An analysis of the cost of assembling grain by farm truck in Manitoba

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Young, Kenneth Boyd
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The possible serious and disruptive implications of the proposed abandonment of railway branch lines in Western Canada warrant careful study. The additional cost to grain producers, other inhabitants of rural communities, and elevator firms should be taken into consideration as well as savings resulting from abandonment. This study on grain assembly costs of producers in Manitoba was predicated on this proposed action and its implications for farmers. Most cost data for the study are taken from a random survey of 89 Manitoba farms conducted in 1965. The survey was supplemented by information from published sources in respect to trunk prices and labor cost. The time period covered in the study was the crop year August 1, 1964 to July 31, 1965. Methodology followed in this cost study included an evaluation of depreciation and interest on investment costs basis the market revaluation method. Labor cost in grain assembly was determined by simple regression analysis, treating round-trip time to and from the delivery point as a function of delivery distance, and then imputing a cost estimate for labor. .... Major direct findings of this cost study are: 1. Average total cost of grain assembly by farm trucks in the survey was equal to the custom rate of one-half cent per bushel-mile. 2. Estimated additional variable cost of assembly for increased distance of haul was .3 cents per bushel-mile. 3. Average loading and unloading time in grain assembly was 23 minutes per truck. There was no noticeable difference in this time between different sizes of trucks. 4. Average speed in making a round trip to the elevator was 16 miles per hour. There was no noticeable difference in this speed between different sizes of trucks. 5. Size of truck and distance of haul have significant effects on the average cost of assembly per bushel-mile.