CHAPTER XIV. 

 THE PRICE OF WHEAT 1 



The Factors of Price. The price of wheat is normally de- 

 termined by the world conditions of supply and demand which 

 pertain to bread stuffs. The control exercised over price by 

 these conditions is immediate and transient. Direct variations 

 in price result from variations in supply or demand. Price in 

 turn causes supply and demand to vary by reacting upon them. 

 Such variations are, comparatively speaking, of slower action 

 and more permanent. Legislation may also become a deter- 

 mining factor of price in certain countries, as, for example, 

 when import duties on grain are established. 



Supply and Demand. Wheat and rye are the world's prin- 

 cipal breadstuffs. There is sufficient variation in supply and 

 demand to cause great fluctuations in price. Many causes of 

 variation in the supply of breadstuffs exist, among which may 

 be mentioned: (1) The great changes in climate and in abun- 

 dance of rainfall to which the natural wheat and rye regions 

 are subject; (2) the variations in acreage which result as a re- 

 action to variations in price; (3) the increase in acreage re- 

 sulting from the settlement of new countries; (4) the decrease 

 in acreage due to planting a larger acreage of other cereals, 

 especially corn, when there is an unusual demand for live 

 stock feed; (5) the degree of competition, which may affect 

 the supply at a given time or place; (6) the establishment or 

 abolition of trade restraints by commercial treaties; (7) the 

 hindering of transportation by war; and (8) the continuous 

 advance of the arts of production, communication and trans- 

 portation. In Europe, the average annual production of rye 

 is approximately as great as that of wheat, while the European 

 production of both crops taken collectively averages about 70 

 per cent of that of the entire world. When wheat is re- 

 latively high in- price, and rye is relatively low, consumption 

 of the latter grain increases and the demand for the former 

 decreases. 



1 For criticism and many valuable suggestions on this chapter 

 the writer is indebted to Prof. H. C. Emery and Dr. J. Pease Norton. 



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