PACKER PRICES AND THE RATIO METHOD 43 



the case of hog products, a loss may be withstood on a rapidly ris- 

 ing market, because the manufacturing loss will be compensated 

 for by the speculative profit. This was illustrated during a con- 

 siderable part of the year 1917, when most hog products sold at 

 considerably less than their normal ratio, but when the packers 

 actually made splendid profits, owing to the continual advance of 

 prices and speculative gain on products on hand. 



In normal times we regard charts based on principles as stated 

 in this chapter as approximately accurate in measuring packers' 

 profits and losses in the manufacture of given products. 



It is conceivable that the normal lard ratios may go lower in 

 the near future. Corn oil, cocoanut oil, cottonseed oil and other 

 tropical vegetable fats are being used as lard substitutes, and as 

 a result lard may sell decidedly below its normal pre-war ratio to 

 hogs. However, in this case the bacon hog will gain in popularity 

 and the supply of lard will be curtailed to a point which will justify 

 a ratio almost as great as existed before the war. 



