In recent history, many agricultural economists have tended to view work on cost and return budgets as a pretty dull thing. They gave it very low priority. However, the attention given to production costs by the 1973 farm legislation, together with recent acceleration in cost of farm inputs, have somewhat reversed the significance attached to this subject. A casual review of articles in the AAEA Journal over the past three years shows little attention to cost of production per se, but I predict that in the next two years there will be a big increase.

About two years ago, the term “cost of production” was just coming into use as a rallying cry by farm organizations, prior to the big jump in farm prices. This concern probably was a prime reason for the focus on costs in 1973 legislation. However, the issue was temporarily forgotten when farm prices increased sharply during the 1972–73 period.