Economic aspects of farm organization on Red River clay

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Eyvindson, Roger Karton
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In this thesis the problems of farm organization on a particular soil type in Manitoba were examined. Red River Clay was the soil type used in the study. The case study approach was used in this thesis. One farm was chosen and the problems of farm organization and income maximization on this farm were studied. The empirical tool used in the analysis was linear programming. The farm chosen was considered typical of the area and the results of the study should be applicable to other farms in the area. The results show that the return realized by the farm business can be substantially increased through improved farm organization. The results also point out that in problems of farm organization the entire farm business must be considered and not just one segment or enterprise. In this analysis it was discovered that the inclusion of rotations which produced no hay and which did not allow any of the livestock rotations considered in the study to be included resulted in a substantial loss of return. The choice of rotations among those which produced enough hay to allow the cattle space to be fully utilized did not have much effect on the return. The results show that farmers who fertilize at recommended rates should receive more return than those who use no fertilizer. The choice of livestock enterprise to be included in the final plan also has an effect on the return realized. The livestock enterprise which results in the highest return is steer calves medium grain. In the study it was found that gains in return could be made by increasing capital as long as capital was a limiting factor. With each increase in capital available the entire farm business must be reorganized. In the study it was assumed that a hay market existed. If this hay market was lost the results of the study show that the farmer would have to make adjustments in his farm busness. If he was unable to make these adjustments he would suffer a considerable loss in return. If the price of the "key" enterprises rises sufficiently it will make necessary an adjustment of the farm business. This was tested by raising the price of cattle purchased for the cattle finishing enterprises. This decreases the net return of these enterprises. A five percent increase in this price causes no adjustment but a ten percent increase caused all cattle finishing enterprises to be removed from the final plan.