of lint to correspond to the varying cotton allotment level.
The assumed current cotton price was 31.2 cents per pound of lint.
The assumed current land price was estimated on the basis of a sur-
vey of selected county agents, Farmers Home Administration supervisors,
and land appraisers in the area. The price determined represents the
value of an acre of open land with no improvements. No value was deter-
mined for woodland and wasteland. The value determined was used to
compute a return to land investment. This return was 5 per cent of the
15
stated value. In the analysis, the return to land 
was varied from zero
to a return based on a land value 100 per cent 
above the estimated
current value.
Machinery
The farm operator was assumed to own a three-plow tractor and 
land
preparing and cultivating equipment, Appendix A, Table 
3. He was also
assumed to own haymaking equipment and a cornpicker. Cotton, 
small
grain, and grain sorghum were assumed to be custom harvested.
Overhead Cost
General farm expenses that could not be charged to a specific
enterprise were classified as general overhead costs. 
These costs
were deducted from gross farm sales before the return to operator 
labor
and management was determined. These costs included such 
items as
telephone, bookkeeping, liability insurance, and truck use, 
Appendix A,
Table 4. Also charged as general overhead were interest, taxes, and
housing for the machinery, and real estate taxes at the rate of $1 per
acre. Insurance on livestock, buildings and machinery sheds was charged
to the livestock enterprise or included in machinery housing 
charge.
Minimum Open Land Requirements
Minimum land requirements and optimum enterprise organizations that
would yield a $5,000-return to operator labor and management were deter-
mined for five land value levels considering two sets of enterprise
possibilities. With one enterprise possibility set, the minimum require-
ments were determined for 12 cotton price
. 
and allotment combinations
- 
and
for three labor price levels. Also minimum requirements to yield 
a $7,000-
operator return were determined for four situations.
16
At the $5,000-level, the five open land values used were (1) full
ownership (no charge); (2) $100 per acre; (3) $200 per acre (the estimated
current value); (4) $300 per acre; and (5) $400 per acre. The labor price
levels were (1) base - $1.00 for regular labor and $0.60 per hour for
seasonal labor, (2) 50 per cent above base, and (3) 100 per cent above
base. The cotton allotment levels were 55, 85, 100, and 115 per cent of
the 1963 allotment acreage. Cotton price levels were 20.8 cents, 26
cents, 31.2 cents, and 36.4 cents per pound of lint. Enterprise possibil-
ities included (1) all enterprises and (2) all enterprises except hogs
and steers. For a $7,000-return, situations were (1) 100 per cent allot-
ment, 31.2 cents cotton, $200 per acre land; (2) 85 percent allotment,
31.2 cent cotton, $200 per acre land; (3) 100 per cent allotment, 26 cent
cotton, $200 per acre land; and (4) 100 per cent allotment, 31.2 cent
cotton, $400 per acre 
land.
The complete farm organization and farm business summary for each
of the assumed situations are presented in Appendix B. The minimum open
land requirements and enterprise organizations will be discussed in this
section.
The situation which most nearly approximates current conditions is
the 100-per cent allotment level, 31.2 cent cotton price, $200 per acre
of open land and base labor prices with all enterprises considered. In
the following discussion this situation will be designated as the base
situation. The discussion will be concerned with changes that occurred
as one or more of the base assumptions changed.
Effect of Changing Land Value
The base situation required 98.2 acres of open land to yield the
$5,000-return to operator labor and management, Table 3. With all
17
Table 3. Estimated Minimum Open Land Requirements and Enterprise Organi-
zation for a $5,000-Return to Operator Labor and Management, Specified
Land Values and Enterprise Considerations, 31.2 Cent Cotton Price,
1963 Cotton Allotment Level, Labor Prices,
Limestone Valley Areas, Alabama
Enterprise consideration Unit Land value per acre
and optimum organization $0 $100 $200a $300 $400
All enterprises considered
Total open land Acre 84.7 90.9 98.2 106.7 116.9
Cotton Acre 15.2 16.4 17.7 19.2 21.0
Corn Acre 39.6 42.5 46.0 50.0 54.8
Oats Acre 14.0 15.0 16.2 17.6 19.3
Pasture Acre 15.9 17.0 18.3 19.9 21.8
Cows No. 3.6 3.9 4.2 4.5 5.0
Sows No. 15.1 16.2 17.5 19.1 20.9
Hogs and steers not considered
Total open land Acre 122.2 135.8 152.8 174.6
Cotton Acre 22.0 24.4 27.5 31.4
Oats Acre 25.7 28.5 32.1 36.7
Alfalfa Acre 50.2 55.7 62.7 71.6
Pasture Acre 11.7 13.3 14.8 17.0
Fallow open land Acre 12.6 13.9 15.7 17.9
Cows No. 5.2 5.8 6.5 7.4
aBase program which most clearly represents 1963 conditions.
enterprises considered, the open land requirement decreased to 84.7
acres if no land charge was made and increased to 116.9 acres 
with a
land charge based on a value of $400 per acre. The optimum farm organi-
zation for each of these situations included cotton to the allotment
limit, corn for feed, oats for sale, beef cows, brood sows, and pasture.
As the open land requirement changed, the relative mixture of these
enterprises remained constant.
With hogs and steers not considered as enterprise possibilities,
the open land requirement at the base situation increased 37?6 acres to
18
135.8 acres. With a land chirge based on $100 per acre land value, the
open land requirement without hogs and steers was 122.2 acres and based
on a $400 per acre land value, the requirement was 174.6 acres. Cotton,
oats, and beef cows were still in these optimum organizations. Alfalfa
hiay replaced the corn and hog enterprises with the restriction that some
alfalfa land had to remain fallow. There was no relative change in
enterprise combination as the open land requirement increased.
Effect of Changing Labor Price
The farm organization at the base situation required very little
seasonal hired labor and no regular hired labor. Therefore, changing
the wage rate had very little effect on the open land requirement,
Table 4. The minimum open land required to yield the $5,000-return
increased less than 2 acres when the wage rates were doubled. There
was no effect on the relative relationship of the enterprise organizations.
Effect of Cotton Price and Allotment Levels
At a cotton price of 20.8 cents and 26 cents per pound of lint, no
cotton entered the optimum farm organization at any allotment level,
Table 5. The minimum open land requirement to yield the $5,000-return
was 105.7 acres. The optimum organization included oats, corn for feed,
hogs, and beef cows.
With the 31.2 cent and 36.4 cent cotton price, cotton was produced
in the optimum organization to the limit of the allotment level. At each
price level, the open land requirement decreased as the allotment level
increased, At 31.2 cents per pound of lint, the minimum open land
requirement decreased from 101.4 acres at the 55 per cent allotment
19
Table 4. Estimated Minimum Open Land Requirements and Enterprise Organi-
zation for a $5,000-Return to Operator's Labor and Management, Specified
Labor Prices, Base Land Price, 31.2 Cents Per Pound of Lint Cotton,
100 Per Cent Allotment, Limestone Valley Areas, Alabama
Labor price per hour
Item Unit Basea Base plus Base plus
50 per cent 100 per cent
Total open land Acre 98.2 99.1 100.1
Cotton Acre 17.7 17.8 18.0
Corn Acre 46.0 46.4 46.9
Oats Acre 16.2 16.4 16.5
Pasture Acre 18.3 18.5 18.7
Cows No. 4.2 4.2 4.2
Sows No. 17.5 17.7 17.9
aBase prices were $0.60 per hour for seasonal hired labor and $1.00
per hour for regular hired labor.
level to 97.1 acres at the 115 per cent allotment level. At 36.4 cents
per pound of lint, the minimum requirement decreased from 96.0 acres at
the 55 per cent level to 89.2 acres at the 100 per cent level.
Effect of Increasing Income Target
When the income target was increased to $7,000, the minimum open
land required at the base assumptions was 130.3 acres, Table 6. This
was an increase of 32.1 acres from the minimum required at the $5,000-
income level. At the $7,000-income level, reducing the cotton allotment
to 85 per cent increased the minimum open land requirement by 1.4 acres,
compared to a 1-acre increase for similar situation at the $5,000-income
level. At the $7,000-level reducing cotton price to 26 cents increased
the minimum open land requirement by 13 acres compared to an increase of
7.5 acres at the $5,000-level. Also, at the $7,000-level, increasing
the land value to $400 per acre increased the minimum requirement by
20
Table 5. Estimated Minimum Open Land Requirements and Enterprise 
Organiza-
tion For a $5,000-Return to Operator's Labor and Management, Specified
Levels of Cotton Prices and Allotments, Base Land and
Labor Prices, Limestone Valley Areas of Alabama
Unit Allotment level (percentage of 1963 allotment)
Item 
Unit 
55 
85 
100 
115
Cotton pricea
20.8 cents
Total land Acre 105.7 105.7
Cotton Acre 0.0 0.0
Corn Acre 66.9 66.9
Oats Acre 15.8 15.8
Pasture Acre 23.0 23.0
Sows No. 25.5 25.5
Cows No. 4.5 4.5
26.0 cents
Total land Acre 105.7 105.7 105.7
Cotton Acre 0.0 0.0 0.0
Corn Acre 66.9 66.9 66.9
Oats Acre 15.8 15.8 15.8
Pasture Acre 23.0 23.0 23.0
Sows No. 25.5 25.5 25.5
Cows No. 4.5 4.5 4.5
31.2 cents
Total land Acre 101.4 99.2 
98
.2b 97.1
Cotton Acre 10.0 15.2 17.7 20.1
Corn Acre 55.0 48.9 46.0 43.1
Oats Acre 16.1 16.2 16.2 16.3
Pasture Acre 20.3 18.9 18.3 17.6
Sows No. 21.0 18.7 17.5 16.4
Cows No. 4.3 4.2 4.2 4.1
36.4 cents
Total land Acre 96.0 91.4 89.2
Cotton Acre 9.5 14.0 16.1
Corn Acre 
52.0 45.0 
41.8
Oats Acre 15.2 14.9 14.8
Pasture Acre 19.3 17.5 16.5
Sows No. 19.9 17.2 16.0
Cows No. 4.1 3.9 3.8
aPer pound of lint.
bBase program.
Table 6. Estimated Minimum Open Land Requirements and Enterprise Organization for a $7,000-
Return to Operator Labor and Management, Specified Cotton Allotments (Percentage of 1963
Allotment) Cotton Price (Cents per Pound of Lint) and Open Land Value Per Acre,
Limestone Valley Areas, Alabama
Situation
100 per cent 85 per cent 100 per cent 100 per cent
Item Unit allotment, allotment, allotment, 
allotment,
31.2 cent cotton, 31.2 cent cotton, 26 cent cotton, 31.2 cent cotton,
$200 land $200 land $200 land $400 land
Total open land Acre 130.3 131.7 143.3 
155.2
Cotton Acre 23.5 20.2 10.0 
27.9
Corn Acre 61.0 64.9 81.5 72.7
Oats Acre 21.5 21.5 22.3 
25.7
Pasture Acre 24.3 25.1 29.5 
28.9
Beef cows No. 5.5 5.6 6.1 
6.6
Sows No. 23.3 24.8 31.1 27.7
22
24.9 acres compared to an increase of 18.7 acres at the $5,000-income
level.
The increase in income target caused no change in the combination
of enterprises used in the farm organization. The larger income require-
ment did increase the minimum open land required to yield the income
and increased the magnitude of the changes required by changing the
basic assumptions.
Adjustment in Farm Numbers
The farm problem has been defined by many people as simply a prob-
lem of too many small farms. The suggested solution has been to move
people out of agriculture until those remaining have enough resources to
obtain a decent income. If all farms in the area were large enough to
yield a $5,000-operator labor and management return, what would be the
effect on the number of farms in the area?
Two assumptions were made about the adjustment path taken by farmers
in the area. The first assumption was thatall open land in the area
could be reorganized into farms of exactly the minimum size required to
produce the income target. :This would give the maximum possible number
of farms in the area that could produce the desired income for every
farmer. The second assumption, somewhat more realistic, is that the
farms presently at or above 'the minimum size to yield the income would
make no adjustment in size but those farms currently smaller than the
minimum size would be reorganized into farms of the minimum size?
It was estimated from census of agriculture and other data that
there were 21,135 farms in the area in 1959. The open land acreage
determined for the study was 1,564,125 acres. From available data, the
23
farms were distributed by size according to open land acreage and the
total open land distributed to the various size groups. These
'
data
were used to develop the cumulative distribution curve, Figure 2. 
This
curve was used to determine, for each of the program solutions, the
number of farms with acreages currently above or below the minimum
required to yield the specified income target. Also, the open land
acreage associated with the number of farms can be determined. The
calculations to determine the adjustments in farm numbers for each
programmed situation are presented in Appendix C. For discussion here
only the percentage change is shown.
There were 78.7 per cent of the farms in the area with fewer acres
than the least requirement to obtain the specified income (84.6 acres).
However, these farms controlled only 35.2 per cent of the open land. At
the highest minimum requirement for a solution (174.6 acres), 92.8 per
cent of the farms had fewer acres than the minimum but controlled only
57.1 per cent of the open land.
With the assumption that all open land was adjusted into farms of
exactly the minimum size to yield the income target, the percentage
decrease which would occur in farm numbers ranged from 12.6 per cent
with a farm size of 84.6 acres to 57.6 per cent with a farm of 174.6
acres, Table 7. With the assumption that adjustment would be made only
with the open land in farms presently smaller than the minimum acreage
required to yield the income target, the percentage decrease required in
farm numbers ranged from 47.9 per cent to 68.6 per cent, Table 8. For
all the situations considered, the percentage decrease was 50 per cent
or more except for the situation of no land charge and the situation
with 36.4 cent cotton and 100 per
?
cent allotment level.
Size of farm
(acres open land
Percentage
of farms
100
90 -
80 -
70 -
60 -
50 -
40
30
20
10
0 10 20 30 40 50 60 70 80 90 100
Percentage of open land
Total open land 1,564 125 acres
Fig. 2. Cumulative Distribution of Number of Farms and Associated Open
Land Per Farm in Each Farm Size Category, Limestone Valley
Areas of Alabama, 1959
24
25
Table 7. Percentage Decrease from Present Number of Farms - Assuming All
Open Land is Adjusted into Farms Exactly the Minimum Size Required to
,Yield the Specified Income, Limestone Valley Areas, Alabama
A. Cotton allotment at 1963 level, 31.2 per pound
price
Enterprises considered
cotton, labor at base
Land price per acre
$0 $100 $200 $300 $400
(per cent)
$5,000 income target
All enterprises considered
Labor 150 per cent of base
Labor 200 per cent of base
Hogs and steers excluded
$7,000 income target
All enterprises considered
12.6 18.6 24.6
25.3
26.1
-- 39.4 45.5
30.6 36.7
51.6 57.6
43.2 52.3
B. Land and labor current, all enterprises considered
Cotton price
(cents per pound of lint)
Cotton allotment 20.8 26.0 31.2 36.4
(Per cent.of 1963 Level) (per cent)
$5,000 income target
55
85
100
115
$7,000 income target
85
100
g--
30.0
30.0
30.0
30.0
30.0
48.4
27.0
25.4
24.6
23.7
43.8
43.2
22.9
19.0
17.0
26
Table 8. Percentage Decrease from Present Number of Farms Assuming Adjust-
ment Only of the Open Land in Farms Currently Smaller Than The
Minimum Size to Yield the Income Target,
Limestone Valley Areas, Alabama
A. Cotton allotment at 1963 level, 31.20 per pound
price
cotton, labor at base
Enterprises considered
$5,000 income target
All enterprises considered
Labor 150 per cent of base
Labor 200 per cent of base
Hogs and steers excluded
$7,000 income target
All activities considered
Land price per acre
$0 $100 $200 $300 $400
(per cent)
47.9 50.2 52.1
52.3
52.5
-- 58.4 61.3
60.3
54.5 57.3
65.0 68.6
65.5
B. Land and labor current, all enterprises considered
Cotton price
Cotton allotment (cents per pound of lint)
(Per cent of 1963 Level) 20.8 26.0 31.2 36.4
(per cent)
$5,000 income target
55
85
100
115
$7,000 income target
85
100
54--.2
54.2
-- 52.9
54.2 52.4
54.2 52.1
54.2 51.7
63.5
51.4
50.0
49.6
60.7
60.3
Y - YHIII ULLII ~-HUVI Y ~e LI ~ ~LI ~ ~ H -L -L VLL ~ ~- - Y -~ L y ~- y
27
Implications
Assuming conditions approximating the current situation, cotton is
the most profitable enterprise for farmers in the Limestone Valley areas
of Alabama. However, if a farmer is willing and able to learn and use
good management practices in corn and sow-pig production, these enter-
prises compete very favorably with cotton. With 65 bushels per acre
corn and $16 per hundredweight hogs, the corn-hog enterprises would be
most profitable when cotton price is as low as 26 cents per pound of
lint. It should be pointed out, however, that to produce corn and hogs
at this level would required much improvement in management practices
over the current practices; whereas, current cotton production uses
management practices more comparable to thoseassumed in the study.
Farmers who have cow-calf enterprises using land suitable for plowing
are doing so at a sacrifice to potential income. When hogs and steers
were eliminated as enterprise possibilities, alfalfa hay, using a 4 and
i fallow rotation, was planted on all the available row cropland that
had been used for corn and hogs in the previous programs. The cow-calf
enterprise was still restricted to the nonplowable land suitable only
for pasture. One precaution with this solution is the problem of alfalfa
weevil causing alfalfa production to be more risky than usual. However,
these results do indicate that only on farms with a large acreage of
nonplowable land would income not be sacrificed if a large cow-calf enter-
prise were utilized.
Although labor in the area is becoming scarce due to increased of f-
farm opportunities, the results indicate this should not create a serious
problem in the near future. None of the various enterprise organizations
28
fully utilized the labor available from a full-time operator. However
there were some periods of peak load where some seasonal labor was
needed. This labor could continue to be supplied by unpaid family labor
or by school age children on vacation.
The major implication of the results is the seemingly poor income
position of most of the farmers in the area due to lack of size of oper-
ation. When at least 79 per cent of the farms in the area are too small
to yield a $5,000-operator labor and management return, the adjustment
implications are serious. In fact, in the farm organization at which
only 79 per cent of the farms were too small to yield the income the
return was actually to operator labor and management and land since no
return to land was charged. Assuming a return to land of 5 per cent of
its estimated current value is required above the operator labor and
management return, 81 per cent of the farms are too small to yield the
desired return.
It is possible thatsome of the small farms can go to highly
specialized and high capital using enterprises, such as poultry, to in-
crease returns on the small acreages. However, the available markets,
management ability of operators, and capital for expansion are limiting
factors to many such adjustments. The majority of the farmers in the
area will continue to produce mostly row crops with limited livestock so
that returns will generally be
' 
low.
The Tennessee River Valley area is having a rapid industrial growth.
Employment opportunities are increasing so that the opportunity exists
for a number of people to shift from farm to nonfarm employment. The
results indicate a needed reduction in number of farms of about one-half
29
of the present number to give the remaining farmers 
an opportunity of a
$5,000 labor and management return. Such magnitude 
of adjustments can
and may occur faster in this area than it would 
in areas with less
rapid industrial development.
30
LITERATURE CITED
(1) Alabama Conservation Needs Committee. Alabama Soil and Water
Conservation Needs Inventory. State Soil Conservation
Committee, 1961.
(2) Alabama Crop and Livestock Reporting Service. Alabama Agricultural
Statistics. Bulletin 11. Alabama Department of Agriculture
and Industries cooperating with Statistical Reporting Service,
USDA, Montgomery, Alabama: July 1962.
(3) Ellis, Theo H., and Earl J. Partenheimer. Costs and Returns from
Livestock Production in the Limestone Valley Areas of Alabama.
Alabama Agricultural Experiment Station in cooperation with
Farm Economics Research Division, ARS, USDA, Auburn, Alabama:
December 1960.
(4) Lanham, Ben T., Jr., J. H. Yeager, and Ben F. Alvord. Alabama
Agriculture, Its Characteristics and Farming Areas. Bul. 286.
Ala. Agr. Expt. Sta., Auburn, Alabama: May 1953.
(5) Partenheimer, Earl J., and Theo H. Ellis. Costs and Returns from
Crop Production in the Limestone Valley Area of Alabama.
Alabama Agricultural Experiment Station in cooperation with
Farm Economics Research Division, ARS, USDA, Auburn, Alabama:
February 1960.
31
APPENDIX A
Appendix A, Table 1. Assumed Base Prices Received by Farmers, Used For
Minimum Resource Programming Model, Limestone Valley Areas, Alabama
Item Unit Price
Dollars
Crops
Lint cotton Lb. 0.312
Cotton seed Ton 50.00
Corn (grain) Bu. 1.05
Grain sorghum Bu. .95
Soybeans Bu. 2.20
Oats Bu. 0.80
Wheat Bu. 1.80
Alfalfa hay Ton 34.00
Lespedeza hay Ton 28.00
Livestock
Hogs Cwt. 16.00
Sows Cwt. 13.00
Boar Cwt. 6.00
Calves Cwt. 22.00
Cull cows Cwt. 15.50
Bull Cwt. 17.00
Steers Cwt. 24.00
32
Appendix A, Table 2. Assumed Base Prices Paid by Farmers, Used For
Minimum Resource Programming Model, Limestone Valley Areas, Alabama
,Item Unit Price
Dollars
Seed
Cotton, acid delinted Lb. 0.18
Corn Lb. 0.18
Grain sorghum Lb. 0.16
Oats Lb. 1.50
Wheat Bu. 3.15
Soybeans Bu. 4.00
Lespedeta, Kobe Lb. 0.22
Orchard grass Lb. 0.32
White clover Lb. 0.70
Hairy vetch Lb. 0.18
Crimson clover, common Lb. 0.30
Millet Lb. 0.15
Coastal bermuda sprigs Bu. 0.50
Fertilizer
4-12-12 Ton 41.00
0-20-20 Ton 47.00
0-16-8 Ton 32.00
0-10-20 with 50 lb. borax per ton Ton 39.00
33.5-0-0 Ton 72.00
Pesticides
Insecticide, cotton Lb. 0.10
Insecticide, grain sorghum Lb. 0.08
Pre-emergence chemical Gal. 20.00
Herbicidal oil Gal. 0.35
Phenothiazine Lb. 0.70
2,4-D Lb. 0.85
Feed and minerals
Cottonseed meal Cwt. 4.00
Meat and bone scraps (50 per cent) Cwt. 3.60
Soybean oil meal (44 per cent) Cwt. 2.90
Alfalfa leaf meal Cwt. 4.10
Salt, loose Cwt. 1.45
Salt, swine formula Cwt. 1.65
Salt, block Cwt. 2.00
(Continued)
33
Appendix A, Table 2. Continued
Item Unit Price
Dollars
Livestock
Feeder calves
Boar
Bull
Cwt.
Head
Head
Custom work
Picking cotton, machine
Combining, oats
Combining, soybeans
Combining, grain sorghum
Mowing, raking, baling
Ginning
Shelling corn
Grinding and mixing concentrate
Mixing supplement
Hauling livestock
Liming (includes lime)
Miscellaneous
Seasonal labor
Capital
Defoliant
Stilbestrol (in feed)
Lb. of lint
Acre
Acre
Acre
Ton
Bale
Bu.
Cwt,.
Owt.
Cwt.
Ton
Hr.
Dol.
Lb.
Head
24.00
100.00
600.00
0.06
6.00
7.00
6.00
9.00
14.00
0.10
0.25
0.10
0.25
9.40
0.60
0.06
0.07
0.75
34
Appendix A, Table 3. Machinery Component With New and Annual Cost Used
for Minimum Resource Programming Model -Limestone Valley Areas, 
Alabama
Item Size New costa
Dollars
Tractor
Tractor (used)
Rotary mower
Plow
Disk harrow
Spike-tooth harrow
Planter
Pre-emerge equipment
Cultivator
Post-emerge equipment
Fertilizer attachment
Low-volume sprayer
Cornpicker
Wagons (2)
Grain drill
Fertilizer spreader
Mower
Rake
Baler
Grain elevator
Cyclone hand seeder
3-plow
7-ft.
3-bottom
7-ft.
3-section
4-row
4-row
4-row
4-row
4-row
8-row
1-row pull 
type
8-ft.
8-ft.
7-ft.
7-ft.
Total investment
Average investment
Annual depreciation
Annual interest
Annual housing, taxes, and insurance
4,000
200
430
375
275
200
720
150
675
100
165
300
1,200
800
560
340
350
500
1,750
375
15
13,480
6,740
1,186.20
404.40
202.20
aBased on a 1962 survey of machinery and equipment dealers in the
area.
35
Appendix A, Table 4. General Overhead Cost Assumed as Fixed Expenses,
Limestone Valley Areas, Alabama
Item Value
Annual interest on machinery
Annual cost of housing, taxes, and insurance
on machinery
$ 404.40
202.20
Pickup truck operation (farm 
share including
General farm liability insurance 40.00
Telephone (farm share) 40.00
Total $1,111.60
Personal property taxes for land and buildings were charged at
the rate of $1 per acre.
36
APPENDIX B
FARM BUSINESS SUMMARIES FOR THE PROGRAMMED SITUATIONS
Linear programming techniques were used to determine the minimum
acreage of open land that would be required to yield the specified net
return to a farm operator's labor and management under 
a specified set
of assumptions. As a byproduct of the results, it was possible to deter-
mine the optimum combination of enterprises on this acreage, the amount
of labor and capital required for this organization, and the receipts and
expenses of the production.
All of the above data are summarized in the following tables. Each
of the solutions results in a $5,000-return to operator's 
labor and
management except for those in Table 8 which result 
in a $7,000-return.
Each solution differs from any other solution because of change 
in one or
more specific assumptions. Each table title specifies 
the fixed assump-
tions for that group of solutions.
Appendix B, Table 1. Assumptions: Cotton Price, 31.2 Cents Per Pound of Lint; Cotton Allotment,
100 Per Cent of Current; Labor Price, Current; Land Price at Specified Values
Item Unit Land price per acre
$0 $100 $200 $300 $400
Total open land Acre 84.7 90.9 89.2 106.7 116.9
Cotton Acre 15.2 16.4 17.7 19.2 21.0
Corn Acre 39.6 42.5 46.0 50.0 54.8
Oats Acre 14.0 15.0 16.2 17.6 19.3
Pasture Acre 15.9 17.0 18.3 19.9 21.8
Cows No. 3.6 3.9 4.2 4.5 5.0
Sows No. 15.1 16.2 17.5 19.1 20.9
Operator labor Hour 1,258 1,352 1,461 1,588 1,740
Seasonal labor Hour 170 182 197 214 234
Investment capital
Land Dol. 0 9,090 19,640 32,010 46,760
Machinery Dol. 6,740 6,740 6,740 6,740 6,740
Other Dol. 4,376 4,702 5,080 5,523 6,051
Operating capital Dol. 2,170 2,331 2,519 2,738 3,000
Total capital Dol. 13,286 22,863 33,979 47,011 62,551
Gross sales Dol. 13,097 14,074 15,217 16,549 18,117
Operating and overhead expense Dol. 8,097 8,619 9,233 9,948 10,780
Return to land Dol. 0 455 982 
1,600 2,338
Return to operator labor and
management Dol. 5,000 5,000 5,002 5,001 4,999
Appendix B, Table 2. Assumptions: Cotton Price, 31.2 Cents Per Pound of Lint; Cotton Allotment,
100 Per Cent of Current; Labor Price, Current; Hogs and Steers Excluded;
Land Price at Specified Values
Item 
Unit 
Land price per 
acre
$100 $200 $300 $400
Total open land Acre 122.2 135.8 152.8 174.6
Alfalfa Acre 50.2 55.7 62.7 71.6
Cotton Acre 22.0 24.4 27.5 31.4
Oats Acre 25.7 28.5 32.1 36.7
Pasture Acre 11.7 13.3 14.8 17.0
Fallow open land Acre 12.6 13.9 15.7 17.9
Cows No. 5.2 5.8 6.5 7.4
Operator labor Hour 671 746 839 959
Seasonal labor Hour 573 636 716 818
Investment capital
Land Dol. 12,220 27,160 45,840 69,840
Machinery Dol. 6,740 6,740 6,740 6,740
Other Dol. 2,615 2,906 3,269 3,736
Operating capital Dol. 1,416 1,573 1,770 
2,022
Total capital Dol. 22,991 38,379 57,619 82,388
Gross sales Dol. 13,356 14,820 16,688 19,056
Operating and overhead expense Dol. 7,741 8,469 9,396 10,572
Return to land Dol. 611 1,358 
2,292 3,492
Return to operator labor and
management Dol. 5,004 4,993 
5,000 4,992
39
Appendix B, Table 3. Assumptions: Cotton Price, 31.2 Cents Per Pound of
Lint; Cotton Allotment, 100 Per Cent of Current; Land Price Current;
Labor Price at Specified Values
Labor price per hour
Item Unit Plus 50 Plus 100
Current
per cent per cent
Total open land
Cotton
Corn
Oats
Pasture
Cows
Sows
Acre
Acre
Acre
Acre
Acre
No.
No.
98.2
17.7
46.0
16.2
18.3
4.2
17.5
99.1
17.8
46.4
16.4
18.5
4.2
17.7
100.1
18.0
46.9
16.5
18.7
4.2
17.9
Operator labor
Seasonal labor
Investment capital
Land
Machinery
Other
Operating capital
Total capital
Gross sales
Operating and overhead
expense
Return to land
Return to operator land
and management
Hour 1,461
Hour 197
Dol.
Dol.
Dol.
Dol.
Dol.
19,640
6,740
5,080
2,519
33,979
Dol. 15,217
Dol.
Dol.
9,233
982
5,000 4,999
1,475
199
19,820
6,740
5,129
2,543
34,232
15,346
9,355
991
1,489
201
20,020
6,740
5,180
2,568
34,508
15,509
9,509
1,001
Dol. 5 ,002
40
Appendix B, Table 4. Assumptions: Cotton Allotment, 55 Per Cent of
Current; Land and Labor Prices, Current; Cotton Prices
at Specified Levels
Item 
Unit Cotton price 
per pound of lint
Item Unit
31.2 cents 36.4 cents
Total open land Acre 101.4 96.0
Cotton Acre 10.0 9.5
Corn Acre 55.0 52.0
Oats Acre 16.0 15.2
Pasture Acre 20.4 19.3
Cows No. 4.3 4.1
Sows No. 21.0 19.9
Operator labor Hour 1,623 1,536
Seasonal labor Hour 196 185
Investment capital
Land Dol. 20,280 19,200
Machinery Dol. 6,740 6,740
Other Dol. 5,884 5,567
Operating capital Dol. 2,715 2,569
Total capital Dol. 35,619 34,076
Gross sales Dol. 15,317 14,830
Operating and overhead
expense Dol. 9,304 8,869
Return to land Dol. 1,014 960
Return to operator labor
and management Dol. 4,999 5,001
41
Appendix B, Table 5. Assumptions: Cotton Allotment, 85 Per Cent of
Current; Land and Labor Prices, Current;
Cotton Prices at Specified Levels
Item 
Unit Cotton 
price per pound 
of lint
26.0 cents 31.2 cents 36.4 cents
Total open land Acre 105.7 99.2 91.4
Cotton Acre 0.0 15.2 14.0
Corn Acre 66.9 48.9 45.0
Oats Acre 15.8 16.2 14.9
Pasture Acre 23.0 19.0 17.5
Cows No. 4.5 4.2 3.9
Sows No. 25.5 18.7 17.2
Operator labor Hour 1,838 1,514 1,394
Seasonal labor Hour 195 197 181
Investment capital
Land Dol. 21,140 19,840 18,280
Machinery Dol. 6,740 6,740 6,740
Other Dol. 6,942 5,342 4,919
Operating capital Dol. 2,974 2,583 2,378
Total capital Dol. 37,796 34,505 32,317
Gross sales Dol. 15,462 15,245 14,529
Operating and overhead
expense Dol. 9,404 9,253 8,614
Return to land Dol. 1,057 990 914
Return to operator labor
and management Dol. 5,001 5,000 
5,001
42
Appendix B, Table 6. Assumptions: Cotton 
Allotment, 100 Per Cent of
Current; Land and Labor Prices , Current;,CottonPrices
at Specified Levels
Cotton price per pound of lint
Item Unit 20..8 26.0 31.2 36.4
cents cents cents cents
Total open land
.Cotton
.Corn
Oats
Pasture
Cows
Sows
Operator labor
Seasonal labor
Investment capital
Land
Machinery
Other
Operating capital
Total capital
Gross sales
Operating and
overhead expense
Return to land
Return; to operator
labor and management
Acre
Acre
Acre
Acre
Acre
No.
No.
Hour
Hour
Dol.
Dol.
Dol.
Dol.
Dol.
105.7
0.0
66.9
15.8
23.0
4.5
25.5
1,831
195
21,140
6,740
6 ,942
2,974
37,796
105.7
0.0
66.9
15.8
23.0
4.5
25.5
1,831
195
21,140
6,3740
6,942
2,974
37,796
98.2
17.7
46.0
16.2
18.3
4.2
17.5
1,461
197
19,640
6,740
5,080
2,519
33,979
89.2
1.6.1
41.8
14.8
16.5
3.8
16.0
1,328
179
17,840
6 ,740,
4,-618,.
2,290.
31,488
Dol. 15,462 15,462 15,217 14,389
Dol.
DoT.
9,5404
1 ,057
9,404
1,057
9,233
98.2
8,495
892
Dol. 5,001 .5,001
5,02 5,0
43
Appendix B, Table 7. Assumptions: Cotton Allotment 115 Per Cent of
Current; Land and Labor Prices, Current; Cotton
Prices
, 
at Specified Levels
Item 
Unit Cotton 
price per pound 
of lint
20.8 cents 26.0 cents 31.2 cents
Total open land Acre 105.7 105.7 97.1
Cotton Acre 0.0 0.0 20.1
Corn Acre 66.9 66.9 43.1
Oats Acre 15.8 15.8 16.3
Pasture Acre 23.0 23.0 17.6
Cows No. 4.5 4.5 4.1
Sows No. 25.5 25.5 16.4
Operator labor Hour 1,831 1,831 1,409
Seasonal labor Hour 195 195 197
Investment capital
Land Dol. 21,140 21,140 19,420
Machinery Dol. 6,740 6,740 6,740
Other Dol. 6,942 6,942 4,823
Operating capital Dol. 2,974 2,974 2,456
Total capital Dol. 37,796 37,796 33,439
Gross sales Dol. 15,462 15,462 15,176
Operating and overhead
expense Dol. 9,404 9,404 9,205
Return to land Dol. 1,057 1,057 971
Return to operator labor
and management Dol. 5,001 5,001 5,000
44
Appendix B, Table 8. Farm Business Summary for Organizations That Yield
$7,000 Operator Labor and Management Returns, Specified Cotton
Allotment Levels, Cotton Prices and Values of Open Land,
Limestone Valley Areas, Alabama
100 per cent 85 per cent 100 per cent 100 per cent
allotment, allotment, allotment, allotment,
Item Unit 26.0? cotton 31.2? cotton 31.20 cotton 31.2? cotton
price, price, price, price,
$200 land $200 land $400 land $200 land
Total open
land
Cotton
Corn
Oats
Pasture
Cows
Sows
Acre
Acre
Acre
Acre
Acre
No.
No.
Operator
labor
Seasonal
labor
Hour
Hour
Investment capital
Land Dol.
Machinery Dol.
Other
capital Dol.
Operating
capital Dol.
Total
capital Dol.
Gross sales
Oper. and
overhead
expense
Return to
land
Return to
oper., labor
and manage-
ment
Dol.
143.3
10.0
81.5
22.3
29.5
6.1
31.1
2,282
273
28,660
6,740
8,630
3,892
47,922
21,093
Dol. 12,660
Dol. 1,433
131.7
20.2
64.9
21.5
25.1
5.6
24.8
2,019
261
26,340
6,740
7,090
3,428
43,598
20,269
11,952
1,317
155.2
27.9
72.7
25.7
28.9
6.6
27.7
2,310
311
62,080
6,740
8,032
3,983
80,835
24,031
13,927
3,104
130.3
23.4
61.0
21.5
24.4
5.5
23.3
1,937
261
26,060
6,740
6,742
3,343
42,885
20,185
11,882
1,303
7,000 7,000
IVlr n~17PTT7 I lrll _ . 17 1 LLII 17 ~/LL~I
Dol. 7,0007,00
Appendix C, Table 1. Optimum Number of Farms, Minimum and Percentage Changes Consistent With A $5,000-
Return, Adjusted For Farm Units Above the Minimum Land Requirement Level, Specified Land Prices and
Enterprise Exclusions, Limestone Valley Areas, Alabama
Number of farms - 21,135
Open land acres - 1,564,125
Maximum
Land price Minimum number of Presently Resources Maximum Resources Minimum
a
and enterprise open land farms possible above 
to be possible on after b change
assumptions requirement and percentage minimum adjusted adjustable adjustment in farm
per farm change requirement resources numbers
All activities considered
Land $0 per acre
Number of farms 18,467 4,504 16,631 6,500 11,004 -10,131
-Open land acres 84.7 1,013,553 550,572
Per cent 12.6 -47.9
Land $100 per acre
Number of farms 17,207 4,265 16,870 6,263 10,528 -10,607
Open land acres 90.9 . 994,783 569,342
Per cent 18.6 -50.2
Land $200 per acre
Number of farms 15,928 3,984 17,151 6,123 10,116 -11,019
Open land acres 98.2 961,937 602,188
Per cent 24.6 -52.1
Land $300 per acre
Number of farms 14,659 3,658 17,477 5,952 
9,610 -11,525
Open land acres 106.7 929,090 635,035
Per cent 30.6 
-54.5
Land $400 per acre
Number of farms 13,380 3,265 17,870 5,753 9,018 
-12,117
Open land acres 116.9 891,651 
672,574
Per cent 36.7 
-57.3
aAssuming the total open land available is adjusted into farms of exactly the minimum size.
bAssuming only the open land in farms below the minimum size 
is adjusted.
U,
Appendix C, Table 2. Optimum Number of Farms, Minimum and Percentage Changes Consistent With A $5,000-
Return, Adjusted for Farm Units Above the Minimum Land Requirement Level, Specified Land Prices and
Enterprise Exclusions, Limestone Valley Areas, Alabama
Number of farms - 21,135
Open land acres - 1,564,125 .
Maximum
Land price Minimum number of Presently Resources Maximum Minimum
and enterprise open land farms possible
a  
above to be possible on Resources change
assumptions requirement and percentage minimum adjusted adjustable after in farm
per farm change requirement resources adjustment numbers
Hogs and steers excluded
Land $100 per acre
Number of farms 12,800 3,062 18,073 5,734 8,796 -12.339
Open land acres 122.2 863,397 700,728
Percent 39.4 -58.4
Land $200 per acre
Number of farms 11,518 2,540 18,595 5,632 8,172 -12,963
Open land acres 135.8 799,268 764,857
Per cent 45.5 -613
Land $300 per acre
Number of farms 10,236 1,887 19,248 5,507 7,394 -13,741
Open land acres 152.8 722,626 841,499
Per cent 51.6 
-65.0
Land $400 per acre
Number of farms 8,958 1,515 
19,620 5,115 6,630 -14,505
Open land acres 174.6 671,010 893,115
Per cent 57.6 
-68.6
aAssuming the total open land available is adjusted into farms of exactly the minimum size.
bAssuming only the open land in farms below the minimum size is adjusted.
Appendix C, Table 3. Optimum Number of Farms,
Return, Adjusted for Farm Units Above
Hired Labor Prices,
Minimum and Percentage Changes Consistent With A $5,000-
the Minimum Land Requirement Level, Specified
Limestone Valley Areas, Alabama
Number of farms - 21,135
Open land acres - 1,564,125
Maximum
Labor price Minimum number of Presently Resources Maximum Resources 
Minimum
and enterprise open land farms possible
a  
above to be possible on after change
assumptions requirement and percentage minimum adjusted adjustable adjustment
per farm change requirement resources numbers
Base labor price
Number of farms 15,929 3,984 17,151 6,132 
10,116 11,019
Open land acres 98.2 961,937 602,188
Per cent 24.6 -52.1
Base labor price plus 50 per cent
Number of farms 15,783 3,950 17,185 6,124 10,074 
-11,061
Open land acres 99.1 957,245 606,880
Per cent 25.3 
-52.3
Base labor price plus 100 per cent
Number of farms 15,626 3,912 17,223 
6,125 10,037 -11,098
Open land acres 100.1 950,988 613,137
Per cent 26.1 
-52.5
aAssuming the total open land available is adjusted into farms of exactly 
the minimum size.
bAssuming only the open land in farms below the minimum size is adjusted.
0O
Appendix C, Table 4. Optimum Number of Farms, Minimum and 
Percentage Changes Consistent With a $5,000-
Return, Adjusted for Farm Units Above the Minimum Land Requirements Level, Specified
Cotton Prices and Allotment Levels, Limestone Valley Areas of Alabama
Number of farms - 21,135
Open land acres - 1,564,125
Maximum
Cotton price Minimum number of Presently Resources Maximum Resources 
Minimum
allotment open land farms possiblea above to be possible 
on after change
assumptions requirement and percentage minimum adjusted adjustable 
adjustment in farm
per farm change requirement resources numbers
20.8 cents, 100 per cent allotment
Number of farms 14,798 3,697 17,438 5,993 
9,690 -11,445
Open land acres 105.7 930,654 
633,471
Per cent 30.0 -54.2
26.0 cents, 85 per cent allotment
Number of farms 14,798 8,697 17,438 
5,993 9,690 -11,445
Open land acres 105.7 930,654 
633,471
Per cent 30.0 
-54.2
26.0 cents, 100 per cent allotment
Number of farms 14,798 3,697 17,438 
5,993 9,690 -11,445
Open land acres 105.7 930,654 
633,471
Per cent 30.0 
-54.2
26.0 cents, 115 per cent allotment
Number of farms 14,798 3,697 
17,438 5,993 9,690 -11,445
Open land acres 105.7 
930,654 633,471
Per cent 30.0 
-54.2
31.2 cents, 55 per cent allotment
Number of farms 15,425 3,863 
17,272 6,093 9,956 -11,179
Open land acres 101.4 
946,296 617,829
Per cent 27.0 
-52.9
31.2 cents, 85 per cent allotment
Number of farms 15,777 3,948 
17,187 6,118 10,066 -11,069
Open land acres 99.2 
957,244 606,881
Per cent 25.4 
-52.4
(Continued)
Appendix C, Table 4. Continued
Maximum
Cotton price Minimum number of Presently 
Resources Maximum Resources Minimum
allotment open land farms possible
a  
above to be possible on after b change
assumptions requirement and percentage minimum adjusted adjustable 
adjustment in farm
per farm change requirement resources 
numbers
31.2 cents, 100 per cent allotment
Number of farms 15,929 3,984 
17,151 6,132 10,116 -11,019
Open land acres 98.2 961,937 
602,188
Per cent 24.6 
-52.1
31.2 cents, 115 per cent allotment
Number of farms 16,118 4,026 17,109 
6,178 10,204 -10,931
Open land acres 97.1 
1,504,141 599,840
Per cent 23.7 
-51.7
36.4 cents, 55 per cent allotment
Number of farms 16,294 4,068 
17,067 6,208 10,276 -10,859
Open land acres 96.0 968,193 
595,932
Per cent 22.9 
-51.4
36.4 cents, 85 per cent allotment
Number of farms 17,114 4,246 16,889 
6,323 10,569 -10,566
Open land acres 91.4 
1,506,331 577,940
Per cent 19.0 
-50,0
36.4 cents, 100 per cent allotment
Number of farms 17,535 
4,331 16,804 6,330 10,661 -10,474
Open land acres 89.2 
99,476 564,649
Per cent 17.0 
-49.6
aAssuming the total open land available is adjusted 
into farms of exactly the minimum size.
bAssuming only the open land in farms below the minimum size is adjusted.
U,
0~
Appendix C, Table 5. Optimum Number of Farms, Minimum 
and Percentage Changes Consistent with a $7,000-
Return, Adjusted for Farm Units Above the Minimum Land Requirements Level, 
With Specified Program
Assumptions, Limestone Valley Areas, Alabama
Number of farms - 21,135
Open land acres - 1,564,125
Maximum
Minimum number of Presently Resources Maximum Resources 
Minimum
a
Program open land farms possible above to 
be possible on after change
assumptions requirement and percentage minimum adjusted adjustable 
adjustment in farm
per farm change requirement 
resources numbers
100 per cent cotton allotment
31.2 cent cotton price
$200 per acre land
Number of farms 12,004 
2,752 18,383 5,630 8,382 -12,753
Open land acres 130.3 830,550 
733,575
Per cent 43.2 
-60.3
85 per cent cotton allotment
31.2 cent cotton 
price
$200 per acre land
Number of farms 11,876 2,697 
18,438 5,606 8,303 -12,832
Open land acres 131.7 
825,858 738,267
Per cent 43.8 
-60.7
100 per cent cotton allotment
26.0 cent cotton ...price
$200 per acre land
Number of farms 10,915 2,253 
18,882 5,458 7,711 -13,424
Open land acres 143.3 
782,063 782,062
Per cent 48.4 
-63.5
100 per cent cotton allotment
31.2 cent cotton price
$400 per acre land
Number of farms 10,078 1,794 
19,341 5,503 7,297 -13,838
Open land acres 155.2 
710,113 854,012
Per cent 52.3 
-65.5
aAssuming the total open land available is adjusted 
into farms of exactly the minimum size.
bAssuming only the open land in farms below 
the minimum size is adjusted.