From the July, 1956
issue of Extension Farm-News
Many farmers feel it’s good planning to diversify their
farms and have several products to sell, on the theory that when the price of
one product is down, another product will balance the farm income.
This reasoning is not necessarily sound, according to D.G.
Harwood Jr., Extension farm management and marketing specialist.
He cites a recent study conducted by the University of West
Virginia which showed that in seven out of 10 years of the study the price of
80 per cent of the products studied moved in the same direction. A number of
different products on a farm is not insurance when farm prices go down—most
prices move in the same direction in any one year.
Harwood says, “There is no magic formula of changes to make
when prices go down. Farmers should strive to maintain profit by cutting costs.
In planning the farm operation, a farmer should try to discover when products
he can produce most profitably, and concentrate on those few enterprises.”
It is better to specialize along one or two lines rather
than to grow a little of everything, Harwood concludes.
Tar Heel farmers trying to increase their incomes may find
that renting or buying additional farm land may not be the answer either.
Harwood says that results of a recent study in the Piedmont
area shows that on low income farms, family income could be increased only
$3.60 by adding another acre of land.
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