534 IOWA DEPARTMENT OF AGRICULTURE 



assumed. It is true that at times they may be going in opposite direc- 

 tions, or one changing and the other remaining stationary, but this is due 

 to temporary circumstances during periods of readjustment following 

 rather sudden and severe price fluctuations. Undoubtedly, the supply of 

 cattle affects their price even when there has been no change in the beef 

 market; for in the purchase of cattle the buyers take into consideration 

 not only prevailing prices of beef but also undertake to forecast the situ- 

 ation in the beef market when the present supply of cattle will come into 

 it, in a week or ten days; if supplies of cattle increase even if the beef 

 market is firm, the chances are that the beef market will weaken when 

 the increased supplies of beef are received, and attempt is made to dis- 

 count this decrease; on the other hand, if cattle supplies are short and 

 the beef market is no more than steady, cattle prices will advance because 

 the decreased supplies of beef in the near future will ordinarily result 

 in an increased price for beef. As between the two markets, there is 

 an intricate play of supply on deman(i and demand on supply that makes 

 it difficult at a given moment to say which is the preponderant force, but 

 as beef cattle have a value only as the beef from them can be sold, in 

 general it is the price at which consumptive demand will take this beef 

 that determines the amount that can be and will be paid for the cattle. 



The charts also show the extent to which the prices for the better 

 grades of cattle follow a course of their own, depending upon the supply 

 and the demand for the best grades of beef, and the extent to which 

 they follow the general market and are influenced by the supplies of other 

 kinds and grades of cattle and by the demand for poorer grades of beef. 

 During the eight months w^hich are charted there are three rather distinct 

 situations in the supply and price relations for good cattle. In the late 

 spring and early summer, May and June especially, there was a period 

 when there w^as a great over-supply of the good grades of cattle, when 

 these made up nearly 25 per cent of the Chicago receipts, and the market 

 was filled with medium and long-fed cattle and the supply was far in ex- 

 cess of the consumptive demand for the resultant grades of beef, or at 

 least the demand from the ordinary channels thru which such beef goes 

 into consumption. As a result, the prices of these cattle and of this 

 grade of beef declined until they were almost on a parity with those of 

 the poorer kinds, and at the same time there was no great decline in 

 the prices of the poorer kinds — which indicates that there was not an 

 over-supply of cattle and beef, but an over-supply of certain grades of 

 cattle and beef. The number of consumers who demand these best grades 

 of beef is comparatively limited, or rather the demands of the consump- 

 tive channels thru which these good grades go is limited, which is not 

 exactly the same thing — aAd while they will take this limited amount at a 

 good price, any excess above this amount that must be disposed of thru 

 other channels or forced thru this channel will force the price of this 

 grade down to near the level of the poorer grades that have a much wider 

 consumptive demand. 



The second situation was during the late summer and fall. Here is 

 a period during which the supplies of these good grades of cattle came to 

 the market in fairly even volume, when the demand for the resultant beef 



